Krakow modern office space market is growing continuously for 10 years. With the total estimated office space of about 390 thousand sq m, Krakow is currently ranked first among Polish regional markets.In the national listing, Krakow is just behind Warsaw - claims the report "The office market in Krakow. The third quarter of 2011 ", developed by Knight Frank company.
Krakow is the best among regional cities
The total stock of modern office space in the city is estimated at about 390 thousand square meters
Despite the upward trend, as in most office markets in Poland, 2011 will be the weakest year for Krakow for 5 years in terms of the newly implemented supply. At the end of December there will be only 26.7 thousand sq m delivered. The cause of this disadvantageous situation include introduced in 2009, tightened lending criteria by the banks financing the office investments (eg. minimum level of pre-lease of 30-50 percent of the surface). Developers who did not meet the prescribed requirements were forced to halt investment processes. The first signs of market recovery was observed only at the beginning of 2010.
As for the demand side, in the first three quarters of 2011, the continuation of high activity of tenants was noticed. The structure of the transaction was dominated by new business and increase of the area already leased (60 percent.). the remaining 40 percent. were renegotiated. To the end of September, the leased space amounted to 70 thousand sq m of office space, which is about one-fifth more than in the same period last year. High demand generated mainly by BPO / SSC sector, for which Krakow is usually indicated location.
Quickened demand contributed to lower vacancy rate. The vacancy rate for office space in Krakow is at about 42.5 thousand sq m (10.9 percent of overall resources).
In the past nine months rents have stabilized. In late September, asking rents for office leases in class A buildings ranged between 14 and 16 EUR / sq m / Month, while Class B buildings between 10 and 13 EUR / sq m / Month.
As analysts predict, in 2012 there will be over 50 thousand. sq m of new office space completed in Krakow. Supply in the forthcoming years will be created by the office projects that remain in the planning stage now. Still growing demand for new space will further reduce vacancy rates and rental rates will remain at the same level.Download PDF