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City of Office Buildings?
Dziennik Polski, 09.07.2008


Article in Polish

The growth of Krakow is helped by the development of large commercial centres offering alternatives to the Old Town and its surroundings. However, it would be ideal if the City took the effort to create one, very large secondary centre.

In terms of real estate developments, Krakow has so far been seen mainly as an attractive market for housing projects. There are now more flats being built in our city, the capital of Małopolska, than in the entire Polish Tri-City (Gdańsk, Sopot, Gdynia). 4,992 flats commissioned in 2007 ranks us the second in the country. From the economic perspective, this figure may seem like good news, but it is not the only statistic that determines the economic standing of a city. Warsaw, with over 3 million square meters of office space (Krakow has approximately 300,000 m2) and some 1.9 million m2 of storage and logistics facilities, is way ahead of other Polish cities.
Undoubtedly, cities which wish to grow should develop in a balanced way. Both office and storage/logistics developments play a key economic role in them and contribute to the growth of the labour market. From Krakow's perspective, their significance cannot be overestimated: space in new developments is lease by companies that offer very good salaries, and the low median salary is a weaknesses of Krakow. Analyses by the Notus Credit Brokers show that our city ranks behind not only Warsaw, but also Katowice and the Tri-City.

Attractive Bonarka
Unfavourable trends can be reversed by following a strategy which helps to attract rich developers. At present, this process is spontaneous: large office developments are erected in attractive locations, giving clear proof of high, still unused potential. It seems that this process could be accelerated by an intentional policy of creating large commercial centres that could act as alternatives to the Old Town and its environs. However, it would be best to combine the efforts of the local authorities to create one huge secondary centre, residential and commercial in nature, which could act as the engine for Krakow's continued growth in the future.
Is this possible? The great interest of large developers in Krakow suggests an affirmative answer. Municipality representatives report that by 2009, the capital of Małopolska will have 20 new office buildings with over 150,000 m2 of space. One of the largest planned projects is the Bonarka 4 Business development to be built in a large retail/service/leisure development called the Bonarka City Centre covering 19 hectares. As part of this development, the Hungarian TriGranit will build four seven-storey office buildings with the total floor space of 32,000 m2. The development has been designed by a well-known Krakow architects Artur Jasiński and Partners (and will be commercialised by Jones Lang LaSalle). The aim is to create a fragment of public space of which office buildings will form only one element, as it will also include squares and fountains, for instance. Every building, distinguished from the others by its colour and the layout of windows, finished in materials including brick, glass and natural stone, will be strikingly illuminated in the evening. The TriGranite project, valued at approximately 500 million euro (the Bonarka City Centre will include a huge shopping mall with 250 shops, a 20-screen cinema, and 9 restaurants), heralds a new stage in city development. The arrival of such a large developer, running projects totalling 2 billion euro, stimulates the interest of developers from various parts of the world in the city.

Magnet for business

In recent days, Ireland-based Quinlan Private Golub has announced the plan to erect three office buildings in the Zabłocie part of Krakow. "We got interested in Krakow because this city is exceptional in many respects. It has great location, attracts international business and has highly qualified employees" - said Jonathan Cohen, the President of QPG for Poland, during the presentation.
The Enterprise Park, situated on the southern bank of the Vistula at the Na Dołach St., will comprise three class A buildings with the total floor space of 28,000 m2. The business park has been designed so that there is one parking space for every 30 m2 of leased office space. Every building with have an elegant central reception desk and service premises on the ground floor. The development has been designed by the renowned Krakow architectural firm DDJM.
The Irish company is currently running projects worth 2.5 billion euro. Its completed developments include the Wiśniowy Business Park of Warsaw, the Warsaw Financial Center as well as the comfortable Oakland Park housing estate near Warsaw and the Forum shopping mall in Gliwice.

So can local players
Foreign developers have a successful competitor in the Krakow market: the Buma Group, based in the city, whose completed projects include the Buma Square office complex (28,000 m2) and the Rondo Business Park at Lublańska St. (in the vicinity of the Polsad Roundabout) with 18,000 m2. "Our plans include erecting several office buildings to be completed by 2012" - emphasises Piotr Michalski of the Buma Group. "The first is the Onyx office building at the Powstańców Śląskich St. with 6,000 m2 of space (designed by Mofo ) whose construction is now approaching completion, the second is the large Quattro Business Park office development of 48,000 m2 split into four office buildings of 12,000 m2 each, situated at the Bora Komorowskiego St. (designed by Professor Kuryłowicz's firm), followed by a complex of three buildings called the Green Office at Bobrzyńskiego St. (the Ruczaj housing estate). These buildings are classified as A and B+. Their features will include underground garages as well as high quality air conditioning with humidity control."
Office developments attract large companies interested in leasing high standard space. Such offices are already leased by well-known global corporations like IBM, Sabre Holdings, Lufthansa, Philip Morris, Shell, Motorola, Cap Gemini, Ahold and Google. Krakow can compete with the Polish capital in rents, but their amounts in the two cities are converging. One meter square of office space can be leased in Kraków for 15 to 17 euro, which is a price similar to that in the Mokotów district of Warsaw.

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