Madison International Realty and Cavatina Holding have secured a €61 million refinancing for Chmielna 89, one of Warsaw’s most distinctive office landmarks. The financing was arranged by Santander Bank Polska in cooperation with Bank Pekao and comes at a time when credit conditions remain tight across Europe. The deal signals strong lender confidence in Warsaw’s prime office market, where well-leased, sustainable towers continue to attract capital.
A Distinctive Crystal on Chmielna Street
Chmielna 89, completed in 2020, stands out in Warsaw’s central business district thanks to its angular, multi-faceted glass façade designed by Epstein. The 14-storey, 25,000 m² Class A building has become known as “the Crystal,” and today is more than 95% leased. A leading Polish financial institution occupies nearly all of its space under a long-term contract, providing secure income for investors and stability for lenders.
The property is certified BREEAM “Excellent” and integrates energy-efficient systems, wellness amenities, and modern workplace features. These elements ensure the tower remains competitive at a time when tenants increasingly seek ESG-compliant offices.
Confidence in a Tight Market
The €61 million refinancing demonstrates how high-quality, income-producing assets remain attractive even as speculative development financing proves difficult to secure. Market data from JLL shows prime Warsaw office yields at around 5.75%. Prime headline rents in the CBD range between €22.5 and €26 per m² per month, with some top ESG-certified towers commanding over €30.
Vacancy in Warsaw’s central zones is about 7.8%, compared with a citywide average of 10.8%. With only 85,000 m² of new office space completed in the first half of 2025, supply remains tight. This imbalance supports stable rental growth, particularly in well-located, sustainable towers such as Chmielna 89.
Sponsors and Lenders Comment
“Since its completion in 2020, Chmielna 89 has firmly established itself as one of Warsaw’s leading office assets. This refinancing with two new lenders is a strong signal of confidence in the quality of the building and the long-term income it generates,” said Andrew Brown, Vice President at Madison International Realty.
“Chmielna 89 is a flagship project in our portfolio. It showcases Cavatina’s ability to deliver sustainable and architecturally distinctive offices that set benchmarks in the Polish market,” added Daniel Draga, Vice President of the Management Board at Cavatina Holding.
Deal Structure and Advisers
- Facility size: €61 million
- Lenders: Santander Bank Polska and Bank Pekao
- Legal advisers: Greenberg Traurig (for Madison–Cavatina), CMS (for lenders)
- Valuation adviser: CBRE
- Technical adviser: Gleeds
Strategic Importance for Warsaw
The refinancing highlights Warsaw’s strength as a Central European office hub. Unlike many Western capitals where hybrid work has reduced demand, Warsaw continues to record strong leasing activity, especially from financial institutions, technology firms, and shared services. Analysts point to a “flight to quality,” where tenants prefer sustainable, modern offices, while lenders favour buildings with stable occupancy and strong tenant covenants.
For Madison, which bought its stake in Chmielna 89 in 2020 in a deal that valued the asset above €100 million, the refinancing secures long-term financial stability for a core holding. For Cavatina, Poland’s largest office developer, it confirms that its flagship developments remain highly attractive to both tenants and financiers.
Outlook: Prime Assets Still in Demand
With high occupancy, limited supply, and ESG credentials, Chmielna 89 exemplifies the type of property best positioned to outperform in 2025. Rising construction costs and few speculative projects in the pipeline will continue to direct both investors and tenants toward existing premium assets.
Warsaw’s “Crystal” proves that even in a market of tighter credit, transparency and quality continue to shine.
