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Rent rates have stabilized, and the interest in new office space in Kraków is growing. Launching of new projects, as exemplified by Bonarka 4 Business, Quatto II, or Jasnogórska II can be a very positive symptom.
The growing interest of investors in new projects means that new projects will enter the market in 2012, and confirms that construction companies positively perceive future demand for office space.
Kraków is the second largest (after Warsaw) office space market in Poland. Last two years were however hard, both for builders constructing new office buildings, and owners of already existing, yet not leased out facilities. A lower interest on the part of tenants and an increase in the level of unoccupied buildings (ca. 14%) resulted in turn in the drop of rent rates.
In early 2010, modern office space resources in Kraków amounted to 365,500 sq.m. In that year three large office buildings of the total leasable space area of almost 33,000 sq.m. were put into use: Vinci Office Center (18,720), Avatar (12,500), and Frax Office (1,470). One-third of offices in Kraków are concentrated in three office complexes: GTC Korona, Buma Square, and Kraków Business Park in Zabierzów near Kraków.
Report prepared by Colliers International shows that the lowest number of office buildings can be found in the centre of the city, mainly due to the existence of its historic downtown built-up areas. These are old tenement houses, adapted for business purposes, which are of an overriding importance in those areas. This, however, not always can satisfy the needs of big corporate tenants since offices in such buildings either do not meet the required standards, or are too small for a specific company.
It is far better in other parts of the city near the Grzegórzeckie and the Mogilskie Roundabouts, where such office structures as Centrum Biurowe Lubicz I and II, and M65 Meduza have been located.
Considered in that respect also the north-western part of Kraków develops well – the fragment of Armii Krajowej Street, as well as areas surrounding the Ofiar Katyna Roundabout include such facilities as, among others, GTC Korona office complex, Brama Bronowicka, and Centrum Zasada. New projects in that area have already been scheduled.
The third zone of a high office space concentration is the south part of Kraków. To the west of Zakopiańska Street there is Buma Square office complex, while Wadowicka Street and areas along Wielicka and Kamieńskiego Streets have, among others, Arge, Bonarka 4 Business, and Budomat office buildings. The developing districts of Pychowice and Zabłocie also flourish (Green Office and Diamante Plaza office buildings, respectively).
With the emergence of new projects, another zone is being developed in the north part of the city. It stretches from the Opolska Street / 29 Listopada Avenue junction (the contemplated Echo Investment project), along Lublańska Street (Vinci Office Centre), through the Polsadu Roundabout (Rondo Business Park, Quattro Business Park) down to Pilotów Street (Etiuda).
One should also mention the commune of Zabierzów near Kraków, with its Kraków Business Park office complex (58,000 sq.m.), and Technological Park in the district of Czyżyny.
Main tenants in offices in Kraków are businesses from the service provision sector, which have anchored in the city for good. The BPO companies, which have chosen Kraków, include such names as Shell, IBM, Capgemini, State Street, Philip Morris, International Paper, Electrolux, Sabre Holdings, HSBC, KPMG, Ahold, Hewitt Associates, and Intelenet Global Services. One can find in Kraków also research and development centres, operated by Google, ABB, Delphi Automotive Systems, Lurgi, Pliva, and Motorola.
The starting rent rates for class A office space in Kraków are presently on the level of EUR 12-16 per sq.m. Yet, they are negotiable as developers realize the high percentage of unoccupied office space available in Kraków. It is also possible to purchase premises in modern office buildings. One of such projects, in which offices have been sold out is, for example, the Colosseum office tower in the district of Ruczaj. Now offices for sale are offered by GTC in Pascal Building, and by Wawel Serwis in Wielicka Business Center.
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