The cumulative gross take-up figures for Prague's office market for 2011 reached a record 325,564 m², which is almost 52% more than in 2010, according to the latest research from Jones Lang LaSalle.
Eduard Forejt, Head of Office Agency at Jones Lang LaSalle, commented: "The 2011 figures represent the highest gross take-up in the modern history of Prague office market and have exceeded the previous best result from 2006 by more than 40,000 m²," and he continues, "it is also by almost 100,000 m² higher than 10 years average take-up on the market."
In 2011, a total of 100,291 m² of modern office space was completed in Prague within 12 new office buildings. The majority of this office space was delivered to Prague 8 (41.7% of the total 2011 supply), Prague 4 (23.4%) and Prague 9 (22.2%).
In comparison to 2010 the new supply increased by 137%; almost half of the space was pre-leased to future tenants. In 2012 approximately 112,000 m² are expected to be delivered on the market in Prague, out of which 50% is pre-leased.
The Q4 2011 vacancy rate has experienced a slight increase compared to Q3 2011 and currently stands at 12.01%. The largest and most active office districts Prague 4 and Prague 5 recorded the lowest level of vacancy rate in Q4 2011 with 7.8% and 6.8% respectively.
On the contrary in Prague 8, which is becoming one of the major Prague office submarkets, slight increase in vacancy was seen and due to planned new completions the vacancy rate is expected to reach ca. 17% in 2012.
Ondrej Vlk, Senior Research Analyst, comments on the vacancy rate in respect of A-class and B-class buildings: "The average vacancy rates of A-class and new built projects continued to steadily decline (by 208 bps and 227 bps respectively) despite new speculative developments.
"On the contrary the vacancy rates of B-class and refurbished projects have increased by 90 bps and 173 bps respectively. This confirms a trend of prevailing interest of tenants in new modern office schemes."
In Q4, net absorption was again positive at 17,341 m². Eduard Forejt, comments: "The positive net absorption has been recorded on the Prague market for the last six consequent quarters and we believe this trend to continue throughout 2012 as more than half of new supply volume is already pre-let to tenants."
During the whole year 2011, the net absorption reached more than 121,000 m² compared to negative absorption in 2010.
The highest rents achieved in prime office buildings in the city center remain in the range of 20 - 21/m²/month.
Source: Jones Lang LaSalle