{"id":5699,"date":"2026-06-17T08:41:33","date_gmt":"2026-06-17T08:41:33","guid":{"rendered":"https:\/\/ceo.com.pl\/en\/?p=5699"},"modified":"2026-06-17T08:41:33","modified_gmt":"2026-06-17T08:41:33","slug":"low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961","status":"publish","type":"post","link":"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/","title":{"rendered":"Low supply, rising rents and long leases: the new reality for office tenants"},"content":{"rendered":"<p><strong>The most expensive decisions are being made right now. Office space needs to be chosen in market conditions that are changing faster than lease terms.<\/strong><\/p>\n<p><strong>For years, tenants assumed that if they failed to find a suitable office, the market would quickly offer another option. That logic no longer holds. With development activity at a record low and prime office stock shrinking, decisions need to be made earlier and frequently amid considerable business uncertainty. Karol Wyka, Executive Board Director and Head of Office Department at Newmark Polska, explains why intuition is no longer enough and why choosing an office is becoming one of the most important decisions companies face. <\/strong><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#It_wasnt_that_long_ago_that_companies_planned_relocations_two_years_in_advance_Why_just_over_a_year_later_is_the_office_market_operating_under_such_different_conditions\" >It wasn\u2019t that long ago that companies planned relocations two years in advance. Why, just over a year later, is the office market operating under such different conditions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Why_did_developers_pull_back_almost_simultaneously\" >Why did developers pull back almost simultaneously?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#But_companies_cant_afford_to_wait_%E2%80%93_they_need_offices_here_and_now\" >But companies can\u2019t afford to wait \u2013 they need offices here and now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Is_regional_development_activity_even_lower\" >Is regional development activity even lower?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Some_tenants_have_put_their_decisions_on_hold_in_anticipation_of_a_rental_correction_Do_they_stand_a_chance\" >Some tenants have put their decisions on hold in anticipation of a rental correction. Do they stand a chance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#How_has_the_role_of_the_tenant_advisor_evolved_under_these_conditions\" >How has the role of the tenant advisor evolved under these conditions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Is_it_even_possible_to_design_an_office_today_that_will_meet_a_companys_future_needs\" >Is it even possible to design an office today that will meet a company\u2019s future needs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Are_companies_ready_to_look_at_office_space_in_such_a_strategic_way\" >Are companies ready to look at office space in such a strategic way?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/ceo.com.pl\/en\/low-supply-rising-rents-and-long-leases-the-new-reality-for-office-tenants-99961\/#Is_the_office_decision_today_one_of_the_most_important_corporate_decisions\" >Is the office decision today one of the most important corporate decisions?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"It_wasnt_that_long_ago_that_companies_planned_relocations_two_years_in_advance_Why_just_over_a_year_later_is_the_office_market_operating_under_such_different_conditions\"><\/span>It wasn\u2019t that long ago that companies planned relocations two years in advance. Why, just over a year later, is the office market operating under such different conditions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Karol Wyka:<\/strong> Development activity is currently at a historic low \u2013 not just slightly lower than before, but at its lowest level in more than ten years. In Warsaw, at the end of the first quarter of this year, just over 115,000 sqm of office space was under construction, representing a 40 per cent decline quarter-on-quarter and a drop of more than 50 per cent year-on-year. Additionally, only one project \u2013 AFI Tower \u2013 broke ground during the past 12 months, accounting for more than 43% of the capital\u2019s office development pipeline.<\/p>\n<p>This is an unprecedented situation. Developers have projects ready to launch, secured plots and valid building permits, yet they are increasingly waiting for large pre-let commitments before starting construction. That\u2019s why a two-year planning horizon is far too short. In practice, decisions about new offices must be taken even five years in advance. When combined with a typical lease term of 10 years or more, companies may be effectively planning offices for the next 15 years \u2013 well into 2040. This requires them to anticipate not only business development, but also the impact of AI, generational change and new work models on their operations.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_did_developers_pull_back_almost_simultaneously\"><\/span>Why did developers pull back almost simultaneously?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Office projects stopped making financial sense. Before the outbreak of the war in Ukraine, the period of high inflation and rapidly rising borrowing costs, prime office yields in Warsaw stood at around 4\u20134.5 per cent. The investment market remained highly liquid, with investors acquiring properties at high prices.<\/p>\n<p>Several adverse factors then converged: a deterioration in the geopolitical situation, high financing costs, rising construction costs and a temporary freeze in the investment market. As a result, yields in Warsaw have risen to around 6\u20136.5 per cent. For property owners, this often means a difference of tens of millions of euros in the valuation of the same building. Developers have not lost confidence in the market, but they have become significantly more cautious about launching new projects. Most will now proceed only after securing a major pre-let.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"But_companies_cant_afford_to_wait_%E2%80%93_they_need_offices_here_and_now\"><\/span>But companies can\u2019t afford to wait \u2013 they need offices here and now<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>And that\u2019s why the market is no longer tenant-friendly. For years, companies were accustomed to having alternatives: a new building, another development or vacant space in a prime location. Today, the situation is very different. At first glance, the data may seem reassuring. The vacancy rate in Warsaw is close to 10 per cent. However, office availability in the Central Business District and in modern buildings completed after 2020 is close to zero. At the same time, some older hubs, such as S\u0142u\u017cewiec Przemys\u0142owy and \u017bwirki i Wigury are undergoing transformation. While some buildings will return to the market after refurbishment, others will be demolished, further limiting office supply.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_regional_development_activity_even_lower\"><\/span>Is regional development activity even lower?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>I\u2019d say it\u2019s minimal. There are currently 16 office buildings under construction across the regional markets, and only four of them are expected to deliver more than 10,000 sqm each. These are very small projects. To put this into perspective, until quite recently the average office development comprised approximately 20,000 sqm.<\/p>\n<p>As a result, total new supply in regional cities is unlikely to exceed 100,000 sqm this year. That would make it the second-lowest annual result in nearly two decades, surpassed only by 2025, which saw just 20,500 sqm delivered. In some cities with strong potential, such as Wroc\u0142aw, there are currently no office projects under construction. The highest level of development activity in recent months has been recorded in Pozna\u0144 and Krak\u00f3w.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Some_tenants_have_put_their_decisions_on_hold_in_anticipation_of_a_rental_correction_Do_they_stand_a_chance\"><\/span>Some tenants have put their decisions on hold in anticipation of a rental correction. Do they stand a chance?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Rents are rising almost month by month. In Warsaw, rents in prime locations starting with a \u20183\u2019 no longer raise eyebrows. In the current market cycle, I see no reason for rents to decline, unfortunately. If demand remains strong and new supply is virtually non-existent, the market\u2019s response is predictable. This means not only higher rental rates but also a shrinking pool of available office space and a weaker negotiating position for tenants.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_has_the_role_of_the_tenant_advisor_evolved_under_these_conditions\"><\/span>How has the role of the tenant advisor evolved under these conditions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Today, office advisory involves much more than simply presenting a few available buildings. It\u2019s increasingly about managing time, risks and business flexibility. If a company begins the process too late and lacks a viable alternative to its current location, its negotiating position becomes significantly weaker.<\/p>\n<p>That\u2019s why it is so important to develop a strategy well in advance. The goal is not only to choose an office, but also to ensure that the lease contains provisions that will allow the tenant to respond to change. These may include expansion rights, the ability to surrender part of the leased space or the option to terminate the agreement early under specified conditions. Such provisions can frequently provide a company with peace of mind for years to come.<\/p>\n<p>As I mentioned earlier, ten-year leases dominate the market today, making long-term planning challenging for organisations. That\u2019s why flexible lease provisions are becoming just as important as location and rent levels.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_it_even_possible_to_design_an_office_today_that_will_meet_a_companys_future_needs\"><\/span>Is it even possible to design an office today that will meet a company\u2019s future needs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is one of the key challenges facing tenants and advisors today. That is exactly why workplace strategy \u2013 a data-driven approach to predicting how an organisation will use its office space \u2013 is becoming increasingly important.<\/p>\n<p>An advisor\u2019s role in this process is not to make decisions on behalf of clients, but to provide them with as much relevant information as possible so they can make informed choices. One thing is certain: we are moving away from designing offices based solely on intuition or the personal preferences of board members. Instead, we analyse an organisation\u2019s operating model, employee movement across teams, inter-team collaboration, where employees live and the needs arising from generational differences and the specific nature of different roles. This enables us to create workplaces that meet a company\u2019s needs not only today, but also in the years ahead.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_companies_ready_to_look_at_office_space_in_such_a_strategic_way\"><\/span>Are companies ready to look at office space in such a strategic way?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Increasingly so. However, many managers last oversaw relocations five to ten years ago, when market conditions were very different, and some of the experiences from that period are no longer relevant. A long-term lease is a multi-million-zloty commitment that can affect an organisation for a decade or more. As a result, robust analysis is becoming increasingly important, as is professional guidance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_the_office_decision_today_one_of_the_most_important_corporate_decisions\"><\/span>Is the office decision today one of the most important corporate decisions?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Yes, and that probably best captures the ongoing market shift. A good office can support an organisation\u2019s growth, help attract and retain talent, foster team collaboration and even facilitate strategic change. By contrast, a poorly planned or executed relocation will be little more than a heavy cost burden. That\u2019s why experience and thorough preparation are so important. Today, leasing an office that is too expensive is not necessarily the most costly mistake a company can make. The greater risk is choosing an office that no longer meets the organisation\u2019s needs just a few years down the line.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The most expensive decisions are being made right now. Office space needs to be chosen in market conditions that are changing faster than lease terms. For years, tenants assumed that if they failed to find a suitable office, the market would quickly offer another option. That logic no longer holds. With development activity at a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5700,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8],"tags":[2783,4658,70,2688,3251,2522,2680,74,2813,2778,51,2526,82,71],"class_list":["post-5699","post","type-post","status-publish","format-standard","has-post-thumbnail","category-real-estate","tag-contrast","tag-karol-wyka","tag-krakow","tag-leasing","tag-newmark","tag-newmark-polska","tag-polska","tag-poznan","tag-sense","tag-teams","tag-ukraine","tag-war-in-ukraine","tag-warsaw","tag-wroclaw"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/posts\/5699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/comments?post=5699"}],"version-history":[{"count":2,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/posts\/5699\/revisions"}],"predecessor-version":[{"id":5702,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/posts\/5699\/revisions\/5702"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/media\/5700"}],"wp:attachment":[{"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/media?parent=5699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/categories?post=5699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ceo.com.pl\/en\/wp-json\/wp\/v2\/tags?post=5699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}