Prague Research Forum Announces the Office Market Figures for Q1 2017

Introduction
The Prague Research Forum is pleased to announce the office market figures for Q1 2017. The members of the Prague Research Forum – CBRE, Colliers International, Cushman & Wakefield, JLL, Knight Frank – share non-sensitive information with the aim of providing clients with consistent, accurate and transparent data about the Prague office market.

The RICS supports activities of the Prague Research Forum.

Office Supply/Stock

Total modern office stock in Prague in Q1 2017 reached 3,219,900 sq m. The ratio of A-class modern stock to B-class modern stock was approximately 71%. Top quality AAA class properties accounted for 17% of the total office stock.

In Q1 2017, only one new office project was delivered to the Prague market. DOCK IN TWO, with an office space of 6,900 sq m, is located in the inner city area of Prague 8.

Currently, there is approximately 343,000 sq m of office space under construction in Prague. In Q1 2017, one project commenced construction. It was reconstruction of Telehouse (approx. 20,000 sq m) in Prague 6.

Office Take-up
Gross take-up (including renegotiations and subleases) in the first quarter of 2017 amounted to 90,100 sq m, representing a decrease of 8.5% compared to the previous quarter and a year-on-year decrease of 3.0%.

The highest volume of gross take-up was recorded in Prague 4 (35%), Prague 5 (16%) and Prague 8 (15%).

IT companies accounted for the largest share of gross take-up (17%) followed by Professional services sector (16%) and Consumer goods (10%).

Renegotiations represented only 18% of the total gross take-up which was 12 percentage points below the Q4 2016 figure. The share of new leases of the total gross take-up reached 58% in Q1 2017.

Significant Office Leasing Transactions
The most significant, non-confidential, transactions of Q1 2017 were – new occupation of PGRLF (2,600 sq m) in Oasis Florenc in Prague 8, the renegotiation of Carrier Refrigeration Operation Czech Republic (1,800 sq m) in Hadovka Office Park in Prague 6 and the renegotiation of Rossmann (1,600 sq m) in Gemini in Prague 4.

Office Vacancy
In Q1 2017, the vacancy rate decreased by 1.1 percentage points, compared to the previous quarter, to 9.4%. Total vacant space declined to 303,900 sq m. The highest vacancy rates were recorded in Prague 7 (14.8%), Prague 10 (13.7%) and Prague 1 (11.8%). Conversely, the lowest vacancy rates were recorded in Prague 9 (6.7%), Prague 8 (7.6%) and Prague 2 (7.8%).

Rents 
In Q1 2017 prime headline rents in the city centre increased to 20.00 €/ sq m/ month, while prime rents in the inner city remained stable between 14.50 - 15.50 €/ sq m/ month and prime rents in the outer city between 13.00 - 14.50 €/ sq m/ month.