The share of vacant office space on Prague’s office market increased to 6.9% at the end of Q2 2018, which is in 0.7 percentage points higher than in the previous quarter. Prime headline rents in the city centre also slightly increase. The Prague Research Forum announced the office market figures for Q1 2018.
A volume of 51,500 sqm of modern office space was delivered to the Prague market in the second quarter of 2018, contributing to the overall office stock of 3,408,900 sqm. The largest newly completed projects were Trimaran (18,300 sqm) in Prague 4, Dynamica (13,400 sqm) in Prague 5, Rustonka R2 (11,400 sqm) in Prague 8.
In Q2 2018, two projects commenced construction, including AFI City “A“ (15,500 sqm) in Prague 9 and Parkview (14,800 sqm) in Prague 4. There is currently about 312,500 sqm of office space under construction in Prague with scheduled completion by the end of 2020.
A-class office stock has about 72% share in the total office supply, whereas the top-quality AAA-class properties accounted for 19%.
Gross take-up (including renegotiations and subleases) in the second quarter of 2018 amounted to 145,200 sqm, representing a 70% increase compared to the previous quarter and a 6% year-on-year decrease.
The highest demand was recorded in the city districts of Prague 5 (25.4%), Prague 4 (24%) and Prague 7 (14.1%). The most active companies were from the manufacturing sector (23.4%), followed by advertising and media (17.9%) and IT companies (9.3%).
The share of renegotiated leases in the second quarter of 2018 increased to 36%. Net demand (new leases, expansions and pre-leases) accounted for about 64% of the total take-up.
The major transactions of the second quarter of 2018 were the renegotiation of Siemens (23,200 sqm) in City West project in Prague 5 followed by the pre-lease of WPP (16,300 sqm) in the building Bubenská 1 in Prague 7.
The share of vacant office space increased to 6.9% at the end of Q2 2018, which is in 0.7 percentage points higher than in the previous quarter. Total vacant space amounted to 236,700 sqm. The highest vacancy rates were recorded in Prague 5 (11.3%) and Prague 3 (8.7%). Conversely, the lowest vacancy rates were recorded in Prague 10 (3.9%), Prague 6 (4.9%) and Prague 2 (5.2%).
Prime headline rents in the city centre slightly increased and stood between €21.00 and €22.00/sqm/month in the city centre in the end of Q2 2018. The inner city prime rents ranged from €15.00 to €16.50/sqm/month and the outer city from €13.50 to €15.00/sqm/month.
The members of the Prague Research Forum – CBRE, Colliers International, Cushman & Wakefield, JLL, Knight Frank – share non-sensitive information with the aim of providing clients with consistent, accurate and transparent data about the Prague office market. The RICS supports activities of the Prague Research Forum.
