Czech Commercial Real Estate: A Stable Outlook for Businesses in 2026

The Czech commercial real estate market is set for a period of stable development in 2026, following a record-breaking year for investments in 2025. CBRE, a global leader in commercial real estate services, highlights a dynamic outlook with strategic opportunities across various sectors. This stability is largely driven by strong domestic investor activity and a diverse market landscape.

Record Investments Pave the Way for a Robust Market

The year 2025 saw the Czech commercial real estate market reach an historic milestone, with investment volumes approaching €4 billion. This exceptional performance, spearheaded by domestic investors (accounting for 80% of total investments in the first three quarters), is expected to continue into 2026, with investment volumes anticipated to remain strong, exceeding €3 billion. While pressure on yields (returns) is expected to decrease in the office segment due to high demand for premium assets, other sectors like retail, hotels, and industrial properties are likely to see stable yields. A growing disparity between prime and secondary assets, particularly in industrial and logistics, is also projected.

Prague Office Market: Navigating Limited Supply and Rising Rents

For businesses seeking office space in Prague, 2025 is set to record the lowest annual new supply historically, with less than 27,000 m² of administrative space completed. This trend of limited new offerings will continue into 2026, with only about 30,700 m² currently under construction and scheduled for completion. Consequently, the vacancy rate in Prague is expected to remain low and stable, around 6.5% for both years.

Rents are on the rise across all submarkets, and the gap between premium and secondary properties is widening. Tenants are adapting by favoring renegotiations, and the earlier trend of returning unused space has subsided. The market signals a renewed confidence in physical workplaces, especially well-located, quality office spaces. While new large international tenants are not anticipated, demand will be sustained by existing companies. As construction activity gradually increases, pre-leases are expected to become more common, reflecting strong interest in the limited future supply of prime office real estate.

Industrial & Logistics Sector: Robust Demand, Regional Nuances, and E-commerce Boost

The Czech industrial and logistics market is set to exceed 13 million m² of completed space by the end of 2025. New construction, however, is projected to stabilize at a lower volume in 2026, around 650,000 m², compared to 1.2 million m² in 2025 (excluding the large H&M logistics center). Despite this, the vacancy rate remains healthy at around 4.5%, indicating strong ongoing demand. Businesses should note the significant regional differences in vacancy, with Plzeň reaching 9% while Prague and its wider surroundings hold a tight 2.2%.

An interesting aspect for businesses is the "grey vacancy" – shell & core spaces not yet listed as existing supply – which offers potential hidden capacity and flexibility. The market saw robust demand in Q3 2025, driven by e-commerce, and newly leased industrial and logistics space is expected to reach approximately 1 million m² in 2025, stabilizing around 850,000 m² in 2026. Tenants are in a slightly stronger negotiating position, particularly in areas with above-average vacancy, with developers more open to discussing terms and incentives. Rents are currently at €7.40 per m² per month in prime locations and are expected to continue growing, although regional variations in growth persist.

Retail Sector: Retail Parks Drive Expansion

While 2026 will not see new shopping centers open, the retail sector's development will be dominated by retail park construction, with over 170,000 m² expected to be completed. Macroeconomic indicators suggest continued gradual growth in retail sales, around 3%, one of the highest rates in Europe. This stability, combined with robust retail park construction, provides a solid foundation for the market's resilience. International brands continue to view the Czech Republic as a key CEE destination, with many planning network expansions, particularly in regional shopping centers and retail parks.

Key Takeaways for Businesses Looking to Lease Commercial Space

  • Office Space: Be prepared for limited new supply and rising rents in Prague. Consider early pre-leases for future premium spaces or explore renegotiations for existing leases.
  • Industrial & Logistics Space: Demand remains strong, but regional differences in vacancy and rent growth offer opportunities for negotiation, especially in areas with higher availability. E-commerce continues to drive the need for quality logistics facilities.
  • Overall Market: The Czech commercial real estate market demonstrates strong fundamentals and stability, making it an attractive environment for long-term business planning, despite specific sector challenges.

Source: crestcom.cz