Trend in office construction moving towards modernization rather than development

Despite high demand for office space in Poland, new office construction remains limited, with only 230,000 sq m under development in Warsaw and 270,000 sq m in regional cities. Developers remain cautious, favoring modernization over new builds, and prioritizing projects with pre-leasing agreements.

Demand surged in 2024, driven by sectors like finance, tech, and biotech, especially in Warsaw, Cracow, and the Tri-City. Rising lease expirations, return-to-office trends, and foreign investment may further boost demand. Flexible office solutions and ESG-compliant buildings are increasingly popular. Investor interest is also rebounding, with 2024 seeing a near fourfold rise in transaction volume, potentially encouraging new projects amid improving market conditions and expected interest rate cuts.

(WBJ)