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Nov 28, 2014
If companies are considering a change in their office spaces, this is the right time

Katarina Wojtusiak

CBRE: Ideal Conditions on the Office Space Market

OFFICE SPACES IN PRAGUE: IMPROVING STANDARDS AND FAVOURABLE PRICES

  • Prague offers the second cheapest leases compared to other large cities in the CEE region.
  • Current high vacancy rates (14%) are primarily due to new development.
  • Current availability of office space in Prague amounts to 2.9 million sq m
  • An additional 148,100 sq. m. of office space is expected in 2014, with 182,400 sq m being added in 2015.
  • 75% of office buildings on the Czech market are newly built and 25% of office spaces are renovated.

The standard of office buildings is improving, with a growth in the demand for quality office space in city centres in particular, and landlords are currently offering very good leasing conditions. Prague offers the second cheapest leases in the CEE region, with 330,500 sq m of new office space becoming available during the next two years due to new development projects. According to CBRE this period is very favourable for companies considering moving to new office space.

The Prague office space market is also highly competitive due to the volume of speculative development expected to be completed in the course of 2014 and 2015. The current vacancy rate amounts to 14% (Q3 2014) and represents approximately 416,100 sq m of available space. By the end of 2015, the vacancy rate is expected to reach the level of 16% and on-going downward pressure on the highest rents is assumed as well. The currently available office space in Prague is relatively high – 2.9 million sq m,” says Katarina Wojtusiak, Head of Office Agency společnosti CBRE. Compared to the other large cities in the CEE region, Prague offers relatively low prices of leases, second only to Slovakia. Currently, the most expensive leases of office space are found in Warsaw and Vienna. As far as the remaining parameters (vacancy rate, new development) are concerned, Prague is comparable to other large cities in the CEE region.

The right time to change office space

“If companies are considering a change in their office spaces, this is the right time,” says Katarina Wojtusiak. Prague has seen the on-going development of interesting projects, such as Enterprise Office Center, Green Line and Delta in Prague 4, Aviatica and Metronom in Prague 5 and Corso Court in Prague 8. Some of the projects are unique due to their architectural concept, e.g. River City – the Danube House building or Amazon Court. The Park and City West are examples of conceptually interesting and commercially successful projects.

A real-estate agent is the guarantee of the best leasing conditions

Optimal leasing conditions are usually achieved if the company is represented by a real-estate agent, whose detailed knowledge of the market allows them to negotiate much more favourable conditions with owners and developers. Another advantage is the fact that a real-estate agent is able to structure the entire search process, thus making it more effective and saving the client’s time and money.

State-of-the-art spaces are most sought after

On the Czech market, a higher standard - in particular class A office buildings - are very popular. Such buildings currently form approximately 69% of the total quantity of buildings available. They are usually buildings equipped with suspended ceilings, raised floors, heating and cooling systems, magnetic card entry systems and a sufficient number of parking places, with the best ones having green certification as well.