Vacancy rate in the Prague office market decrease in Q4 2024 has been the largest since 2018, reports Prague Research Forum in its Office Market Figures for Q4 2024 and 2024. The report has also revealed the record annual take-up and the overall situation of the market.
At the end of Q4 2024, the total office space in Prague increased to 3.96 million sqm. During the fourth quarter of 2024, only one office project, the refurbishment of 100 Yards in Prague 1, was finished. This project increased modern office stock by 3,300 sqm. As anticipated, the total new supply for 2024 reached 72,800 sqm across eight projects. For 2025, only 24,600 sqm of new supply is expected.
No new construction or refurbishment projects were initiated for the second quarter in a row. The total office space under construction at the end of Q4 2024 was 164,300 sqm. However, the majority of this space has already been taken. The largest volume of offices under construction is located in Prague 5, within the Smíchov City project.
The majority of modern office stock (74%) comprises Class A buildings, while the highest-quality AAA-rated space accounts for approximately 21%.
„Prague office market finished the year 2024 with record levels of take-up but with minimum new office development planned for the coming years. As a result, the vacancy rate started to drop to the current level reaching 7.3%. Such a number is still considered healthy; however, large office transactions tend to face difficulties in finding a sufficient number of comparable options for relocations. The limited pipeline of new speculative developments will amplify the imbalance between supply and demand. The office market will slowly turn into the Landlord-favourable market,“ commented Jana Vlková, Head of Office Agency & Workplace Advisory, Czech Republic at Colliers.
Total gross take-up (including renegotiations of existing contracts and subleases) in Q4 2024 reached 185,100 sqm, representing an 11% year-on-year increase and a 39% quarter-on-quarter increase. New leases and expansions accounted for 38%. Thanks to several large pre-leases, these contributed 12%. Renegotiations were 48% of the gross demand, while subleases accounted for the remaining 2%. Prague 4 recorded the highest gross demand (30%), followed by Prague 1 (16%) and Prague 8 (15%).
Demand was fairly distributed across several sectors. Technology companies led with 18% of the gross take-up, followed by Finance (14%) and Energy companies (14%).
In 2024, gross take-up reached 636,700 sqm. The volume from 2022 was surpassed by 18%, and the previous year’s total was exceeded by 21%. New leases and expansions represented 33% of annual gross take-up, preleases 16%, and subleases 2%. The expected large share of renegotiations reached 49%.
Most demand during 2024 was recorded in Prague 4 and 5 (both 25%), followed by Prague 8 (17%).
The leading sector of demand in 2024 was Financial companies (25%), followed by Technology (18%) and Professional Services (8%).
Net absorption reflects the change in occupied office space on the market over a given period. A positive absorption of 31,100 sqm was recorded in Q4 2024, meaning that office occupancy in Prague increased significantly. The office vacancy rate in Q4 2024 decreased by 66 basis points from the previous quarter to 7.3%. The total vacant modern office space volume in Prague declined to 290,700 sqm. The lowest vacancy rates were recorded in Prague 2 (2.6%) and Prague 8 (3.6%). On the contrary, the highest was seen in Prague 3 (19.0%) and Prague 10 (12.0%).
Prime rents increased marginally and within the city centre, between €28.50 and €29.50 per sqm per month. In the inner city, prime rents remained between €18.50 and €19.50. The outer city locations currently have prime rents between €15.50 and €16.50.
The Prague Research Forum's members are CBRE, Colliers, Cushman & Wakefield, iO Partners, Knight Frank, and Savills. RICS supports the activities of the Prague Research Forum.
