International real estate advisory company JLL follows up on the report by the Prague Research Forum (PRF) on the current situation on the Prague office market.
“During the first half of the year, the Prague office market saw the completion of three new administrative projects – Dock in Two, Five and Rustonka R1. The total space delivered to the market amounted to 31,600 m² which is a result comparable to the whole of 2016, when only 36,200 m² was completed and delivered to the market. There is still a further 123,400 m² due to be delivered to the market this year. In total, there is almost 328,000 m² of office space under construction and due to be completed between 2017 and 2019,” says Valerie Tomanová, JLL Research Analyst.
“Despite the promising supply, it is sometimes difficult to find a space that matches a client’s requirement,” describes Petr Kareš¸ Head of Tenant Representation, JLL and adds: “the supply is often fragmented and it is hard to find larger spaces (over 2,000 m²) in specific locations. This is why we recommend that our clients start their search for new premises in advance, at least 1.5 years before their current lease ends. This significantly increases the chances of satisfying their requirements. Furthermore, clients also need to prepare themselves for a quicker decision-making process. If they kept the pace set over the last 3-5 years, they would quite likely lose the premises to another interested party.”
As evidenced by the biggest lease transaction concluded in Q2 2017: Moneta Money Bank (21,500 m², negotiated by JLL) eventually decided to stay in the BB Centrum and relocate to a building which will undergo a complete renovation in order to offer modern A+ class working environment. Apart from the location, another decisive factor was time – the renovation of the building will be quicker than construction of a new one.
“High demand for new premises and steady new supply are pushing the Prague vacancy rate down. Currently, vacancy stands at 8.6 %, being one of the lowest levels in the history of the market", concludes Valerie Tomanová, JLL Research Analyst.
