Office stock and new supply
A total volume of 49,500 sqm of modern office space was delivered to the market in the second quarter of 2021. New completions include four properties, all newly built projects: Bořislavka with 25,400 sqm of office space in Prague 6, Astrid Offices with 3,500 sqm in Prague 7, and Mississippi House with 13,300 sqm and Missouri Park with 7,300 sqm in Prague 8. Prague modern office stock increased to 3.73 million sqm.
Projects under construction amount to 147,300 sqm with approximately 14,600 sqm due in the second half of 2021, the remaining 132,700 sqm is scheduled in the years 2022-2023. During Q2 2021, neither new nor refurbished project commenced construction.
Class A office stock has a ca. 73% share of the total office supply, whereas the top-quality Class AAA properties accounted for over 17%.
The total volume of space immediately available to sublease in Q2 2021 accounted for 65,000 sqm, which is a decrease of 14% compared to the previous quarter.
Gross take-up (including renegotiations and subleases) in the second quarter of 2021 amounted to 89,300 sqm, representing a 5% decrease on the previous quarter but a 10% increase in a year-on-year comparison.
The highest demand in Q2 2021 was recorded in the city districts of Prague 8 (21%), followed by Prague 1 (18%) and Prague 4 (14%). The most active companies were from the professional services sector (13%), followed by the public sector (10%) and the consumer goods sector (10%).
The share of renegotiated leases in the second quarter of 2021 reached 37%. Net demand (new leases, expansions and pre-leases) accounted for 55% of the total gross take-up and the share of subleases accounted for the remaining 8%.
Major office leasing transactions
The largest transactions of the second quarter of 2021 were the new occupation of Ministry of Industry and Trade (3,700 sqm) in Václavské náměstí 42 in Prague 1, followed by the pre-lease of undisclosed US company from Life Science sector (3,500 sqm) in Dock in Five in Prague 8, the new occupation of VŠCHT (3,200 sqm) in Jankovcova 23 in Prague 7 and the sublease of Košík (Rockaway Group) (3,000 sqm) in Blox in Prague 6.
Office vacancy and net absorption
As of Q2 2021, Prague Research Forum includes net absorption figures amongst the key office market indicators. Net Absorption represents the change in the occupied stock within a market during the survey period. In Q2 2021, net absorption was positive and reached 38,100 sqm.
However, due to strong new office supply, which exceeded net absorption, the vacancy rate increased slightly by 20 bps to the level of 7.8%. The vacant space totalled 291,400 sqm as of Q2 2021. The largest availability was in Prague 4 with 70,900 sqm, representing a vacancy rate of 7.3% and followed by Prague 5 with 57,300 sqm and a vacancy rate of 9,0%. The lowest amount of vacant space was recorded in Prague 2 with 5,900 sqm (a vacancy rate of 4.4%) and in Prague 3 with 7,400 sqm (6.1%).
Despite the rising vacancy rate prime headline rents remained stable and stood between €22.00 and €22.50/sqm/month in the city centre at the end of Q2 2021. Inner-city prime rents ranged from €15.50 to €17.00/sqm/month and from €13.50 to €15.00/sqm/month in the outer city.
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