The Regional Research Forum has presented H1 2024 Brno and Ostrava office market data. The vacancy rate in both cities is moving slightly below 12%.
The total modern office stock in Brno reached 689,600 sqm in the first half of 2024. A-class properties accounted for 73% of the total modern stock, while B-class properties represented the remaining 27%. No office projects were completed in the first half of 2024. However, by the end of the year, two new office buildings, totalling 19,500 sqm, are expected to be delivered. Additionally, reconstruction of the smaller office building Svatopetrská D (1,300 sqm) commenced in the first half of this year. No new office project commenced construction during H1 2024.
81,900 sqm of modern office space is under construction across seven office projects. The largest are Centrum Šumavská III (25,400 sqm), Ponávka A4 (16,800 sqm) and Nová Zbrojovka – D4 (12,000 sqm). More than 61,100 sqm is projected for completion next year.
The largest transaction in the first half of 2024 was the pre-lease by flexible office space provider Scott.Weber Workspace in the upcoming project Dornych (5,600 sqm). This was followed by the new lease of Novanta in the office complex Campus Science Park (3,600 sqm). The third largest transaction was the renegotiation of PKV in the building Spielberk Tower B (3,300 sqm). In H1 2024, technology and pharmaceutical companies accounted for the majority of the total demand.
80,200 sqm of modern office space was vacant at the end of H1 2024. The vacancy rate fell to 11.6%, representing a decrease of 2.1 percentage points compared to H1 2023. In H1 2024, prime headline rents on the Brno office market slightly increased, ranging between €16.50 - 17.00 sqm/month. However, some office units can be leased for significantly higher rents.
Radka Novak, Head of Office Agency, Central and Eastern Europe at Cushman & Wakefield, comments: “The Brno office market is showing remarkable resilience despite a slight slowdown in demand. The drop in vacancy rates in H1 2024 indicates positive market absorption. Compared to the Prague market, we see continued construction, often on a speculative basis. Despite the current challenges the developers are facing, Brno features projects of metropolitan quality, offering tenants a positive outlook for the future.”
The modern office stock in Ostrava totalled 250,300 sqm in the first half of 2024. Most of the office buildings (70%) were constructed or renovated more than a decade ago. During the first half of 2024, one office building was delivered to the market. The former Ostravica-Textilia department store has been renovated and reopened under the brand Boutique Business Inkubátor Ostravica. The building includes office space of 6,800 sqm. This owner-occupation deal was also the most significant transaction on the market. This was followed by a new lease signed by Scott.Weber Workspace in the Organica building (4,600 sqm), and a new lease signed by Heimstaden in the IQ Ostrava building (3,300 sqm).
29,800 sq m of modern office space was vacant at the end of H1 2024. The vacancy rate increased by 4.1 percentage points year-on-year to 11.9%. However, compared to the end of 2023, it decreased by 4 percentage points. In H1 2024, prime headline rents on the Ostrava office market remained unchanged at €14.00 - 14.50 sqm/month.
