The floor area of newly completed office buildings in the Czech Republic fell by 20 percent last year. This year, we can expect a renewed increase, but this will be driven only by previously completed projects, with virtually no new office buildings being built this year, according to an analysis by facility management company ISS Czech Republic.
In the Czech Republic, 97 office buildings were completed last year, 10 more than a year earlier, according to the latest data from the Czech Statistical Office. However, the floor area of these completed buildings decreased significantly, reaching 249,000 sqm. This is down 20 percent year-on-year and the lowest figure since 2017. "The office building market is still struggling with the effects of covid. Working from home has become significantly more prevalent in office occupations, and even now a large proportion of employees are using a hybrid model. Therefore, companies do not need as much office space, there is a reduction in the area used and this model will become the new standard," comments Michael Almasy, General Manager of ISS, on the statistics.
Last year, therefore, it was more the smaller projects that were being completed, and the decrease in the investment costs for the construction of completed projects corresponds to this. Last year, this amounted to just under CZK 6 billion (€251 million), while the year before it was 8.4 billion (€351.33 million). "This year will most likely see a relatively strong increase in newly completed office space, especially in Prague, where a number of office buildings are under construction. However, the market will be driven mainly by completed projects from previous years, with new office space started this year virtually non-existent," added Michael Almasy.
"The trends of the past years will not change, companies are moving to smaller spaces, the combination of working from home and from the office will remain widespread, and employees will use shared workspaces. Companies will not need as much space as in the past, which will significantly affect the demand for new offices. Rather, existing space will be renovated so that companies can use offices in line with the ongoing digitalization and the meteoric rise of artificial intelligence," concluded Michael Almasy.
