The Prague Research Forum is pleased to announce the office market figures for Q3 2008. The members of the Prague Research Forum – CB Richard Ellis, Colliers International, Cushman & Wakefield, DTZ and Jones Lang LaSalle – share non-sensitive information with the aim of providing clients with consistent, accurate and transparent data about the Prague office market.
Office Supply/Stock
By the end of the third quarter of 2008, the total office stock in Prague exceeded 2.4 million square meters. It comprises of more than 69% newly built and almost 31% refurbished stock, whereas A class constitutes 71% and B class 29% of the total.
During the third quarter more than 116,000 sq m were completed, amounting to 231,300 sq m of new supply since the beginning of the year. There was no increase in the city centre; most of the supply has been realized in the Inner City (mostly in Prague 4 followed by Prague 6 and Prague 8). The third quarter witnessed the completions of Kavci Hory in Prague 4 (36,840 sq m), the headquarters of Ceska pojistovna in Pankrac II. in Prague 4 (20,000 sq m), Corso Karlin II.A in Prague 8 (12,269 sq m), Argo Alpha in Prague 6 (11,212 sq m), The Park Building 12 in Prague 4 (11,132 sq m) and Prosek Point Building A in Prague 9 (8,476 sq m).
Office Take-up
Office take-up reached more than 72,000 sq m in the third quarter, which is a 10% increase compared to the previous quarter. The highest take-up in Q3 2008 was recorded in Prague 4, where approximately 40% of total volume was transacted. The second highest take-up was in Prague 9 followed by Prague 5. The manufacturing and banking sectors dominated the take-up in the third quarter, followed by professional services. Total for take-up for the first three quarters of 2008 has reached approximately 205,000 sq m. This figure already exceeds take-up for the full year 2007 when take-up was 195,000 sq m. The increase can be largely attributed to limited available supply in 2007.
Significant Office Transactions
The largest transactions in Q3 were the lease of Ceska sporitelna in Trianon Office Building (12, 684 sq m) in Prague 4, CKD DIZ occupied 8,000 sq m in Kolben Cube project in Prague 9. Hill’s Pet Nutrition Manufacturing has taken up 3,611 sq m in Gemini B Building in Prague 4, Komercni banka occupied 2,475 sq m in Vysocanka Brana project in Prague 9 and Toyo Healthcare Group leased 2,400 sq m in Prosek Point A also in Prague 9.
Office Vacancy
The vacancy rate increased in the third quarter by 3 p.p. and reached 8.58% as compared to 5.6% in the previous quarter. The lowest vacancy levels were recorded conventionally in Prague 10 and Prague 3, with 2.12 and 3.27% respectively. Conversely, the highest vacancy was recorded in Prague 6 with 22.09% of its stock unoccupied, followed by Prague 7 with 16.87% vacancy. Compared to the previous quarter, the vacancy rate in Prague 6 has almost doubled mostly due to record completion and no significant transactions and also thanks to the limited total stock size in this city part.
Rent
Prime achieved rental levels have increased slightly in Q3 2008. Prime rents in the city centre have reached 21 – 23 EUR/ sq m/ month. Rental levels in the inner city remained stable between 15 and 17.50 EUR, whereas the outer city rents are approximately 13 – 15 EUR/ sq m/ month.
Released by the Prague Research Forum Q3 2008
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