Demolitions outpace real estate conversions in Poland

The Polish real estate market is undergoing a "real estate recycling" phase, characterised more by demolition and reconstruction than genuine building conversions. 

Bartłomiej Zagrodnik

This trend, particularly in Warsaw, is leading to a reduction in office space as new projects, primarily residential, replace older office buildings.
According to Bartłomiej Zagrodnik, managing partner and CEO of Walter Herz, true office refurbishments are rare. Most older office buildings are demolished rather than modernised due to economic considerations, as upgrading them can be more expensive than new construction and often prevents the integration of modern architectural and technical solutions. Examples of genuine office-to-residential conversions in Warsaw include 1A Moniuszki Street, 29 Siennicka Street, and the former Nowy Świat 2.0 and CPD office buildings. Additionally, Warsaw's Lipowy Office Park complex saw one building converted to the National Police Headquarters and another to student housing.
However, demolitions are far more common, with many sites being redeveloped for residential use. Notable examples include the demolition of Warsaw's Intraco building, to be replaced by a new office tower, and the Ilmet office building, which will make way for the Warsaw One office tower. More frequently, demolished office buildings like Saturn, Sirius, Orion, Libro Mokotów, and the Cybernetyki Office Centre are being replaced by residential developments, leading to a significant increase in apartment supply in areas like Służewiec Przemysłowy and Mokotów.
Zagrodnik explains that current office rental levels in Poland are significantly lower than in Western European markets, making many office projects economically unviable. This, coupled with high construction costs and financing challenges, encourages developers to shift towards residential projects, where returns are more comparable to Western European levels. For instance, prime office rents in Warsaw are €22–26/m2, while residential rents are much closer to those in Berlin, Barcelona, and London.
This shift has created a growing deficit of modern office space. Only just over 400,000 m2 of new office space is under construction across Poland, a significant drop from the 800,000 m2 during previous booms. Warsaw alone expects only about 60,000 m2 of new office space in 2026. Despite this, demand for office space remains stable, with around 1.5 million m2 leased in major cities in 2025.
The shortage of modern office space is drawing renewed interest to areas like Warsaw's Służewiec Przemysłowy, which has a significant stock of vacant office space (17–18% vacancy). Companies are increasingly opting for refurbished office buildings in Mokotów, willing to pay higher rents for quality, well-connected workspaces. If current supply-and-demand trends continue, Warsaw could see significant increases in rental rates, especially in the central business district.