With office resources at a level of 1.82 million square meters, Kraków consistently remains a leader among the regional markets in Poland. In the first half of 2024, new supply amounted to 14,000 square meters, and tenants signed agreements for over 93,000 square meters, making it the best result among the regional cities.
The total office resources in the Kraków office market stand at 1.82 million square meters, accounting for 14% of the country’s total office resources.
“The activity of developers has noticeably slowed down in most of the cities we have analyzed. This trend has also not bypassed Kraków, where only two projects with a total area of 14,000 square meters were completed in the first half of the year. If schedules are maintained, the market will be supplemented by another 10,500 square meters by the end of the year. The expected annual result will be significantly below the five-year average of 110,000 square meters,” – comments Dorota Lachowska, Director of the market research department at Knight Frank.
In 2025, developer activity will also not return to previous results, and the projects being implemented are expected to supplement the Kraków office market by 32,000 square meters.
“The first six months of the year saw a 13% increase in demand for office space. In this period, tenants signed lease agreements for 93,000 square meters. This was the highest result among regional cities, accounting for 33% of the total transaction volume in these cities,” – adds Monika Sułdecka-Karaś, Partner, Regional Director at Knight Frank.
The largest share in the lease structure fell to renegotiations, which accounted for half of the leased area. New contracts also remained at a high level, amounting to 44%. Few tenants still decide to expand, and the share of extensions constituted nearly 5%.
At the end of June 2024, the vacancy rate in the Kraków office market remained unchanged compared to the first quarter and stood at 20.2%. Central locations are characterized by less availability of free space, and the vacancy rate is at the level of 11.9% (a decrease from 12.6% relative to the first quarter). In other areas, vacancies increased, but a small area under construction may result in a decrease in the rate in the future.
Asking rents in Kraków as of the end of the first half of 2024 remain stable, usually ranging from 10 to 16 EUR/square meter/month, while in the most prestigious buildings they can reach 18 EUR/square meter/month. The average cost of service charges, which have risen in previous years, remained stable in the first half of 2024, usually ranging from 16.00 to 29.00 PLN/square meter/month.
Source: https://managerplus.pl/stabilny-popyt-na-powierzchnie-biurowe-w-krakowie-14909
