OFFICE STOCK & SUPPLY
The first quarter of 2019 saw the completion of two new office buildings with a total volume of 28,100 sq m, which was almost identical to the supply level seen in the previous quarter. As a result, the total office stock in Prague increased to 3.493 million sq m, 72% of which is class-A premises.
The first new completion was Churchill Square I. (15,200 sq m) in Prague 2, which will be largely occupied by Deloitte, who are moving their Prague HQ from Nile House. The second building delivered during Q1 was Rustonka R3 (12,900 sq m) in Prague 8, where the majority of space will be occupied by Veeam Software.
Passerinvest Group launched the refurbishment of its Building B at BB Centrum (14,200 sq m), which has therefore moved to the development pipeline until the renovation work is complete.
The construction pipeline in Q1 2019 comprised new developments totalling 275,400 sq m and refurbishments of 63,500 sq m across the city. The largest share of the new developments is being delivered to the markets of Prague 8 (64,900 sq m) and Prague 5 (61,200 sq m). 62% of the development pipeline was still available for lease.
Demand continues to outpace supply of office space in the Czech capital. As a result, the volume of unoccupied office space in Prague shrank again during the course of Q1 2019 to 152,600 sq m. This translated into a decline of the vacancy rate by a further 70 basis points (bps), hitting a new record low of 4.4%.
Prague 5 still offered the highest volume of office space ready for immediate occupation (39,300 sq m), with Prague 4 on its tail with vacant stock amounting to 36,000 sq m.
More than 60% of the unoccupied space is found within class-A buildings.