The years 2010-2025 brought the Polish commercial real estate market many unforeseen phenomena. The beginning of this period fell during the emergence of the world from the global financial crisis, which paradoxically contributed to the influx of companies from the BPO/SSC sector to Poland. Western corporations, looking for savings, transferred their business processes to cheaper locations.
– The second decade of the 21st century was marked by a boom for offices in Poland, where regional cities, such as Kraków or Wrocław, have gained very much – he says Mateusz Polkowski, Head of Research & Consultancy – Poland & CEE, JLL. – Other sectors also developed – the growing consumption was driven by the retail sector, the expansion of road infrastructure was a catalyst for new storage projects. Investment volumes achieved record levels. It was often enough not to disturb the business to shoot itself – comments the expert.
The end of this prosperity was laid by the global Covid-19 pandemic, which completely revolutionized the approach to offices. The Work From Home model became widely widespread, which resulted in a decrease in demand for office space and forced tenants to think about the strategy of work organization.
Dramatic decline in the new supply
Over the past 15 years, 9 million sq m has arrived on the Polish office market. In the peak years it was even 900 thousand. sq m per year. Pandemia has changed this situation radically – supply dropped by about 80 percent. compared to the times before the crisis.
Currently, developers in Warsaw plan to deliver only about 75,000 sq m of new surfaces annually. For comparison, in 2018, there were 125 office projects under the construction throughout Poland, today there are only 25 of them.
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Limiting the new supply is to positively affect the vacancy rate in Warsaw. JLL experts pay attention to the polarization between the center of the capital and other locations. In Śródmieście and close will, the activity of developers is focused – Renches grow the fastest here, and the vacancy rate is lower than in other parts of the city. In Służewiec, vacancies reach about 20 percent.
Challenges of regional markets
The last 15 years have been a period of extraordinary success of regional office markets that have developed thanks to the influx of investments in the business services sector. Employment in the SSC/BPO sector increased rapidly – from about 100,000 people in 2013 to 488 thousand Currently.
– From 2019, a discrepancy began to appear between the demand of these companies for offices and what the developers provided, who started implementing even during the full pandemic time. This gap is the cause of today's high vacancy in regions that will stay with us for several years. Today, the vacancy rate in the regions is a considerable 17.5 percent. – explains Mateusz Polkowski.
The expert adds that the vacancy can still increase slightly, after which the process of gradual stabilization will begin. Employees of the BPO/SSC sector are the least often their work from the office compared to other mental employeesspending only one day a week in offices.
New demand structure
Over the past 15 years, the tenants have concluded a total of 16,000 lease agreements per 16.5 million sq m of offices. Pandemic caused a decrease in demand-some companies reduced their offices by an average of 20-30 percent. The structure of this demand has also changed – Today about 50 percent all signed contracts are renegotiations.
Tenants often prefer to stay in the currently occupied facilities. If they decide to relocate, they choose the best projects in the most convenient locations. In Warsaw, the trend “Fly to Quality” is visible – moving to office buildings offering a higher standard and better communication solutions. ESG solutions are becoming more and more often an important selection criterion.
The future of the office sector
The shape of the future market depends on the strategy of the use of office space by tenants. An example of companies from Fortune 100 shows a clear trend: in 2022 30 percent of them worked fully remotely, 48 percent in the hybrid system and only 2 percent from the office. In 2025, the hybrid work policy is implemented by 74 percent. companies, but as much as 21 percent operates fully from the office, and only 1 percent fully remotely.
In Poland, employees spend on average 2.4 days a week in the office and this percentage has an upward trend. The way space is used – the classic open space mix and offices are becoming a thing of the past for the space for common work, social and coworking zones.
– Employees are increasingly returning to offices, because today it is clear to everyone that hybrid work is not able to completely replace work from the office, giving the opportunity to directly exchange experiences, building relationships between employees, stimulating creativity. Better, better located projects are taken over by tenants from older facilities, often outdated. Our office sector will certainly not return to the pace of rapid growth from 2010-2020. Nevertheless The quality of new projects will grow, which will be more refined, more modern and better connected. And there is always a demand for high quality – sums up Mateusz Polkowski.
