2022-03-18-莱坊-Kraków_-_Real_Estate_Market_2022_20页_23mb

Executive Summary: Krakow Real Estate Market

Overview

Krakow remains a leading regional market in Poland, though the ongoing COVID-19 pandemic has impacted tenant demand and market absorption, particularly in the office sector. Despite challenges, certain sectors like coworking and retail show signs of recovery, while investment activity has increased. The city continues to attract international attention due to its strategic location, growing tourism, and cultural assets.

Detailed Sector Analysis

Office Market

• Trends: Weaker tenant interest has increased vacancy significantly (to 16.1%), especially as companies delay leasing due to uncertainties in work models.
• Supply/Demand: New supply reached ~60,000 sq m in 2021, down from pre-pandemic averages; asking rents averaged EUR 10.5-17/sq m/month.
• Key Challenges: Reduced take-up, high vacancy, and reluctance to commit due to changing workplace strategies. Krakow's office stock dominates Poland's regional markets.

Coworking Market

• Growing Demand: High demand driven by the shift to hybrid work, especially in city-center locations (almost 100% occupied).
• Trends: Flexible lease terms are crucial; Krakow leads Poland in the volume of coworking spaces due to its balanced real estate mix and supportive ecosystem.

Retail Market

• Recovery: Retail turnover in shopping centers partially returned to pre-pandemic levels (+127% vs. 2020); average footfall improved but remains below 2019.
• Supply/Demand: New supply rose in 2021 (+87,000 sq m); vacancy rate dropped significantly (3.0%), though yields for modern warehouses remain high (EUR 4.00-4.50/sq m/month). Designated retail parks (e.g., Atout Ruczaj) dominate the market.

Warehouse Market

• Growth: Largest annual growth in warehouse transactions (223,000 sq m leased), with investments concentrated in the east (Nowa Huta, Tarnów, etc.).
• Challenges: Poland-wide share (3.0%) still lags major hubs like Warsaw; supply continues to grow (anticipated +75,000 sq m in 2022).

Hotel Market

• Impact of COVID: Occupancy improved gradually (from 31% in 2021), but remains below pre-pandemic levels; domestic tourists dominate (over 90%). Investment activity continues (6 hotels under construction).
• Trends: Focus on smaller luxury hotels targets international tourists. Lower vacancy and improving occupancy point to recovery, though genuine recovery may require 2023 or later.

Investment Market

• Overall Performance: Investment increased significantly (EUR 5.75 billion in 2021), ranking third historically, though transaction activity remained cautious (preferences for value-add deals).
• Sector Focus: Warehouses and prime office assets in key cities (Krakow, Wrocław) led transactions. Retail investment targets smaller centers, while the hotel sector saw limited activity.

Key Highlights & Conclusions

• Coworking and Retail: Strongest recovery signs in these sectors due to hybrid work adaptations and post-pandemic retail behavior changes.
• Industrial Assets: Warehouse growth is robust, though limited by higher land costs and competition from other regions.
• Challenges: Ongoing vacancy pressures in offices and mixed rental-stability issues across sectors (especially office and retail). Broader economic and health uncertainties limit confident investment.