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After a stagnation and a loss of interest in leasing, something is finally stirring. There is a chance that new offices in Krakow will fill with staff.
Developers are already finalising office developments started two years ago (e.g. Green Office, Quattro Business Park). Construction has also begun on subsequent office blocks (e.g. the 2nd stage of Bonarka4Business), as tenants have come back to the market following a period of stagnation. Several large multinationals, like Shell, Capgemini, IBM, State Street or Deloitte have located their offices in Krakow.
However, the times of waiting in a queue to lease any office in Krakow, like after Poland joined the EU in 2004, are over. At that time developers, spurred on by the great interest, started constructing modern offices all at once. Copernicus, Lubicz Office Centre, Galileo and Buma Square were opened, while construction also started on offices within the Kraków Business Park in nearby Zabierzow.
“And then the crisis hit. It was 2009. 90,000 m2 of modern offices were commissioned and stayed empty. Vacancies reached 17 per cent” - recalls Jarosław Czerski from the Analysis Institute - Property Market Monitor. Many developers suspended works. This was the fate of the Pascal office block in the Lea St., for instance. Others decided to build in stages.
“Last September we commissioned the first of four buildings of the Ouattro Business Park in Gen. Bora-Komorowskiego Ave. Its main tenant is Capgemini Poland. In January 2012, we plan to hand over the second office block and a multi-level car park. At the first building we have only one unit of some 230 m2 left to let” – says Monika Franaszek of the Buma Group.
Two (of the planned four) office buildings of Bonarka4Business now stand right next to the Bonarka City Center shopping mall in Kamieńskiego St. Buildings A and B have been leased completely. Leasing is in progress of building C, to be completed in the second half of next year.
There is also a chance for completing the Pascal office block (in Lea St.), belonging to the Globe Trade Center. It is to offer over 5,000 m2 of class A office space. Pascal completes the cluster made up of three buildings already there: Galileo, Newton and Edison. “Finally, for the first time in two years, we are observing a significant recovery on the market. There is an increasing number of enquiries about offices in this building, so I believe we will be able to complete its construction" - says Katarzyna Pankiewicz, office leasing manager at GTC.
Action in the office business also comes from companies present in Krakow for a long time. They have grown and now need new sites. This is the case with Motorola, for instance, which has occupied a building in Bobrzyńskiego St. since summer. Now its employees are gradually moving to two Green Office buildings at 82 Czerwone Maki St. It is a development of three four-storey buildings. The first was commission in May, the second will be occupied by Motorola staff in a month, and the third is under construction. 30 per cent of the development grounds will be covered with greenery, the buildings are fitted with solar panels as well as sockets for charging electric vehicles.
The rent for a meter square of office space in class A buildings in Krakow amounts to €13 - €14 a month, or €11 - €12 in a class B office. This rate is similar to other larger Polish cities with the exception of Warsaw, where rents range from €18 to €25 in the downtown and from €12 to €16 outside it.
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