Demand for modern offices in Brno continued to grow in the first half of this year, while their vacancy rate decreased slightly. At the same time, average rents also rose slightly. This is based on data published semi-annually by the Regional Research Forum (RRF), which brings together consultancies operating on the real estate market. Lukáš Netolický from the Brno branch of Cushman & Wakefield says that the pandemic has transformed the market and new trends have emerged.
“A large number of employees got used to working from home during the pandemic. Companies now often operate in a shared model, with people working partly from home and partly in the office. But they need to incentivise employees to commute, to get them back into the office. So they need to make the offices more interesting, more attractive, with some added value. We’ve been working with a few clients recently to change the layout of the space to have more space for informal gatherings, such as a large communal kitchen or a collaboration area. This is what promotes socialization at work,” Netolický explained.
In Brno, 658,000 sqm of modern office space was available in the first half of this year, according to updated data from Cushman & Wakefield, a member of the RRF. The so-called realised demand, i.e. the demand completed by the conclusion of a contract, increased by 33 percent year-on-year to 32,100 sqm, but decreased by 17 percent compared to the second half of last year. However, this figure also includes so-called renegotiations, i.e. the conclusion of new contracts for previously occupied office space.
The average vacancy rate in Brno decreased to 10.9 per cent in the first half of the year from 11.4 per cent at the end of 2021. It is lowest in the city centre, at 4.9 per cent, in the Slatina district, where it reached 0.5 per cent, and in the Královo Pole district, where it was 7.9 per cent. The total area of vacant offices in Brno amounted to 71,700 sqm at the end of the first half of the year.
At the same time, however, rents started to rise, which have not grown since the end of 2019 and even fell in 2020. The highest achievable rent reached EUR 16.50 per square metre, i.e. about CZK 400. According to experts, the value of the highest achievable rent will continue to grow, especially in projects where developers have not yet started construction. The reason is the long-term growth in construction costs, which is related to the shortage of building materials and technological components.
No modern office building was completed in Brno in the first half of this year, but 75,300 sqm of modern office space is now under construction in nine projects, which is 18 per cent more than the average area under construction over the last five years. By the end of the first half of next year, 56,200 sqm of new space is expected to be completed.
Source: CTK
