Krakow, as Poland's second-largest office market, is undergoing dynamic transformation. Data from early 2025 quarters show trends that may appear contradictory: vacancy rates are falling, but available space for tenants may be harder to find. What does this mean for companies seeking office space?
As tenant advisors (not intermediaries working for owners), we have analyzed the latest market data to help you understand what's really happening in the Krakow market and which negotiation strategies work.
Vacancy Declining-Faster Than Poland's Average
Over the past 12 months, the Krakow office market vacancy rate has fallen from 17.2% to 15.5%-a reduction of 1.7 percentage points. For comparison:
Krakow ranks fifth in terms of vacancy reduction speed-below Poznan, but faster than many other cities. This indicates significantly better market absorption in recent months.
Demand Exceeds Supply-Substantial Absorption Surplus
Quarterly data show that in each quarter of 2025, demand for office space significantly exceeds new supply. Estimated absorption surplus reached +79,700 m² nationwide, with significant contribution from the Krakow market.
For tenants, this means one thing: there's increasingly less space to choose from. Companies that waited "until something appears" may now find themselves in a situation where preferred locations are already occupied or at very high prices.
Krakow in Polish Market Hierarchy
Vacancy in Krakow currently stands at 15.45%-placing the city in the middle of Polish metropolitan rankings:
| City | Vacancy (%) | Assessment |
|---|---|---|
| Warsaw | 9.3% | Tight market |
| Poznan | 10.9% | Tight market |
| Krakow | 15.45% | Moderate |
| Wroclaw | 17.9% | Liberal |
| Lodz | 17.9% | Liberal |
However, this average masks significant geographic differences within Krakow.
City Center and South-Surprisingly Tight Markets
While city-wide vacancy stands at 15.45%, zone data shows a dramatically different picture:
- Krakow City Center: Vacancy below 8%-practically full market, similar to Warsaw.
- South: Also tight-large companies seeking premium space may have serious difficulty finding Class A buildings.
- Other districts: Stable situation with greater availability.
Class A-The Future, But Already Under Pressure
The Class A segment in Krakow shows 17% vacancy-moderate. However, the trend is downward, meaning good properties are quickly absorbed.
This means tenants seeking modern, certified buildings (with ESG requirements) will have increasingly limited choice. We recommend early planning for changes-to avoid finding yourself in a situation where the only option is an expensive location or a quality compromise.
Recommendations for Tenants-Location Scenarios
Scenario 1: Headquarters in City Center or South
Market status: Tight, renegotiation approach necessary.
- Tactic: Rather than seeking a new location, consider renegotiating with your current owner-improvements or rent reductions may be possible if you extend your lease.
- Alternative: Redesigning current space-layout changes, investment in employee experience-may be more cost-effective than relocation.
- Timeline: If change is necessary, plan 6-9 months ahead. Good City Center/South locations don't wait.
Scenario 2: Headquarters in Other Districts
Market status: Stable, more options available.
- Tactic: You have more negotiating power. It's worth comparing several options and negotiating technical terms (fit-out, trial periods, space modularity flexibility).
- Opportunism: This is a good time to negotiate long-term contracts with reasonable rent escalations if you're planning a 5-7 year perspective.
Conclusion: The Market Isn't Ending-It's Polarizing
The answer to "is the tenant market ending?" is no -but the market is polarizing. Good locations (City Center, South, Class A buildings) are becoming increasingly scarce. Other areas remain available and open to negotiation.
For companies making relocation or renegotiation decisions, the key lesson is: plan ahead, consider alternatives (renegotiation, redesign), and if change is necessary, be prepared for price pressure in top locations.
Brookfield Partners, as a tenant advisor, helps companies in each scenario, ensuring your interests come first.