Free office space in Prague and Brno is dwindling, warns Cushman & Wakefield in its most recent office market report. The office vacancy rate in Brno, as well as in Prague, has slipped below 10 percent. Both cities are experiencing the lowest office vacancy rates in the last decade. Brno recorded a sharp decline of 2.4 percentage points in H1 2017, while in the capital there was a surge in demand, climbing to 153,500 sqm in Q2 2017, up 45 percent on the previous quarter and 36.9 percent y-o-y. Overall, more than 370 deals were reported in Prague in H1 2017, many of which were pre-leases. In contrast, there was an 8-percent drop in leases in Brno to 25,300 sqm compared to H2 2016. “Prime rents in the center of Prague now stand at €21/sqm, although in isolated cases we have also recorded nominal rents much higher than that. In the current climate, Prague 1 is beset by a major shortage of high-quality large-scale offices, so we can expect significant pressure on price growth in the next year,” says Radka Novak, Partner and Head of the Office Agency at Cushman & Wakefield. In Brno, there was a rent increase of €0.50 to €13.50 per sqm, as forecasted. However, the rent can exceed the stated price levels, especially for quality properties in the center.
