Vacancy rates and rents in Prague offices increased slightly in the first quarter. One office building was completed, the 21,700 sqm Roztyly Plaza in Prague 11. Currently, 58,600 sqm of office space is under construction in eight different projects. This is according to an analysis by real estate consultancy Colliers. According to the report, despite the long-term increase in rents, the capital remains an attractive location for investors. In total, Prague had 3.91 million sqm of office space in the first quarter.
Office vacancy rose by 0.3 percent quarter-on-quarter. Currently, there is approximately 292,000 sqm of office space available for immediate lease on the market. However, the most sought-after locations have significantly lower vacancy rates. For example, approximately 39,400 sqm is available in the city centre, or 6.7 per cent of the total. Pankrác also has the same proportion of vacant offices. In Karlín it is 2.7 per cent and in Brumlovka 3.4 per cent.
According to Colliers, the vacancy rate grew slightly despite the increase in office space, also because some older offices were removed from the market due to preparations for their upcoming reconstruction. According to Josef Stanek, an analyst at Colliers, offices will be renovated more and more often in the future.
“Given that the current standard of offices has moved well away from what was considered modern in the 1990s or 1990s, and also due to the complex permitting process and lack of land suitable for office development in established office micro-areas, large-scale refurbishments are an ideal way to transform the office market,” Stanko said.
The highest achievable rents on the Prague market increased slightly by about half a euro (approximately CZK 12) per square metre in the first quarter. At the end of the quarter, rents in premium buildings in the city centre stood at around EUR 28 (CZK 690) per sqm per month. In the best locations in the wider city centre, it was EUR 19 (CZK 470) per sqm and in the rest of the city it was up to EUR 16 (CZK 395) per sqm.
“Unlike in many neighbouring countries, rent growth in Prague is only moderate and the market is therefore very stable. For investors looking for a suitable destination for their offices, corporate or IT service centres or business units, Prague remains a very attractive location that can compete with countries from Central and Eastern Europe, as well as Spain and Portugal, markets where office sectors such as corporate services are currently growing,” added Stanko.
According to Colliers, the highest rents in Lisbon are currently between 21 and 28 euros per square metre per month, in Madrid between 24 and 37 euros and in Warsaw between 21 and 27 euros.
Source: Colliers and CTK
