The previous year was record-breaking due to the largest amount of office space commissioned on the Krakow’s market. According to the experts of Walter Herz, the resources of modern office space were extended by 160 000 sq. m. Among the largest projects completed in the previous year, the experts enumerate such buildings as Axis, C and D offices in DOT Office, or CH2M Centre. Walter Herz estimates that the supply of office space exceeded 950 000 sq. m on the Krakow’s market at the end of 2016.
According to the experts, the Krakow’s office market should maintain the similar development pace in the nearest years. The buildings, the commissioning of which is planned on the years 2018-2019, offer more than 300 000 sq. m in total. The largest projects in Krakow are: the next stages of Enterprise Park, O3 Business Campus and High5ive, or the first stage of Wadowicka 3 and Astris.
There are not many vacant office areas in Krakow right now, even though there are more and more new offices in the capital of Lower Silesia. According to the analysts of Walter Herz, the vacancy rate on this market was one of the lowest in the country at the end of 2016. It oscillated between 7 per cent, that is ca. 65 000 sq. m of office areas. Interestingly, new investments should not have an impact on increase in the vacancy rate because of high demand for offices. Moreover, nearly a half of space which should be commissioned this year has already gained tenants.
There is a high market absorption in Krakow right now due to the fact that more office space was actually rented than introduced in the previous year. The value of the signed lease contracts amounts to ca. 190 000 sq. m, and nearly a half of the contracted offices in 2016 were under construction at the moment of signing.
Krakow is one of the leading European locations for the BPO/SSC industry. The increase in supply of modern offices contributed to the transformation of the city from a regional market into an international business location. The sector of BPO, SSC and ITC has been the main recipient of the Krakow’s offices for many years. This industry is responsible for ca. 70 per cent of the last year’s demand for office areas.