If developers deliver their projects on time, there should be plenty of office meters in Kraków. Tenants in the capital of Małopolska are primarily interested in space in districts located close to the center and well connected to the rest of the city - says Anna Madejska, advisor at Newmark Polska.

A real business district is being built in Grzegórzki. In a post-industrial area, where the former Polmos vodka factory was located, near two transport hubs - Rondo Mogilskie and Rondo Grzegórzeckie, the multifunctional Fabryczna City project is growing. As part of the investment, an office complex is also being built - Fabryczna Office Park. In December, the fourth office building with an area of ​​10.5 thousand square meters was launched on the market. sq m, and at the beginning of 2023 the fifth with an area of ​​almost 13.8 thousand sq m. sqm (future headquarters of Capgemini). A residential part will also be built in the entire multifunctional complex, and in the buildings revitalized after Polmos - gastronomy and services. In the same district, at ul. Mogilska, Strabag Real Estate has already started the demolition of Galeria Plaza, which has been closed for months. In its place, by 2025, the developer will build a multifunctional complex with office space.

Thanks to the multifunctional buildings being built in the district, as well as the activities of the city authorities, service and catering, cultural, educational and entertainment functions have developed in Grzegórzki, which attracts more investors who want to offer tenants offices in an interesting and comfortable environment. A big advantage of the district are also numerous green areas and the location in the vicinity of the Old Town and excellent communication with all parts of Krakow - explains Anna Madejska.

Podgórze is equally popular among companies looking for an office. At the intersection of Klimeckiego and Nowohucka streets, the developer Cavatina Holding is building Ocean Office Park in four stages. Ultimately, the investment will create over 52,000 sqm. sqm of office space. The first stage has already been commissioned, and next year it is planned to deliver the second, largest building with an area of ​​28,600 sqm. sqm

In the first three quarters of this year, Kraków recorded the highest demand for office space in the regions. Tenants have signed agreements for a total of almost 134,000 sq m. sqm Shared service centers are a sector that has been developing in Krakow for years. At the moment, there are over 260 entities from the BPO / SSC sector in Krakow, which in total employ over 92,000 people. people. Office space is needed both by centers that have been present in Krakow for years and which are developing, as well as new BPO / SSC companies that are starting their operations in the city.
The largest lease agreements in 2022 also belong to companies from the IT and new technologies industries. Almost 13.8 thousand sqm in Fabryczna Office Park B5 was leased by Capgemini, while Cisco Systems Poland renegotiated the contract for approx. 12.5 thousand sq m. sqm at Enterprise Park C

Due to the introduction of hybrid work systems and the increasing requirements of employees as to the quality and location of the office, some tenants are relocating to more modern buildings closer to the center, while optimizing the leased space. An example of such a relocation is the aforementioned Capgemini company, which will move to a new multifunctional complex located close to the city center - comments Anna Madejska. – Relocations to newer buildings are also caused by the search for savings in service charges. Modern buildings not only have better insulation, but most of them also use advanced technological and ecological solutions related to saving water and electricity - explains Anna Madejska.

However, not all companies decided to relocate when deciding on their locations for the near future. In the first three quarters of this year, renegotiations concerned almost a third of the space for which lease agreements were signed. Statistics show that more and more international corporations decide to move to Krakow. This year, the capital of Małopolska saw the debut of, among others, American concerns - Grass Valley and Huntsman Coporation as well as the Indian company Larsen & Taubro.

They are attracted primarily by a young and qualified team of specialists. The number of students and graduates in the city is constantly growing, currently there are almost 130,000 students in Krakow. people. According to research, the element of competition for the best employees is, among others. modern, well-located workplaces, which candidates list among their expectations as well as a good position and high remuneration. Office expectations have increased significantly after the pandemic. Candidates, already at the recruitment stage, calculate the time it will take them to commute, even if they decide to work in a hybrid system. In addition, when leaving home, they want to do shopping and go to the fitness on the way, which motivates tenants to look for offices with access to the appropriate infrastructure - enumerates Madejska.

So what do landlords have to choose from? Since the beginning of the year, developers have delivered to the market a total of over 91,000. sqm office space in eight buildings (for comparison in the entire 2021 - 60,000 sq m). The largest of them are two buildings in the Brain Park investment completed in the last quarter (a total of 29,600 sq m) and the fourth office building in the Fabryczna Office Park complex (B4, 10,500 sq m). More than 125,000 sqm are under construction. sqm and if only the developers keep their promises, many of these spaces will be delivered next year. The largest expected projects are: Ocean Park B (28,600 sqm), Kreo (24,000 sqm), Fabryczna Office (B5, 13,800 sqm), The Park Kraków 2 (12,500 sqm) sq m) or Mogilska 35 Office (10,600 sq m). Rents in the city have been stable for several quarters.

We expect that due to inflation and rising construction costs, as well as high interest in new supply, rents in class A buildings will start to grow. At the same time, in older office buildings, due to the very high availability of these spaces and the decreasing interest in them from companies, we can expect pressure from tenants to renegotiate rents and incentive packages, predicts Anna Madejska.

Kraków, as the largest regional office market, is still an attractive choice for investors and tenants.

This is supported by a wide selection of office space in existing projects and investments under construction, as well as the highest volume of lease transactions among the six largest regional cities. I think that the relatively high new supply expected for the coming year will attract companies that have not been present on the local market so far, and will encourage the existing tenants to stay in the city - sums up Madejska.