Companies are returning to the center of Prague, new offices are being built

Florentinum

Prague - Companies are returning to the center of Prague. They are being aided by the activities of developers who are currently building over 70,000 square meters of new office space in the narrow center of the city. An additional planned 95,000 square meters is at various stages of preparation before construction begins. This follows from an analysis published today.
In recent years, however, office construction in the center of Prague has been minimal, with an average of ten thousand square meters of new offices being built each year. In total, there are thus 200,000 square meters of category A offices in this part of the capital.
"The completion of such a large amount of office space within a few years will put pressure on lowering rents. They are already the lowest in the last twenty years," estimates Michal Soták, head of market research at Cushman & Wakefield.

Diamant

At the end of the first quarter of this year, there was a total of 2.8 million square meters of office space of all categories in Prague. The vacancy rate slightly increased to 13 percent, leaving about 380,000 square meters of office space without tenants. The base rent in Prague 1 reaches 20 to 21 euros (519 to 545 crowns) per square meter per month. In the inner part of the city, a square meter is rented for 15 to 17.50 euros (389.40 to 454.30 CZK) per month, and in the outer part for 13 to 14.50 euros (337.50 to 376.50 CZK).
The upcoming office boom in the center of Prague is compared by consulting firms to the recent development of Smíchov. There, the office boom began in 2004, and nearly 80,000 square meters of new space were constructed in three years.
The Prague center is supported not only by its prestigious address and good transport accessibility but also by new requirements from companies regarding the function of offices. "The massive construction of offices in locations outside the center attracted companies over the past decade with low rents. However, after years of operation, it has become clear that a lower rent alone cannot compensate for the advantages of the center. A company that wants to retain the best employees must offer them opportunities for social life. For example, meeting people is absolutely essential for the work of salespeople," stated Radka Novak, head of the office team at Cushman & Wakefield.

Planned office projects in Prague 1:

Project	Location	Developer	Office Area in m²	Completion
Quadrio	Národní	CPI	16,400	Q4 2014
Florentinum	Masarykovo nádraží	Penta	43,006	Q4 2013
Diamant	Václavské náměstí	Mustela	3,396	completed
Václavské nám. 9	Václavské náměstí	IVG	2,247	now
Jindřišská 16	Jindřišská	Immofinanz	6,014	Q1 2014
Jungmannova 15	Jungmannova	Immofinanz	6,525	Q3 2014
Květinový dům	Václavské náměstí	Flow East	14,123	2015+
Savarin	Václavské nám. - Jindřišská - Na Příkopě	Ballymore	20,000	2018
Masarykovo nádraží	Masarykovo nádraží	Penta	not specified	2016+