In Brno, 51,500 meters of office space will be completed this year in five buildings

Areal Slatina, Brno

Brno - In Brno, developers plan to complete five new office buildings this year, which will offer 51,550 m². This is the highest annual increase in office space since 2007. For the first time in the last 20 years, Brno will additionally see more offices than Prague, where over 30,000 m² is expected, according to a press release from the consulting company. After the completion of the new buildings, 535,000 m² of office space will be available in Brno.

Until recently, there was not much interest in new offices in Brno, and at the end of 2014, their vacancy rate approached 20%. By mid-last year, it was only 16.5%, and further declines are expected. "Modern offices in the wider center are effectively occupied now. New companies, mainly from the information technology sector, are coming to Brno, and existing companies are expanding. Offices in less prestigious locations outside the city center are now the only ones left vacant," said Lukáš Netolický to ČTK, who focuses on the Brno market at the consulting company.

The highest achievable rent had also stagnated at 12.5 euros (about 338 CZK) per square meter, which is data from the first half of last year. "We expect rent prices to rise due to increasing demand," Netolický said. According to his findings, most offices in new projects are already leased.

This year, the multifunctional Dorn building next to Vaňkovka should be completed, another building in the Business Park Ponávka for IBM will be created on Škrobárenská street, and the renovation of the office complex in Smetanova will be finished. Each of these projects will offer around 8,000 m². The building in Areal Slatina will offer over 15,000 m², and Campus Science Park C in the Bohunice campus will have almost 13,000 m².

Increased company interest and higher occupancy in buildings are related to the economic recovery and the fact that a large portion of buildings in Brno was completed between 2012 and 2014, when the larger recovery was just starting. "These were not economically strong years, and developers had to motivate companies to rent offices with them. Only when companies began to feel that the market was growing did they move into new spaces and start hiring," Netolický said.

There is particularly strong interest in the city center. Offices that are far from it must work harder to attract tenants. Offices that are poorly accessible by transport and lack services are problematic. "Companies are again discovering the advantages of being located in the center. It is prestigious and also a benefit for employees because they have access to public transport and services. IT companies, in particular, are competing for employees, and it is more advantageous for them to offer jobs in the center than to increase salaries," explained Netolický.

In the coming years, he believes it will be very difficult to satisfy companies that would like to rent offices of 1,000 m² or more in the wider center of Brno, as there will be no space for them. "No other project is currently under construction," Netolický noted.

Only buildings with an offer larger than 1,000 m² are counted in the office space statistics, and government buildings are not included.