According to “Office Occupier: Office Market in Krakow”, a report published by real estate advisory firm Cresa Poland, the leasing volume hit 74,100 sqm in H1 2021, accounting for 37.8 percent of the annual average for 2015-2020. Gross take-up was up by 78 percent year-on-year in the second quarter of 2021. Krakow’s office transactions accounted for 29 percent of the leasing volume recorded on Poland’s eight major regional city markets in the first half of the year.
“The pandemic has not stopped the growth of Krakow, which remains the largest regional city market in Poland. Occupier activity continued to accelerate on the Krakow office market in the second quarter, with the city centre attracting the strongest interest as most of the vacant office space, including offices for sublease, was leased out. Another demand driver is the fact that many companies have commenced recruitment and are making expansion plans. This will undoubtedly translate into office leasing volumes in the capital of the Lesser Poland region,” says Karolina Słysz, Head of Krakow Office, Cresa Poland.
Krakow’s office stock amounted to 1.6 million sqm at the end of the second quarter of 2021, having expanded by around 7.8 percent year-on-year. Its five-year compound annual growth rate averaged 17.9 percent.
The capital of the Lesser Poland region saw two office completions in the second quarter: Buma’s Tertium Business Park III (B) (13,300 sqm) and Atal’s Aleja Pokoju 81 (7,600 sqm).
Leasing volume for the first half of 2021 totalled 74,100 sqm, accounting for 37.8 percent of the annual average for 2015-2020. Gross take-up was up by 78 percent year-on-year in the second quarter of 2021 as occupiers leased about 47,400 sqm, most of which through lease renegotiations (62 percent), followed by new leases (35 percent), owner-occupier space (2 percent) and expansions (1 percent).
“Krakow’s office deals accounted for 29 percent of the leasing volume recorded on Poland’s eight major regional city markets in the first half of the year. Office take-up in the second quarter was up by 78 percent compared to the same time last year,” says Iga Kraśniewska, Research Manager, Research & Advisory, Cresa Poland.
The largest transactions in H1 2021 included: a renegotiation of 15,600 sqm in the Kapelanka 42a building (by a confidential tenant), a renegotiation of 12,800 sqm in Centrum Biurowe Kazimierz (by a confidential tenant) and a renegotiation of 11,300 sqm in Galileo, Newton and Edison buildings (by a confidential tenant).
Office absorption amounted to 9,400 sqm in the first half of 2021, down by 31 percent on the same period in 2020, which was largely due to a further increase in unoccupied office space.
The city’s vacancy rate stood at 15.5 percent at the end of June 2021, up by 0.5 pp compared to where it was in the previous quarter and up by 4.4 pp on the same period a year earlier.
Rents remain stable – from €10 sqm/month in the southern parts of the city to €15,5 sqm/month in central locations.