KRAKOW INVESTORS’ GUIDE 2014
CBRE, the world’s largest commercial real estate advisor, together with Randstad, HR solution provider, have published the Krakow Investors’ Guide 2014.
Warsaw, 16 April 2014 – CBRE, the world’s largest commercial real estate advisor, together with Randstad, HR solution provider, have published the Krakow Investors’ Guide 2014.
Office market and modern services sector
With a stock of modern space of 635,000 sq m, Krakow ranks second to Warsaw in terms of the size of the office market.
The vacancy rate in all office buildings in Krakow, including buildings occupied by their owners, amounted to 5% at the end of Q4 2013, which translated into 31,000 sq m available for immediate lease.
As compared to other Polish regional cities, rental rents in Krakow remain at a relatively high level. Currently, rents for prime office space range from EUR 13.50 to 16.00/sq m month. The highest effective rents amount to EUR14.00/sq m/month. Operating costs in modern office buildings range from PLN 13.00 to PLN 15.00 /sq m/month.
Krakow is believed to be the most important centre of BPO / SSC activities, not only in the country but also in the whole European region. There are over 60 service centres in the city, which altogether employ nearly 20,000 people.
Kamil Tyszkiewicz, Associate Director – Office Agency at CBRE, said:
“Due to the strong performance of the BPO / SSC tenants and a strong position of the city on the outsourcing map of Europe, the demand for modern office space in Krakow should remain strong.”
With the amount of retail space at the level of 265 sq m per 1,000 inhabitants, the Krakow agglomeration is one of the less saturated regions among the largest Polish cities.
The retail vacancy rate in Krakow amounted to 4.9% in Q4 2013, which is one of the highest results among Polish cities with a similar number of inhabitants.
Beata Kokeli, Senior Director – Retail at CBRE, commented:
“The increased vacancy is caused mainly by the new retail schemes, which have not been fully commercialised upon completion as well as by older shopping centres that need renovation and repositioning. Furthermore, shopping streets play an important role in Krakow, succesfully competing with modern retail schemes.”
The most important new shopping centre, planned in the near future is Serenada (42,000 sq m) by Mayland. Galeria Kazimierz is currently renovated and recommercialised.
Contrary to other large cities in Poland, rents at locations in major shopping streets in Krakow (EUR 65 - 70 /sq m/month) are higher than rates in shopping centres (EUR 40 - 50 /sq m/month). The limited amount of new retail space supply to be delivered in the near future should result in rental rates remaining at the same level.
Industrial and logistic market
The total supply of warehouse space in the region is 200,000 sq m. The largest facilities include the Kraków Airport Logistics Centre (56,000 sq m), Centrum Logistyczne Olkusz (41,000 sq m) and MK Logistic Park (32,000 sq m).
There are a few projects at the planning stage. The most important include BIK’s Centrum Logistyczne Krakow III (20,000 sq m) and 7R Logistic Krakow.
The vacancy rate amounted to 7% at the end of 2013, which translated into 15,000 sq m available immediately.
Rental rates amount from 3.75 to 4.75 EUR/sq m/month. Effective rates range from 3.25 to 4.00 EUR/sq m/month.
Patrick Kurowski, Director – Industrial & Logistcs at CBRE, commented:
“Various branches of industry are developing in the region, including the pharmaceutical industry, production of construction materials, food processing, production of steel, advanced technologies and the services sector. Krakow’s strength is the extensive railway network and the developing Krakow-Balice airport which allows fast transportation to both the largest Polish cities and numerous European capitals.”
One of the essential elements analyzed by new investors planning new investments in the area is the risks and costs of acquiring human capital. High availability of qualified staff, attractive labour costs from an employer’s perspective and social infrastructure are the advantages of the Krakow region for the service providers, especially those related to higher technology. These factors place Krakow in a leading position which will not be compromised in terms of acquisition of new jobs and the amount of people working in companies of the SSC / BPO type.
Krakow as an efficient centre of education and research and development promotes the city as a new place for people who are relocating to live, and places Krakow among the leading cities where people want to work, live and earn.
Sylwia Kłyczek, Randstad Professionals Regional Manager, added:
“Krakow remains an unrivalled leader in SSC/BPO and the new technologies sector, securing employment for more then 20,000 people. Investors are eager to open new business centres in this city due to attainability of well-educated, competent employees. The development of business, on the other hand, attracts to Krakow people with the most desirable competences thus creating favourable conditions for further development of both the city and the people.”