Real estate Lokale Immobilia
12:21 23 June 2022
Post by: WBJ

KRAKÓW BETS ON INNOVATION AND TECHNOLOGY

CITY SPOTLIGHT KRAKÓW Ranked first in the Forbes list of Business Friendly Cities 2021 in the category of Polish cities with a population between 300,000 and a million, Kraków attracts investors by its convenient location, advanced infrastructure, business and technology incubators and talented workforce. By Anna Rzhevkina

KRAKÓW BETS ON INNOVATION AND TECHNOLOGY

Location and infrastructure

Kraków is the second-largest city in Poland with roughly 770,000 inhabitants and is the capital of the Małopolska province situated in the central-southern part of the country. The region is one of the most important Polish bio-regions with potential for the development of life sciences, according to the Polish Investment and Trade Agency (PAIH). It is also known for high-tech, automotive, and IT services.

Kraków lies at the crossroads of major communication routes, such as the A4 freeway, which provides fast connections with Silesia, Germany, and the eastern part of Poland and Ukraine. Kraków Airport is the second largest in the country after the Warsaw Chopin Airport. For those who prefer traveling by train, Warsaw can be reached in two-and-a-half hours and Gdańsk in six hours. Major international cities, such as Prague, Vienna, Bratislava, and Berlin are also just a few hours away. Kraków is a center for the business services sector and start-ups. As more companies choose Kraków and its surroundings for their operations, Małopolska has secured the title of the only region in Poland with R&D expenditures exceeding 2% of GDP. Its heart Kraków has numerous international banks, chambers of commerce, and business support associations.

Industrial and technology parks

Kraków is part of a special economic zone (SEZ), one of 14 areas that attract investors through business incentives, such as tax exemption and developed infrastructure. Kraków Technology Park (KPT) has been reinforcing the startup community through mentoring programs, helping to find suitable office space and investors and organizing workshops and conferences. It has issued a record number of support decisions for businesses, ranking second among zone management companies in 2019.

KPT’s project Digital Innovation Hub is dedicated to supporting projects in the fields of 5G, smart robotization, and the Internet of Things (IoT). The activities are primarily addressed to businesses operating in southern Poland. In a bid to solve local issues, such as smog, KPT works with local authorities to promote business in the region with a particular focus on the life science and electromobility industries.

Another project, the Life Science Park Project offers 20,000 sqm of specialized laboratory space and office space to rent in three separate buildings. The area has been designed to suit any activity in the field of biotechnology, biomedicine, biology, chemistry, pharmacology, physics, nanotechnology, and environmental protection. The laboratory space is integrated with complementary facilities, such as meeting and conference rooms. It is owned by the Jagiellonian Center of Innovation established by the Jagiellonian University in Kraków.

Technology Park is designed for big and medium institutions and companies, while a bio-incubator is dedicated to small and startup companies and research projects.

Office space

The development of entrepreneurship is strengthened by the demographic potential of the region — there are about eight million people living within a radius of 100km from the city. About 60% of Kraków’s population is less than 45 years old. According to the data from the City Hall, more than 129,000 Kraków residents are students and more than 36,000 are graduates of universities.

As the popularity of remote and flexible work is growing, Kraków has developed structures of co-working and offices that can be rented for short periods. Even though the pandemic has changed the perception of where and how people work the prestige of a company’s location still matters. “It is precisely this uniqueness of Kraków’s location — with its infrastructure, potential, and talent pool — that enables companies to develop and prove their success,” said Jerzy Muzyk, deputy mayor of Kraków, cited by Antal.

Kraków has grown into the largest regional office market in Poland outside of Warsaw. The rental prices for office space start from PLN 30 per sqm, plus administration and utilities. Modern office space in A-class buildings rental price is about PLN 50-60 per sqm, according to real estate agency Hamilton May.

In the city center, there are large modern office buildings, including the Lubicz Office Centre, close to the central railway station. A little west of the city, there are Newton, Edison, and Galileo complexes. Another major office space is located at Bonarka, to the south of the center. To the north, there are several high-profile new developments, including the Quattro Business Park and Vinci Office Center. Around 10km to the west of the city center, there is the Kraków Business Park with office buildings that are home to major international companies, including Shell and HSBC.

Employment potential

In terms of employment potential, Kraków is one of the most promising locations in Poland, Karolina Giza, team leader at Antal, says. In 2020, when the pandemic started, some companies decided to reduce their office space as employees moved to remote work and the availability of offices for new investors increased. As the city opened up to a flexible work environment, it started attracting more candidates from other cities, Giza notes.

Kraków is among European cities where all kinds of business services are offered, from call centers to finance, IT, and knowledge management. Every year it supplies the market with thousands of university graduates that start careers in HR, administrative functions, and roles that require knowledge of multiple languages.

In Małopolska province, the average salary in the enterprise sector increased by 14.2% in a year and by as much as 82.9% compared to 2015, data from the Statistical Office in Kraków shows. The average salary increase in other Polish regions was 62.3% compared to seven years ago.

Unemployment rates in Kraków are among the lowest in Poland. Thanks to multiple international companies choosing Kraków to develop their businesses, the city attracts both, local and foreign employees who want to work in a multicultural environment.

DATA

Asking rent €15 /sqm/month

Vacancy rate 14 % 

Number of existing office buildings 202

Office space under construction 157,000 sqm

New supply 140,700 sqm

Gross demand 154,400 sqm

Total office space stock 1,554,900 sqm


kraków
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