OFFICE STOCK & SUPPLY
During the second quarter of 2019 Prague’s office market saw 51,800 sq m of new premises completed, bringing the total office stock in the Czech capital to 3.57 million sq m.
The largest development completed in Prague during Q2 2019 was the second building of the ČSOB HQ in the district of Prague 5 (30,000 sq m), which was built for owneroccupation. The remaining four projects were Praga Studios in Prague 8, Mayhouse in Prague 4, and refurbishments of Palác ARA and Na Poříčí 5, both situated in Prague 1.
Total supply in H1 2019 reached 80,000 sq m, showing a drop of 11% drop y-o-y.
New office premises covering a total of 254,300 sq m were under construction across the city. This included two buildings being developed for owner-occupation – J&T HQ in Prague 8 and the Prague 12 town hall located in Prague 4. In addition to these new developments, there were additional 65,400 sq m of offices undergoing refurbishment.
At the end of Q2 2019 Crestyl was the “busiest” developer in Prague, being behind 58,100 sq m of new office developments spread over three buildings. All are located in Prague 8, a district with the highest volume of new space under construction.
The city-wide vacancy rate edged up to reach 4.6% by the end of June, representing around 162,500 sq m of unoccupied office space.
Just as during the six previous quarters, the majority of these vacant offices are still found in Prague’s biggest office districts, Prague 4 and Prague 5.
Since the end of 2017 vacancy rate in Prague has not exceeded 7%. Over the past 12 months it declined by 230 basis points from 6.9% recorded in mid-2018, while during 2019 it did not even exceed 5%.
The increased amount of speculative space scheduled to come onto the market over the next six months could result in further marginal increases in the capital’s vacancy rate. This will become more apparent if new demand continues the downward trend observed in Q2 2019.