In 2025, nine Class A buildings were delivered across Poland's major office markets. This figure is remarkable not because it is low, but because it is identical to the number delivered in 2000, when the Polish office market was just beginning. History has come full circle, but the environment in which it is turning is decidedly different.
From Boom to Stagnation: 25 Years of Polish Office Market
Over the past quarter century, we have witnessed a dramatic transformation in office supply across Poland. Between 2012 and 2018, the market experienced a golden age, with developers delivering an average of over 80 buildings annually. The peak came in 2018, when 83 projects were completed. This wave of growth was driven by several factors: expansion of business services, cheap financing available on capital markets, and an influx of foreign capital.
However, the period of dynamic growth did not last long. From 2019 onwards, we observed a gradual slowdown in the pace of new building deliveries. The COVID-19 pandemic, which erupted in 2020, halted sector development. Many companies had to transition to remote work, which raised questions about the rationale for further investments in office space. But this was only a taste of the changes to come.
The Final Blow: 2022-2024
The real shock to the market came in 2022 with the war in Ukraine. Geopolitical uncertainty, an energy crisis, and rampant inflation created ideal conditions for freezing investments. The following year brought rising interest rates, which drastically increased the cost of financing development projects. Simultaneously, construction costs exploded due to higher material and labor prices.
Developers who had been planning new projects froze them. The pipeline of office buildings began to shrink at a pace the Polish market had not seen in decades. The volume of delivered office space is declining year-over-year, creating a scenario that could be both a threat and an opportunity for tenants.
The Window of Opportunity Is Closing
For many companies, the critical moment arrives when their current office lease expires. If that date falls within the next 12 to 18 months, they will be forced to choose from a significantly limited pool of available options. Worse, new Class A buildings offering the latest standards are virtually unavailable.
This limited supply means tenants are losing their ability to negotiate. In a situation where every square meter is precious, building owners can dictate terms. Rents are rising, and the transition period during which tenants could force favorable lease terms is slowly closing.
As we say at Brookfield Partners: "The window in which tenants could dictate terms is closing faster than many assume." This is precisely why tenant advisors recommend conducting portfolio reviews now, while there is still time to prepare for market changes.
What's Next? Implications for Tenants
Limited supply of new buildings means competition for available space will intensify. Companies that do not take proactive measures to search for and negotiate new locations may find themselves in an unfavorable position.
Tenant advisors, acting on behalf of companies, can develop strategies that maximize the chances of securing optimal lease terms. This includes also exploring alternative solutions-both accelerating processes and considering non-Class A buildings that may offer good price-to-quality relationships.
History has come full circle and returned to the figure of 9 buildings annually. But this time, tenants have significantly less time to prepare for change. Now is the time to act.