The 3,510 sqm Diamant building on Prague’s Wenceslas Square was the only office project delivered in the third quarter, the lowest delivery volume on the Czech market since Q1 2010, according to Colliers International. Construction on a number of new office projects did, however, start in the third quarter of this year, including Copa Centre Národní and Jungmannova 15 in Prague 1, Palác Stromovka in Prague 7 and Karlín Hall II in Prague 8.
A total of 44,500 sqm was leased in Prague during this period, a 39 percent drop from Q2 and 11 percent off the pace from Q3 2011. The structure of take-up changed slightly in favor of net demand, which amounted to 42 percent, meaning that renewals decreased to 36 percent. The rest was relocations within Prague. Prague 8 was the most active district, taking 22 percent of the total take-up, followed by Prague 7 with 18 percent.
The average vacancy rate in Prague increased by 0.3 percent q-o-q. The largest increase, from 10.25 to 12.9 percent, was recorded in Prague 1 thanks to the delivery of the Diamant building, which has yet to announce any lettings. The largest drops in vacancy were seen in Prague 6, from 21 to 16.6 percent, and Prague 9, from 34.8 to 32.6 percent.
“We anticipate the vacancy rate to exceed 12 percent by the end of 2012 due to the delivery of new office space and weaker occupier demand,” said Omar Sattar, Managing Director at Colliers International Czech Republic. “The total take-up by year end is not expected to reach the record levels of 2011; however, it could total around 250,000 sqm.”
