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Prague office market Q2 2018 - overview

18.10.2018

Professionals Real Estate and Consulting agency informs about Prague office market Q2 2018.

The majority of new supply was developed in Prague 4 and in Prague 5 in the second quarter. In total over 42,000 m2 were completed in the capital city of Prague. Office supply in Q2 increased slightly when compared to the first quarter, reflecting a large amount of office space underway being lately on the Prague market. Waltrovka - Dynamica with 13,000 m2 located in Prague 5 was one the largest completed project in 2018 Q2. The largest newly completed office building In the Prague 4 district was Trimaran comprising 10,300 m2 of office area. Prague office market is expected to see lower new office supply in the second half of the year.

In total, there was approximately 296,700 m2 of new office supply under way in the Prague property market. It is forecasted that by the end of 2018, there will be further completions in Prague of ca. 66,000 m2. The estimate of completions for next year 2019 suggested around 170,300 m2. Districts P8 and P4 comprised nearly 1/2 of the Prague pipeline in 2018 Q2. The largest office project slated for completion in the 2018 H2 was Palmovka Open Park with 24,500 m2 in P8. In 2018 Q2 construction work on two new projects located in P4 and P9 was started.

Prague office prime rents have been largely stable in the capital, apart from Prague Central Business District (CBD) showing an increase in prime rent from 20.00– 21.00 € /m2/ month to 20.50 – 22.00 € /m2/ month. Prime rents stayed unchanged in areas such as the Inner city and Outer city where prime rents were between 14.50– 16.50 € /m2/ month and 13.00 – 15.00 €/m2/ month respectively.  In the second quarter the office vacancy rate increased to 6.7 % from 6.4 % a quarter ago. In the q-o-q comparison the office vacancy rate increased by 30 basis points and decreased by 200 basis points y-o-y.