Total demand for office space in Prague increased by 41 percent year-on-year. At the end of June, the total area of these spaces in the metropolis was 3.75 million square meters (m2), and the vacancy rate remained at 8.4 percent quarter-on-quarter. Rents for new buildings increased by 13 percent year-on-year. This follows from the data of the Prague Research Forum (PRF) association of real estate consulting firms for the second quarter of this year..
According to them, leases and subleases were concluded for areas of 123,700 m2 in the given period. This is a year-on-year increase of 41 percent, but a quarter-on-quarter decrease of seven percent. The largest realized demand was in Prague 4 (40 percent), Prague 8 (18 percent) and Prague 1 (17 percent). The biggest demand for offices was from companies operating in the field of information technology (33 percent), companies from the pharmaceutical industry (11 percent) and companies operating in the financial services sector (eight percent).
The total area of unoccupied offices was 313,400 sqm in the 2nd quarter, the same percentage as in the first quarter. “Which is a good sign,” says Iva Drízhalová, head of the office leasing department at JLL. Over seven years, the vacancy rate ranged from five to 15 percent. The level of 8.4 percent can therefore be considered standard, Drízhalová added.
According to the data, the largest vacant office space was located in Prague 4 (75,800 m2) and Prague 5 (49,300 sqm). The fewest were in Prague 10 (9,800 sqm). The highest vacancy rate was in Prague 3 (26 percent) and Prague 9 (22.4 percent), the lowest in Prague 7 (4.4 percent) and Prague 8 (5.6 percent).
22,700 sqm of new office space was recently completed in two buildings, Dock In Five in Prague 8 (20,500 sqm) and Košířská brána (2,200 sqm) in Prague 5. Another six projects with a total area of 28,800 sqm are expected to be completed by the end of the year. “There is certainly room for new, larger, modern projects on the market. We expect an even lower volume of completed construction this year, but in the following years, larger office projects that have already been started will be completed, and further construction is in various stages of preparation,” Kamila Breen, an analyst in the research department JLL.
The largest published transaction of the second quarter of the year was the pre-lease of SCS Software (9,700 sqm) in the under-construction Roztyly Plaza building in Prague 4, PRF added.
Rents are increasing more significantly in new buildings, while in existing buildings it is not so significant. “This trend can be expected in the following periods as well,” the analysis states. In the city center, rents on average range from 25 to 25.50 euros (615 to 627 CZK) per square meter per month, 16.50 to 18.50 euros (406 to 455 CZK) in the interior and 14 to 16 euros (345 to 394 CZK) in the outer parts of the city.
Source: PRF and CTK
