Tenants want to stay longer in Kraków

According to the report ‘Office Occupier: Office market in Krakow 1-3Q 2020’ prepared by the consulting company Cresa, the total volume of transactions concluded in the first three quarters of 2020 amounted to 140,000 sqm, while in the period from July to September a total of 25,400 sqm was leased. The largest percentage share in the demand structure fell to renegotiations (47 percent), followed by new contracts (44 percent) and expansions (9 percent).

“The third quarter of 2020 brought significant changes to the office market in Kraków in terms of tenant activity. Renegotiations and an increased number of sublet offers were a visible trend. Some tenants, who had a guaranteed expansion option in their contracts, decided to give up this option when renegotiating the contract. Market absorption decreased, which translated into a higher vacancy rate. Many companies withheld the decision to open a new office in Kraków until the economic situation related to the pandemic stabilized,” Karolina Słysz, Doradca, Business Development Coordinator in the office tenant representation department of Cresa Polska, said.

The largest lease transactions in Q1-3 2020 include: renegotiation of the ABB lease agreement in the Axis office building (20,000 sqm), pre-let 14,500 sqm by a confidential tenant in Tertium Business Park II, a pre-lease agreement concluded by Lufthansa Global Business Services for 8,300 sqm in Wadowicka 3 (building B) and renegotiation of a contract for 8,000 sqm by Ericsson at DOT Office E.

“Among all regional markets, the largest amount of new office space has been delivered since the beginning of 2020 in Kraków – as much as 107,300 sqm. Despite the pandemic, it is still 20% more than in the corresponding period of the previous year,” Iga Kraśniewska, Analyst in the market research and consulting department at Cresa Polska, added.

(WBJ)