The Prague Metro's Unrivaled Influence on Office Rents

The office real estate market in Prague is increasingly defined by location and building quality, with metro proximity emerging as the dominant driver of value. According to Colliers' latest analysis, strategically located metro stations have transformed once-unremarkable areas into bustling business centres, highly sought after for their excellent transport connectivity and developed services. This trend means that a prime office space near a central metro station can command significantly higher rents compared to those located further out.

Prime Locations and Peak Rents

The highest rents in Prague's city centre, specifically in top-tier projects close to the Muzeum, Národní třída, and Náměstí Republiky metro stations, now reach approximately €30 per sqm/month. This marks a notable increase from 2023, when peak prices at Muzeum and Náměstí Republiky were around €27, indicating both price appreciation and an expansion of premium office zones. These areas, acting as focal points for the city's development, offer unparalleled access and amenities, justifying their premium pricing.

The Spectrum of Value: Outlying vs. Central

At the other end of the spectrum, office spaces near outlying metro stations typically see prime rents maxing out at €16.5 per sqm. The most budget-friendly locations remain Zličín and Opatov at €13/sqm/month, followed by Strašnická at €14.4. Generally, rental prices progressively increase as offices get closer to the city centre, reflecting the demand for central accessibility. However, there are exceptions, particularly with more recent developments in areas like Roztyly or near Želivského metro station, which can command higher rents due to their modern amenities and design.

Quality and Modernity: A Growing Divide

Beyond just location, the quality of office buildings plays an increasingly significant role in pricing. Following a rise in rents for newly constructed office buildings, there's a growing disparity in base rents between projects older than 10 years and the most modern developments. This trend offers businesses a crucial choice: balance their financial demands with their preferred level of quality and amenities, as newer, state-of-the-art facilities come with a higher price tag but often better features and efficiency.

Understanding Vacancy Trends in Prague's Office Market

The current vacancy rate for office space in Prague is experiencing a slight decline, standing at 6.6% at the end of the second quarter. This decline is more pronounced in areas closer to the city centre, with city centre vacancy rates dropping by 1.4 percentage points and the wider centre by 1.8 percentage points year-on-year. Conversely, areas around more distant metro stations on the city outskirts saw a slight increase in vacancy rates (+0.2 percentage points). This indicates a strong preference and sustained demand for well-connected, centrally located office spaces, underscoring the metro's critical role in the market dynamics.

Source: property-forum.eu