In Prague, the demand for office space increased by 41 percent
Rents for new buildings increased by 13 percent. This follows from the data of the association of real estate consulting firms Prague Research Forum (PRF) for the second quarter of this year.
According to them, lease agreements 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 m2 in the 2nd quarter, the same percentage as in the first quarter. “Which is a good sign,” Iva Drízhalová, head of the office leasing department at JLL, which is a permanent member of the PRF along with CBRE, Colliers, Cushman & Wakefield and Knight Frank, told ČTK. 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 m2). The fewest were in Prague 10 (9,800 m2). 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 m2 of new office space was completed in two buildings, Dock In Five in Prague 8 (20,500 m2) and Košířská brána (2,200 m2) in Prague 5. By the end of the year, it expects to complete six more projects with a total area of 28,800 m2. “There is certainly room for new, larger, modern projects on the market. This year, we expect an even lower volume of completed construction, but in the coming 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 JLL’s market research department, told ČTK.
The largest published report of the second quarter of the year was the pre-sale to SCS Software (9,700 m2) in the Roztyly Plaza building under construction in Prague 4, PRF added.
Rents are rising significantly for new buildings, while not so much for existing ones. “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.