OFFICE STOCK & SUPPLY
Thanks to the completion of two office buildings during Q4 2018 the total office stock in Prague grew by 28,500 sq m and reached 3,475,500 sq m at the end of the year.
The two new additions included BB Centrum A building (20,900 sq m), which has been fully refurbished by Passerinvest and will be occupied by Moneta Money Bank, and completion of City Element (7,600 sq m) by S+B Gruppe, who acquired the building from ECM in 2014 and sold it to Allianz at completion before the end of 2018. Both buildings are located in Prague 4, which remains to be the largest office district in the city with a 27% share of the Prague office stock.
Q4 2018 was the year’s weakest quarter in terms of new deliveries, however, the total annual supply volume for 2018 came to 156,900 sq m, being the strongest since 2015. In the course of 2018, Prague office market saw the completion of 10 new office buildings and 5 refurbishments.
This strong development activity is expected to continue. At the end of 2018, the construction pipeline included 26 buildings, 286,000 sq m of new developments and 50,000 sq m of refurbishments, all to be completed by 2021.
Same as in Q3, vacancy rate in Prague continued decreasing also in the final quarter of 2018 and ended up hitting a new alltime low at 5.1%, which represents 178,800 sq m of unoccupied office space. In line with the previous two quarters, Prague 5 again presented the highest share of unoccupied office space.
However, corresponding with the decline of Prague vacancy rate in the second half of the year, the vacancy rate in Prague 5 reported a drop from 11.3% in the middle of the year to 7.4% at year end. In terms of areas, Prague 5 offered 44,500 sq m of immediately available office space. The largest volumes of vacant offices in this part of the city continue to be found at Aspira Business Centre and the recently completed Dynamica.
The second highest vacancy rate at the end of 2018 was recorded in Prague 3 (5.7%). This is however one of the smallest office hubs in the city with the total stock of just 127,500 sq m. As such, the total volume of ready to move-in offices amounted to just over 7,200 sq m.