Cracow is the fastest to increase its office resources in the regions

According to developers' announcements, this year Cracow will record the largest increase in new office supply in the regions

The absorption capacity of regional office markets in Poland in the first half of this year turned out to be similar to last year's level. In terms of demand, Cracow and Wroclaw were almost neck and neck. Cracow was second with a slightly lower rental volume. According to Walter Herz, 83 thousand sq m. of office space was contracted in the capital of Lesser Poland, and the lease structure was dominated by new contracts.

Cracow also remains the regional leader when it comes to the growth of resources, which increased by 43 thousand sq m. of space in the first half of 2023. Less than 40 per cent of total space delivered in the regions entered the Cracow market. Among the projects that emerged on the market in the first quarter of 2023 there were Ocean Office Park complex, which was expanded and Fabryczna Office Park B5 which was completed. In the second quarter of this year, no project has been completed.

Extensive investment plans

Cracow office market stands out in the regions with the amount of office space under construction. Almost 100 thousand sq m. of office space is being built in the agglomeration, which compared to the pre-pandemic period, when approximately 250-300 thousand sq m. of offices were under construction in Cracow, means a significant drop in developer activity.

Among the implemented projects in the region, there are Kreo project (22.9 thousand sq m.), Mogilska 35 (12.4 thousand sq m.), Brain Park C (13 thousand sq m.), The Park Cracow 2 (11.7 thousand sq m.), all of which are scheduled to be delivered before the end of the year. According to Walter Herz, approximately 90 per cent of space under construction is to be completed in 2023.

Cracow currently has 1.75 million sq m. of modern space. More office projects are to be built in the city. Among the scheduled projects there are such investments as Aleja Pokoju, Lubicz, Dekerta, Kapelanka, Ten Office, The Park Cracow 5-8, Podium Park 3, Dot Office, Wadowicka, Wita Stwosza, and Chopin Office.

– Similar to all regional office markets, the availability of offices in Cracow is increasing. The vacancy rate on the Cracow market has increased by 3 percentage points since the beginning of this year and exceeded 18%. However, high construction costs and the still high costs of servicing construction loans limit investors' negotiating possibilities, especially in the newest buildings. Tenants, however, are now carefully analyzing the expenses related to leasing an office, looking primarily at the operating costs in individual buildings. There is a visible trend of reducing the occupied space, while raising its standard and adapting it to today's work system - says Kamil Kowalewski, Associate Director at Walter Herz.

Flexible lease

Cracow is the second largest co-working market in Poland, after Warsaw. There are over 40 co-working spaces to let, and the total resources of flexible offices exceed 47 thousand sq m., which is nearly 15 per cent of resources available to this segment across the country. Co-working spaces and shared offices can be found throughout the city. They are very popular among tenants. Prices for a single desk vary, with the rental cost ranging from approximately PLN 700 to PLN 1,450 per month. Stable rents and high occupancy levels mean that this segment of the Cracow office market is constantly growing.

Office space rental rates in Cracow range from EUR 10 to EUR 18/sq m./month. Operating costs range from PLN 16 to PLN 29/sq m./month. Cracow is a relatively uniform office market. Rental rates are the highest in the center, while offices at the lowest prices are offered in buildings located in Czyżyny and Mistrzejowice. Developers focus on well-connected parts of the city, such as Grzegórzki, Zabłocie and Podgórze.

About Walter Herz

Walter Herz company is a leading Polish entity operating in the commercial real estate sector across the country. For ten years, the company has provided comprehensive and strategic investment consulting services for tenants, investors, and real estate owners across the country. Walter Herz experts assist investors, property owners, and tenants. They provide full service to companies from the private and public sectors.

Walter Herz advisors support clients in finding and leasing space and provide consulting in implementing investment projects in the warehouse, office, retail, and hotel sectors.

The company is based in Warsaw and runs regional branches in Cracow and Tri-City. Walter Herz has created the Tenant Academy, the first project in Poland, which supports and educates commercial tenants from all over Poland by organizing specialized training meetings. The agency introduced the Code of Good Practice to ensure the highest ethical level of services.

In 2016, Walter Herz won the CIJ EUROPE award in the Rising Star of the Year category. It also won the title of the Best Local Agency of the Year 2022 in the CIJ AWARDS competition organized in Poland, and then won at the regional level in Central and Eastern Europe in the competition during the 8th edition of the HOF Awards, winning the title of Best of the Best Local Real Estate Agency of the Year.

Please fill The form and we will do everything for you

Pursuant to Article 13 (1) and (2) of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data on the free movement of such data, and repealing Directive 95/46/EC (GDPR), we provide the following information.
1. Your data is administered by the company under the business name Walter Herz Spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw (00-867, at ul. Chłodnej 51, entered in the Register of Entrepreneurs of the National Court Register (KRS) under KRS number 0000435904, Tax Identification Number (NIP) 5272684601, Business Registry No. (REGON) 146346389, the registration files of which are kept by the District Court for the Capital City of Warsaw in Warsaw, 12th Commercial Division of the National Court Register.
2. Your personal data will be processed under Article 6 (1) (a) of the GDPR (a voluntary consent to the processing of data) for the purpose of establishing contact with you.
3. Your personal data will be stored during a six-month period.
4. You have the right to access the content of your personal data, the right to correct it, delete it, restrict the processing thereof, the right to withdraw consent and the right to transfer data.
5. You have the right to file a complaint with the supervisory body if you conclude that the processing of your personal data breaches the provisions of the GDPR.
6. Provision of personal data is a prerequisite for Walter Herz Spółka z ograniczoną odpowiedzialnością Sp. k. to establish contact with you. You provide personal data voluntarily, however, if you fail to provide personal data, it will be impossible for Walter Herz Spółka z ograniczoną odpowiedzialnością Sp. K. to establish contact with you.
7. Your personal data will not be processed in an automated manner and it will not be profiled.

1. I give a consent to the processing of my personal data, i.e. my e-mail address, by the data administrator, i.e. the company under the business name Walter Herz Spółka z ograniczoną odpowiedzialnością Sp. k. with its registered office in Warsaw (00-838), at ul. Prosta 32, entered in the Register of Entrepreneurs of the National Court Register (KRS) under KRS number 0000435904, Tax Identification Number (NIP) 5272684601, Business Registry No. (REGON) 146346389, the registration files of which are kept by the District Court for the Capital City of Warsaw in Warsaw, 12th Commercial Division of the National Court Register, for the purpose of enabling Herz Spółka z ograniczoną odpowiedzialnością Sp. k. to establish contact with me.
2. I provide my personal data voluntarily and I represent that the data is accurate.
3. I have read the content of the information clause, including the information on the purpose and methods of processing personal data and the right to access the content of my data as well as to correct, delete it, restrict the processing thereof, the right to withdraw the consent and the right to transfer data.

Cracow is the fastest to increase its office resources in the regions

Related offers