The fourth quarter of last year was an extremely strong one for Prague’s office market, with new supply reaching 136,000 by the end of December. The new buildings completed in the final three months of the year provided 70,400 sqm of fresh stock: PalĆ”c Å pork (6,600 sqm), Main Point PankrĆ”c (22,000 sqm) as well as PankrĆ”c Prime Office Building (7,500 sq m), Aspira Business Centre (16,400 sqm) and AFI KarlĆn (17,900 sqm). According to JLL research, the share of A class office space stands at 72 percent, with AAA class buildings now making up 19 percent of the total stock. The reports finds that Prague 4 is home to 27 percent of the total stock, while the next closest districts are Prague 5 (17 percent) and Prague 1, which houses 16 percent. JLL writes that over 308,000 sqm of new office space is currently under construction, with three new schemes having gotten underway in QIV 2017. Strong demand has driven vacancy down to 7.5 percent, a 25 bps decline from QIII and the lowest level on record since 2008.
āFor the whole of 2017, demand exceeded supply,” said Martin StriÄko, JLL Senior Research Analyst. “The result is the lowest vacancy rate in the Prague office market after almost ten years, which stood at just 7.5 percent at the end of the year. Gross take-up exceeded 100,000 sq m in each quarter of the year for the first time. That is an historical milestone. For 2018, we expect another supply growth with more than 200,000 sq m of new office space, of which almost half is already pre-leased. Depending on current market developments, it can be assumed that there will be no significant increase in vacancy rates.ā
