With 273,000 sqm in lease contracts signed, 2012 was the third most successful year the Czech office market has seen over the past 15 years. However, more than 40 percent of these contracts were renegotiations, the highest ratio in 10 years, according to DTZ. Demand, it writes, is still feeble, with companies continuing to be extremely cost-conscious and exhibiting a tendency to negotiate better terms with their current landlords rather than move. Developers, however, are continuing to feed the market with new supply, often starting new projects on a speculative basis.
“We do not see the light at the end of the tunnel for the landlords in 2013. They still have to fight for tenants,” said Radka Novak, head of the office leasing team at Cushman & Wakefield. “The developers who build new projects are increasingly aggressive. And then there is an even more aggressive group – developers with projects that are still just on paper.” Developers are agreeing to free rent period of up to 10 months for tenants who sign on for a five-year lease, she said.
