Overall in 2019, total gross take-up on the Prague office market reached 439,000 sqm, representing a decrease of 18% in year-on-year comparison. The Prague Research Forum announced the office market figures for Q4 2019.
Office stock and new supply
A volume of 90,100 sqm of modern office space was delivered to the Prague market in the fourth quarter of 2019, bringing the total modern office stock to 3.67 million sqm. Completions include 6 properties: five were new buildings – Harfa Office Center in Prague 9 with 27,100 sqm, Telehouse in Prague 6 with 20,900 sqm, SmíchOFF with 9,600 sqm and Green Point with 7,500 sqm, both located in Prague 5 and Centrum Stromovka in Prague 7 with 5,700 sqm. The last completed property was the refurbishment of Centrum Vinice in Prague 10 with 19,300 sqm. Overall in 2019, a total of 203,000 sqm of office space was delivered to the market.
The construction of one office building commenced during Q4 2019, it includes the refurbishment of Na Příkopě 33 in Prague 1 with 7,500 sqm. The current pipeline under construction amounts to 246,700 sqm, with 174,600 sqm due in 2020 and the remaining 72,000 sqm in 2021.
A-class office stock has a ca. 74% share on the total office supply, whereas the top-quality AAA-class properties accounted for almost 22%.
Office take-up
Gross take-up (including renegotiations and subleases) in the fourth quarter of 2019 amounted to 147,400 sqm, representing
an 83% increase on the previous quarter and a 17% decrease year on year. Overall in 2019, the total gross take-up reached 439,000 sqm, representing a decrease of 18% in year-on-year comparison.
The highest demand in Q4 2019 was recorded in the city districts of Prague 4 (33%), Prague 8 (20%) and Prague 5 (13%). The most active companies were from the professional services sector (26%), followed by the consumer goods sector (14%) and the IT sector (13%).
The share of renegotiated leases in the fourth quarter of 2019 reached 41%. Net demand (new leases, expansions and pre-leases) accounted for 58% of the total gross take-up.
Major office leasing transactions
The major transactions of the fourth quarter of 2019 were the renegotiation of PricewaterhouseCoopers (13,400 sqm) in City Green Court in Prague 4, followed by the pre-completion lease of Fortuna in Churchill II (8,400 sqm) in Prague 2, the renegotiation of Nestlé in Nestlé HQ (7,100 sqm) in Prague 4 and the pre-completion lease of Adastra in Mississippi House (7,000 sqm) in Prague 8.
Office vacancy
The share of vacant office space in Q4 2019 reached 5.5%, representing an increase of 40 basis points in comparison with the previous quarter. The vacant space totalled 201,100 sqm. The largest availability was in Prague 5 with 49,600 sqm, representing a vacancy rate of 7.7% and followed by Prague 4 with 46,100 sqm and a vacancy rate of 4.8%. The lowest amount of vacant space was recorded in Prague 2 with 2,700 sqm (a vacancy rate of 2.0%) and in Prague 9 with 4,100 sqm (2.6%).
Rents
With the low vacancy rate and rising construction costs, the upward pressure on rents continues. Prime headline rents in the city centre stood between €22.50 and €23.00/sqm/month in the city centre at the end of Q4 2019. Inner-city prime rents ranged from €15.50 to €17.00/sqm/month and from €13.50 to €15.00/sqm/month in the outer city.
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.
