A race is under way for the best office space among companies whose lease agreements will expire over the next few years. Not all tenants, however, will find premises that meet their expectations. Supply is shrinking rapidly in Warsaw’s city centre and the close-in Wola district, while success increasingly depends on the ability to reconcile market realities with an organisation’s long-term needs.
Many companies postponed leasing decisions, hoping for a wider choice of space, improved market conditions and lower rents. Today, however, the chances of such a scenario are diminishing. Limited supply of modern offices, a record-low level of planned development activity and a shrinking pool of large, high-quality space mean that a wait-and-see strategy is no longer cost-effective. Instead of savings, it usually results in higher costs and fewer options.
The decision window is closing fast
“There are fewer and fewer modern Class A offices available in Warsaw, especially in the city centre and close-in Wola, where companies are most eager to grow. The problem is compounded by limited new supply. At the end of the first quarter, development activity in the capital fell to its lowest level since 2011. Just over 115,000 square metres were under construction, and only one project — AFI Tower — had broken ground in the previous 12 months,” says Magdalena Zagórska, Director in the Office Agency Department at Newmark Polska.
As she points out, a large share of new developments is almost fully leased under pre-let agreements before completion. At the same time, more than a dozen large companies whose leases expire between 2028 and 2030 are already actively searching for new headquarters. Their combined demand is estimated at around 250,000 square metres of office space.
As a result, competition for the best premises is intensifying and the market is increasingly shifting in favour of landlords. In modern office buildings in central locations, the vacancy rate is only around 6%, naturally increasing upward pressure on rents.
According to Magdalena Zagórska, even unlocking planned investments would not materially change the situation in the near term.
“Depending on the size and complexity of a project, new buildings require between two and three and a half years to complete. Even if new projects were launched quickly, a significant increase in supply would not emerge before the end of the decade. Companies planning relocations or lease renegotiations before 2030 cannot afford to delay their decisions,” she explains.
Renegotiation or relocation? Time is working against tenants
For many organisations, recent years have been a period of reassessing their working models and actual office-space requirements. Now that most companies have completed this phase, starting the search process and planning a future leasing strategy early has become increasingly important.
“The optimal time to begin preparations is three to four years before a lease expires. This is how long it takes to select an adviser, conduct workplace research, analyse available options, negotiate terms and sign an agreement. Once the lease is signed, designing and preparing a new office is itself a long-term process. Depending on the scale of the project, it can take from several months to more than a year,” says Magdalena Zagórska.
She adds that starting the process less than a year before the end of the current lease often means having to remain in the existing location, regardless of whether it is optimal from a business perspective.
Companies can broaden their range of options by taking a wider view of the market and avoiding an exclusive focus on central areas. Mokotów, and particularly Służewiec, may regain popularity as an alternative. Rents in these locations currently range from around EUR 12.00 to EUR 16.00 per square metre per month.
Although these districts do not offer the same level of transport infrastructure or prestige as the rapidly developing city centre or Wola, their significant financial advantages are becoming a key factor for many tenants facing growing budget pressure.
According to Newmark Polska advisers, developing alternative scenarios strengthens a tenant’s negotiating position. Companies that start early can renegotiate conditions at their current location while simultaneously analysing options elsewhere in the market.
Another solution is to secure space in projects currently under construction.
“A third option, sometimes used by large organisations, is a so-called bridge solution. It involves a short-term extension of the current lease in order to gain additional time to select the target headquarters,” says Magdalena Zagórska, stressing that each of these strategies requires advance planning, because the available choice diminishes with every quarter.
Offices must be ready for changes we cannot yet foresee
Growing market pressure does not mean, however, that companies should make decisions based solely on the availability of space or rental levels.
“It is no longer possible to manage the workplace environment, including decisions on relocation or lease renegotiation, while pretending that the world has not changed. We operate in a reality of constant transformation — from the large-scale test of remote work and subsequent return-to-office mandates, to the rapid adoption of artificial intelligence. What was defined as a trend just a few years ago is now becoming reality. This has a direct impact on decisions about what kind of office we will need tomorrow — not only in terms of size, but above all in terms of function,” says Edyta Mika, Director of Workplace Strategy Change Management at Newmark Polska.
She adds that just as hybrid working ceased to be an experimental project and fundamentally reshaped the office market, artificial intelligence is now producing a similar effect.
“Beyond technology, demographics are also having a strong influence on working models. Analysis clearly points to a shrinking pool of talent entering the labour market alongside the ageing of the existing workforce. This combination makes not only process automation necessary, but also the creation of work environments that are attractive both spatially and technologically. Therefore, designing a new office cannot simply mean copying previous solutions,” says Edyta Mika.
In her view, flexibility and mobility — understood not only as the ability to expand or reduce floor space, but also as the ability to adapt office functions to an organisation’s changing needs — are now the defining qualities of a workplace that is resilient to change.
An office should offer diverse zones for focused work, collaboration and meetings, while allowing their proportions to be adjusted without the need for costly redevelopment of the entire space. A well-designed workplace enables the smooth reorganisation of individual modules while maintaining the coherence of the overall environment. The space must be ready for the fact that, in a few years, the organisation may operate in a completely different way than it does today.
“Understanding what these changes mean for tenants in terms of office function and floor space requires detailed quantitative and qualitative research. This must be carried out using a proven methodology and through dialogue with all stakeholders,” Mika adds.
An office is more than square metres
According to Edyta Mika, a modern office should not be designed solely around the number of desks, but around functions that support the organisation’s objectives.
“For years, many companies viewed a new office primarily through the lens of square metres and cost. That is too much of a simplification, and optimisation does not always mean reducing floor space. Sometimes it means using it more effectively, changing the balance of areas or introducing new functions that support employee effectiveness in a new reality,” she explains.
Automatically reducing office space solely on the basis of the number of employees working remotely or in a hybrid model is particularly risky.
“Many tenants still assume that office space can be reduced simply based on the number of people working remotely or hybrid, using this to calculate the required number of workstations. But it does not work that way. The experience of recent years has shown that a standard desk is not the only place where work happens. To operate effectively, we need diversity: areas for focused work, collaboration spaces, project rooms, informal meeting places, meeting rooms — both less and more formal — and well-equipped rooms for online meetings. Social, integration and wellbeing areas are also important. The space required by a specific organisation should be determined by precisely defined office functions and space budgets, rather than solely by the number of standard workstations,” Mika emphasises.
Do not waste time — use it to gather data
The experts agree that companies should not expect a rapid return to the market conditions seen a few years ago. This does not mean, however, that decisions should be made hastily.
“Since a wait-and-see strategy is no longer working, it is worth using this time to gather data and better understand the organisation’s needs. This may mean redefining the working model and, consequently, redefining the functional requirements and space budget for a new or reorganised office. This is not easy when the market forces us to make decisions about the profile of a new space much earlier than our previous experience with relocation or lease renegotiation would suggest. We need to anticipate a rapidly changing future while minimising risk,” says Edyta Mika.
The response to this market uncertainty is in-depth analysis and workplace research.
“‘Do not guess’ is one of the most important principles of effective advisory work. In times of such high volatility, it is no longer possible to copy solutions from an old office or base decisions solely on experiences from several years ago. The earlier an organisation begins analysing its needs, the greater the chance that it will create a space capable of supporting the business in the future,” Mika argues.
As Magdalena Zagórska concludes, only a combination of market knowledge and a reliable analysis of a company’s needs makes it possible to take the right decision regarding a future headquarters.
“The advantage will go to organisations that begin preparations early enough. In conditions of limited supply and growing competition for the best space, time has become one of tenants’ most valuable resources. That is why it is not worth delaying action,” she says.
