The office space segment in the six key CEE countries - Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia - continues to develop in the face of changing economic conditions, new expectations for the labor market and increasing tenant requirements. Although leasing has largely stabilized after the pandemic, differences in supply levels, tenant priorities and compliance with ESG standards determine different trends in the countries of the region, Colliers reveals in one of its latest reports on the topic: Evolution of Office Markets in CEE-6: Trends and Challenges.
Different development trends
"The new office supply in the CEE-6 region reveals stark contrasts. Sofia is characterized by the continued development of Class A projects, while in large cities such as Warsaw, Prague, Bucharest and Budapest, construction activity is significantly decreasing. In Warsaw, despite modest growth in 2024, only one third of the office volume observed during the pandemic is on offer," commented Josef Stanko, Market Research Manager at Colliers Czech Republic.
Focus on sustainability and quality
Green certification of buildings is now a mainstream expectation in the region. New projects are increasingly targeting certifications such as LEED, BREEAM and DGNB. In Sofia, almost all new projects are certified or in the process of certification. In Bratislava, developers are integrating modern technologies such as geothermal systems. Repositioning processes are underway, especially in Poland and the Czech Republic, where Class A buildings in prime locations are preferred. Older B-class properties are facing increasing vacancy rates or are changing their purpose as tenants seek high quality and sustainability.
Challenges persist
While overall development levels in the segment remain satisfactory, challenges vary across markets. Rising construction and financing costs, stagnant demand and inconsistent returns are common issues. This leads to gaps between expected and actual supply levels in CEE cities.
Changing tenant preferences
In CEE-6, tenants are prioritizing quality, location and sustainability over cost-based solutions. In Sofia, demand remains stable, driven mainly by renewals and relocations. In Warsaw, sectoral changes are observed, with the share of manufacturing companies increasing and demand from IT and outsourcing representatives decreasing. In Bucharest, the ongoing uncertainty is causing tenants to delay decisions on signing leases for offices under construction, while trends for hybrid working formats are taking hold.
Public sector institutions are emerging as key tenants. In Slovakia and Poland, state agencies are looking for modern and high-quality office environments. In Hungary, the government is transitioning from tenant to owner, with new state-owned office buildings entering the market.
Trends in flexible spaces and lease terms
Flexible workspaces are on the rise. Sofia leads the region in terms of the share of flexible space, while Prague is witnessing a sub-segment growth driven by a dominant local operator. Budapest has a mature flexible space market with growing demand from large companies.
Leasing terms are evolving. In Prague, newly signed contracts are often for 7-10 years, reflecting the propensity to invest in high-quality furnishings. A similar trend is observed in Warsaw, while tenants in Bucharest are seeking greater flexibility in terms, including termination clauses and space adaptation options.
Prices and additional incentives
Rent levels are steadily increasing in CEE-6 markets, which is even more true for ESG-compliant buildings in central locations. The price gap between Class A and B offices is widening.
Buildings with “green“ certificates are increasingly achieving higher rental levels, while those without a certificate risk being devalued due to not meeting sustainable and energy-efficient standards. Incentives vary by city – for example, Prague offers generous finishing budgets for new construction, while Warsaw adapts rental conditions and compensation to the sustainability of the property.
Key market data
o Warsaw continues to outperform its regional competitors in terms of net leased space.
o Prague sees steady demand and low vacancy rates, currently at 7-8%.
o Bucharest and Sofia recover from high vacancy peaks (15-16%) in 2021-2022.
o Bratislava and Budapest see fluctuations in vacancy rates, with the older building stock having the strongest impact.
Outlook for the rest of 2025 d.
“Despite global uncertainty, the CEE region remains attractive - from competitive labor markets to strategic location advantages“, says Grzegorz Silewicz, Manager of Economic and Market Analysis, Colliers CEE. “While short-term challenges persist, including inflationary pressures and interest rate sensitivity, the medium-term outlook remains positive, especially for cities that embrace green innovation and the flexibility of hybrid working“.
As the year progresses, office markets in CEE-6 will continue to adapt to changing tenant needs and economic realities. Demand is likely to focus on prime, ESG-compliant properties in central locations, while secondary assets may need repositioning or repurposing.
The growing role of the public sector, the evolution of flexible workspaces, and continued demand from traditional sectors such as finance, professional services, and manufacturing will shape the next stage of the region’s office landscape. Investors who focus on sustainable, high-quality projects in strategic locations will be best positioned to thrive in this environment.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found HERE