The office sector is entering a period of deeper qualitative and financial scrutiny. Decisions regarding new projects, refurbishments, or leasing are now supported by more thorough analyses and rigorous financial calculations. This trend is expected to intensify in 2026.

New office supply in Poland remains very limited, and the number of projects under construction has fallen to the lowest levels in years. Economic conditions are not conducive to new office investments. High financing and construction costs, further exacerbated by stringent ESG requirements, remain a key barrier to their implementation.

Requests for proposals now require the specification of hard data, such as energy consumption, carbon footprint, and indoor air quality. At the same time, EU regulations remain flexible, with timelines and ambitions being adjusted, which further favors solid business calculations over declarations.

In practice, developers holding prime land in city centers often refrain from delivering purely office projects unless they are complemented by residential or service functions. For tenants, this means fewer strictly office-only addresses in top locations and longer waiting times for new space.

In the period ahead, only well-planned developments in the best locations, with a credible commercialization strategy, will be brought to market, most often as mixed-use projects. The shortage of high-quality office space, particularly pronounced in Warsaw, may stimulate developer activity over the longer term; however, this is likely to be a gradual evolution rather than a sudden shift.

Disappearing office buildings are being replaced by residential developments

Given current yields, relatively low office rents, and limited investment demand, office projects are unable to compete with residential developments. Developers have slowed their delivery and are partly shifting their focus to housing construction. This is driven by lower office rental income in Poland compared with Western European markets, while residential rental yields remain broadly comparable. Capital is flowing into assets that are easier to sell and finance and that offer a more favorable risk profile.

Older office stock is more often being converted to alternative uses than refurbished or replaced with new office buildings. Investor decisions are guided by pure pragmatism. In many cases, refurbishing older office buildings is simply uneconomical—particularly when it comes to energy-intensive properties with inefficient layouts and weak locations. Every zloty invested in upgrading systems or façades will not translate into higher rents or stronger demand. In such situations, it is more honest to acknowledge the need for a change of use or the sale of the asset rather than manipulate the numbers. Greenwashing no longer works.

The gradual demolition of older office buildings and their replacement with residential developments is leading to a steady contraction of office stock in major cities, most notably in Warsaw. Redevelopment-based projects are undertaken only where the business case clearly works, where the numbers demonstrate tangible benefits in the form of lower operating costs and stable rental cash flow. As a result, in 2026, investments offering a strong product and a hybrid function will gain a competitive market advantage.

Prime address vs. strategic economics

Tenant demand is strongest for offices in modern buildings located in prime areas, where rental rates remain stable and, in some cases, show slight growth. At the same time, the availability of space in other market segments is steadily shrinking. The challenge today is not only to secure large office floors, but also medium-sized units, particularly in Warsaw. For tenants, this means the need to initiate the leasing process earlier, typically 12–18 months before the expiry of existing lease agreements.

In today’s increasingly demanding business environment, companies are more often faced with a choice between a top-tier location and high-standard space, and a refurbished building that offers functionality and acceptable comfort at a more reasonable budget. The key factor is finding the right business compromise over a 5–7-year horizon.

In this context, lease negotiations must extend beyond headline rent to include fit-out budgets, turnkey works, rent schedules, and flexibility of space - namely, the right to increase or decrease the occupied area during the lease term.

Flexible leasing models

Organizations are increasingly implementing scenarios that support the return-to-office trend, while also introducing solutions that enable work across distributed office locations in different areas.

The shift toward flexible office space is becoming a standard element of leasing strategies. Across the seven largest cities in Poland, flex office stock totals approximately 420 thousand sq m., with market share in Warsaw and Cracow reaching only about 4%. This remains modest compared with Western European markets, where the flex segment accounts for around 20% of total office stock, highlighting significant growth potential for this segment in Poland.

The flex format works well for market entry, project-based work, and pilot programs, as well as for the day-to-day operation of teams. In 2026, many organizations will combine different office models while simultaneously increasing pressure for employees to return to the office. After years of hybrid work, the office is once again playing a key role in building relationships, organizational culture, and effective collaboration. Spaces that support interaction, along with good acoustics, lighting, and amenities that facilitate everyday work, are gaining in importance.

In 2026, a competitive advantage will be gained by tenants who adopt shorter decision-making horizons, opt for flexible lease structures, and remain ready to quickly adjust their strategies in response to dynamically changing market conditions.

(WBJ)