Kraków Office Vacancy Hits 19%, but Tenants Still Favour the City Centre

Kraków's office market is becoming increasingly selective. The citywide vacancy rate rose to 19.0% at the end of June 2026, while the central office zone remained far tighter at just 10.5%. Developers are limiting new projects and tenants are increasingly focusing on modern, well-located buildings, according to Newmark Polska's latest Office Occupier report. At the end of the first half of 2026, Kraków had 1.87 million square metres of modern office stock, 1.9% more than a year earlier. Developers delivered 27,300 sq m in the first six months — almost 130% more than in all of 2025, but nearly 86% less than the record year of 2017, when more than 190,000 sq m was completed. All new supply delivered in the first half was located in the city-centre office zone. It included Fabryczna Office Park B7, with 8,400 sq m, and buildings B and C of the WITA complex, together providing about 18,900 sq m. Only one additional project, the roughly 8,700-sq-m Soneta building in the South-West zone, is scheduled for completion by year-end. Development pipeline remains limited At the end of June, around 37,300 sq m of offices was under construction, more than 44% less than a year earlier. The largest project was the first phase of Tischnera Green Park in the South-East zone, with 24,000 sq m, accounting for more than 64% of the total pipeline. According to developers' declarations, more than 76% of the space currently under construction is expected to reach the market in 2027. Newmark says the launch of further schemes will depend heavily on securing a major tenant or sufficient pre-leasing. 'The significant availability of space in existing buildings, combined with consolidation and optimisation by occupiers, continues to limit development activity. New projects increasingly need a meaningful pre-lease commitment before construction can move forward,' said Patryk Kowalkowski, advisor at Newmark Polska. Demand rebounded sharply in the second quarter More than 73,000 sq m of office space was leased in Kraków during the first half of 2026. That was over 57% less than in the same period of 2025, when take-up reached a record 172,000 sq m. However, the headline decline masks a sharp improvement between quarters. Demand amounted to only around 15,000 sq m in the first quarter, before accelerating to more than 58,400 sq m in the second. The average transaction size fell only modestly, from around 1,400 sq m in the first half of 2025 to 1,300 sq m this year. Kraków remained one of Poland's most active regional office markets, accounting for almost 24% of total take-up outside Warsaw. The structure of demand also changed. Renegotiations fell from almost 72% of activity a year earlier to around 50%, while new leases increased from about 21% to nearly 43%. Expansions represented the remaining 7%, and no pre-leases were signed. Manufacturing companies generated the largest share of demand at 31.3%, followed by financial services at 20.2%, IT at 14.9% and business services at 8.2%. The vacancy rate returned to an upward trend in the second quarter after a slight decline over the previous six months. At 19.0%, it was 0.6 percentage points higher than in the first quarter and 1.7 points higher than a year earlier. Existing buildings offered almost 356,000 sq m for immediate lease. Vacancy was driven by both new completions and companies releasing space in older properties. Buildings completed between 2005 and 2009 recorded the highest vacancy rate, at 33.3%. By contrast, the newest and best-connected buildings are performing better. The city-centre vacancy rate was only 10.5%, illustrating the growing gap between attractive modern assets and older or less central stock. Rents remain broadly stable Headline rents were largely stable during the first half of 2026. In most modern buildings they ranged from EUR 14.00 to EUR 18.50 per sq m per month. In the newest and best-located projects in the central zone, asking rents reached EUR 19.00–19.50. High availability outside the centre continues to give tenants leverage to negotiate incentives and flexible terms. At the same time, the limited development pipeline could gradually strengthen the position of owners of the most attractive, energy-efficient and well-connected buildings. Source: ManagerPlus; Newmark Polska, 'Office Occupier – Kraków Office Market'.