Czech Republic

Czech office market has a new association

22 August 2017

A new association has been created to track and monitor the office market in Prague. The Czech Office Market Association (COMA) will gather data and track trends, analysing and commenting on their findings for the public. International real estate consultancy BNP Paribas Real Estate Czech Republic and Prague-based consultancy OFFICE HUNTERS are the founding members.

We want to provide comprehensive and transparent data on the office property market performance. We will publish reports on a quarterly basis

Lenka Šindelářová, Head of Research & Consultancy at BNP Paribas Real Estate APM ČR

In our platform, we would like to focus on older office properties as they are undergoing significant development along with the traditionally monitored A & B class stock

Filip Veselý, Director of HUNTERS OFFICE

The information collected, classified and analysed by both founding members is important for developers, investors and tenants alike. COMA, utilising data on hundreds of transactions, is able to identify emerging trends on the domestic property market on a quarterly basis.

COMA processed Prague’s office data for the first half of 2017. Only 33,000 sq m of new offices were completed in Prague last year. This year, developers announced the completion of projects with a total area around 170,000 sq m. In the second quarter, two buildings were completed - the Five by Skanska (13,400 sq m) and Rustonka 1 (11,200 sq m) building from J&T.

There is also a significant increase
in the refurbishment of older office buildings, in addition to new projects. This is a clear trend for the future due to the lack of prepared projects in the established office locations

Filip Veselý, Director of HUNTERS OFFICE

At the end of June, the total A and B class office space area in Prague was 3.2 million sq m, of which A-class buildings hold 70% and B-class buildings 30%. In the course of the second quarter, net absorption of vacant office space is high at around 70,000 sq m, therefore the vacancy declined to 8.2%.

The most important newly concluded transactions were the Moneta Money Bank lease in BB Centre A and the lease of Accenture in the Visionary building in Prague 7, which is in the construction phase.

Accenture lease show that the developers and thereafter tenants are moving to new locations within Prague that have not yet belonged to established office zones

Lenka Šindelářová, Head of Research & Consultancy at BNP Paribas Real Estate APM ČR

COMA recorded an increase in the prime headline rents in the city centre and also in some other location with lower vacancies, due to the high tenant’s interest in recent months. Prime headline rent stands at 19-21 EUR/sq m/month. The association expects that rents in the city centre will also have a slight increase this year. It already records rents above the above mentioned levels on some buildings.

This year, we do not expect a dramatic increase in vacancy even in older buildings. Many of these have increased their attractiveness by investing into interior and technical equipment that reflects in the rising interest of tenants. However, it depends very much on the location and flexibility of the owner to except the tenants’ individual requirements

Lenka Šindelářová, Head of Research & Consultancy at BNP Paribas Real Estate APM ČR

“Companies, while relocating or expanding, are often interested in locations such as Prague’s city centre, Smichov, Karlín or Holešovice”, says Filip Vesely. Requirements for older offices typically ranges up to 500 sq m and comes mostly from the IT sector. "We also register several larger requirements over 10,000 sq m on the market, which could be realized this year, thus contributing to the high take-up", concluded Lenka Sindelářová of BNP Paribas Real Estate.

-

Summary data for the first half of 2017

Prime headline rent in the second quarter of 2017:

Average asking rent for the A-class building for the first half of 2017:

Czech Office Market Association (COMA) was established by real estate consulting companies BNP Paribas Real Estate and Office Hunters in 2017. Their goal is collecting and analysing data from the office space market. This press release is the property of COMA Association and may not be copied, reproduced and disseminated in any form or by any means, as part or whole without the COMA as the source of information. The information contained in this publication has been obtained from sources considered to be trusted. COMA does not take responsibility for the damage or loss caused by any unintentional misstatement in this report.