Sustainability, Growth, and Opportunities Shape Office Markets in Central and Eastern Europe

Warsaw, Prague, and Vilnius lead modernization efforts while Tirana, Sofia, and Athens have older, uncertified stock. Retrofitting these buildings offers opportunities to cut emissions and boost rents,
according to Colliers' report "CEE Office Markets on the Green Path - Decarbonisation Potential," which examines office markets across 11 CEE cities 1 .

Green Certification Drives Premium Rents

Cities with high rates of green certification for modern office buildings command premium rents, reflecting strong demand for sustainable office spaces. Athens (€28.5/m²), Prague (€17.7/m²), and Budapest (€17.4/m²) lead in attracting tenants prioritizing energy efficiency and quality amenities.

Decarbonization Potential Across CEE and Energy Efficiency

Olga Drela, Associate Director, Business Analyst, Market Insights at Colliers explains: “The push toward decarbonization varies across the region. Markets like Warsaw and Bucharest are advancing with high green certification rates and modern developments, while cities with older stock, such as Sofia and Tirana, require significant retrofitting efforts to achieve sustainability goals”.

“Markets with a high share of older stock, such as Prague, Bratislava, and Budapest, face challenges in achieving energy efficiency. Significant retrofitting investments are required to meet modern sustainability standards. Conversely, cities like Warsaw and Vilnius, with a higher proportion of newer buildings, already align with advanced energy performance benchmarks” Olga adds.

Leaders in Modern Office Development

Warsaw, Prague, and Vilnius demonstrate robust modernization with 20%-45% of office supply built in the past seven years. These cities balance healthy vacancy rates with a high demand for energy-efficient, modern office spaces.

Market Maturity and Scale Attract Investors

Mature markets like Warsaw (6.2 million m²), Budapest (4.4 million m²), and Prague (3.9 million m²) offer scale and liquidity, making them attractive to institutional investors. High green certification rates in Warsaw (98%) and Bucharest (93%) further strengthen their competitiveness.

Tenant Preferences Favor Newer, Certified Buildings

Modern office spaces (0-7 years old) enjoy higher occupancy and rental rates compared to older buildings. For example, in Warsaw, vacancy rates are 5% for newer buildings versus 15% for older stock. Tenants prioritize operational cost savings, sustainability, and modern amenities.

Emerging Growth Markets

Smaller markets like Vilnius, Tallinn, and Tirana exhibit strong momentum. Vilnius leads with 45% new supply in the past seven years and a low vacancy rate of 7%. Meanwhile, Tirana, with a 22% vacancy rate, indicates potential for future growth and modernization.

Future Development Pipeline

Tirana and Vilnius are experiencing rapid growth, with substantial portions of their office stock under construction (84% and 45%, respectively). Mature markets like Warsaw, Bucharest, and Prague maintain balanced supply growth, reducing the risk of oversupply.

Adaptation to Changing Work Trends

Remote work trends have influenced tenant activity, especially in markets like Sofia and Tallinn, where older stock dominates. As hybrid work models gain traction, the demand for flexible, high-quality office spaces is expected to reshape these markets further.

Colliers