Kraków with record high new office supply and net demand

Kraków will see a total of 105,000 sqm of new office space delivered in 2014, the highest new supply in its history. The southern city is the second largest office market in Poland, with 648,000 sqm of office space (at the end of Q3 2014). At the end of the year its entire stock should come in at 671,000 sqm, according to JLL. Major completions in Q3 include: Skanska’s Kapelanka 42 (building A) of 17,300 sqm (recently sold to a privately held Polish investment fund for €29 million), Enterprise Park II C (13,600 sqm), Quattro Business Park D (12,200 sqm), Orange Office Park I (8,100 sqm) and Futuro (1,100 sqm). The ceity still has 106,000 sqm of office space under construction. Barring any changes in developers’ plans, the market will see 83,000 sqm of office space in 2015 and 93,000 sqm in 2016. Kraków’s vacancy rates remain the lowest among all office markets in Poland, at 6 percent. Its net take up has been strong for the past three years (an average 80,000 sqm per annum in 2012-2013). Tenant activity during Q1-Q3 of 2014 outperformed these results and reached a record-breaking 85,000 sqm. The demand for office space is fueled mainly by the BPO industry. “Kraków remains a key location for the business services sector. … The business services tenants’ share of occupied office space in Kraków is 55 percent. It is also worth noting that 70 percent of all registered take-up in 2013 was down to companies from this segment of the economy,” said Rafał Oprocha, head of Kraków Office, JLL.