The second half of 2022 has brought 33,000 sqm of office space to the Brno office stock up to the final of 664,400 sqm. There were five new office buildings that were completed and six more are under construction now. At this moment, Ostrava has only one project under construction with the completion scheduled for 2023, says the Regional Research Forum in its latest report on H2 2022.
Brno key findings
- In total 33,000 sqm of office space was delivered to the market in Brno in H2 2022
- Demand drivers were manufacturing and IT companies
- The vacancy rate in the Brno office market increased to 13.4%
- Prime rents remained stable and ranged between €16.00-16.50/sqm/month
Brno office supply/stock
The total modern office stock in Brno reached 664,400 sqm in the second half of 2022. A-class properties represented 74% of the total modern stock and B-class properties represented the remaining 26%.
In H2 2022, five new office buildings were completed:
- Brno Business Park E (13,200 sqm)
- Palác Trnitá (7,800 sqm)
- Čechyňská Factory Park (5,000 sqm)
- Titanium T (3,600 sqm)
- Titanium E (3,300 sqm)
Currently, there is 69,600 sqm of modern office space under construction in six office projects. The largest are:
- Centrum Šumavská II (13,000 sqm)
- Nová Zbrojovka D4 (12,000 sqm)
- Šumavská Tower A (11,600 sqm)
- Vlněna office park I (8,600 sqm)
Approximately 34,700 sqm of the space under construction is scheduled for delivery in 2023.
Brno office take-up
In H2 2022, gross take-up (including renegotiations) reached 34,800 sqm, which represents a slight increase of 11.9% in comparison to the previous half-year and a 10% decrease year-on-year. Almost three-quarters of the total demand in Brno was realized by manufacturing and IT companies.
The largest transaction of the second half of 2022 was the renegotiation and expansion of the manufacturing company Atlas Copco in Spielberk Tower B (10,600 sqm), followed by the new lease of an undisclosed company in Zet.office (2,600 sqm). The third largest transaction was a new lease of Continental in Brno Business Park E (1,400 sqm).
Vacancy
A total of 88,800 sqm of modern office space was vacant at the end of H2 2022. The vacancy rate increased to 13.4%, representing an increase of 3.3 percentage points compared to H1 2022.
Rents
In H2 2022, prime headline rents in the Brno office market remained stable at €16.00-16.50/sqm/month.
“We are still registering strong demand in the office market in Brno, despite the fact that the vacancy rate currently exceeds 13%. The high vacancy rate at the end of 2022 was mainly caused by the newly completed office projects. Traditionally, Brno is home to technology and software development companies. The interest in this sector was confirmed throughout last year. In addition to large international companies that have already established themselves on the Brno office market, we are also seeing interest from smaller IT companies that started in flexible office concepts and are now expanding into standard office space. We register the highest demand for space in the range of 500-1,000 sqm,” adds Marta Kadlecová, consultant in the Office Leasing department at JLL Czech Republic.
Ostrava key findings
- One office project is under construction, with its completion scheduled for 2023
- The vacancy rate in the Ostrava office market increased to 9.3%
- Prime rents increased, reflecting the general pressure on prices in new developments
Ostrava office supply/stock
The modern office stock in Ostrava stood at 217,000 sqm in the second half of 2022. Approximately 21% of the stock volume is located in buildings built or refurbished in the last 10 years.
During H2 2022, there were no completed projects reported in the Ostrava office market. One office building is under construction, namely Organica (20,600 sqm), with its completion scheduled for 2023.
Ostrava office take-up
Gross take-up (including renegotiations and subleases) reached a total of 4,600 sqm in H2 2022, which was more than double compared to the same period last year. New leases accounted for 98% of total demand.
Vacancy
A total of 20,200 sqm of modern office space was vacant at the end of H2 2022. The vacancy rate increased to 9.3%, representing an increase of 97 basis points compared to H1 2022.
Rents
In H2 2022, prime headline rents in the Ostrava office market increased to €14.00-14.50/sqm/month.
The members of the Regional Research Forum (CBRE, Colliers, Cushman & Wakefield, JLL and Knight Frank) aim to provide clients with consistent, accurate and transparent data about the regional office markets in the Czech Republic. The members share non-sensitive information and believe that the Regional Research Forum will contribute to the improvement of transparency in the regional Czech office markets.
