Companies in regional cities in the Czech Republic have been facing an increasing challenge in finding quality office space, reports the Regional Research Forum in H2 2024 Brno and Ostrava Office Market Data. A shortage of office space is thus creating pressure on the market and tenants.
The total modern office stock in Brno amounted to 699,300 sqm at the end of H2 2024. Class A buildings accounted for 73% of the total stock, while the remaining 27% consisted of Class B offices.
In H2 2024, only one office building was completed – Vlněna I in the former Vlněna factory complex, owned by the developer CTP. This was also the only office project completed in 2024. Approximately 21,700 sqm of office space is expected to be delivered in 2025. Vacancy remained stable year-on-year at 12.7%. The highest achievable rent increased slightly to €16.75–17.00/sqm/month.
Currently, eight projects are under construction with a total modern office area of 78,000 sqm. The largest project is Ponávka A4 bringing 16,800 sqm to the market.
The largest transaction in H2 2024 was the pre-lease by manufacturing company Garrett in the planned project CTPark Brno A 3.2 EF (5,900 sqm), followed by a new lease signed by the same company at the Honeywell Office Campus (5,800 sqm). The third largest transaction was the lease renegotiation of technology company AT&T at the Campus Science Park A building (4,000 sqm).
The manufacturing and technology sectors accounted for the largest share of total demand in H2 2024. More than 83% of the total realised demand in Brno consisted of new leases, pre-leases, and expansions.
No new office buildings were completed in H2 2024, and there are currently no office projects under construction in Ostrava. The total modern office stock in Ostrava at the end of H2 2024 amounted to 250,300 sqm. Most office buildings (70%) were built or refurbished more than ten years ago.
In the second half of 2024, no significant lease agreements met the criteria for inclusion in the overview of the largest completed transactions in Ostrava. However, RRF continues to monitor the demand in the Ostrava office market.
At the end of H2 2024, there were 29,000 sqm of vacant offices in Ostrava. The vacancy rate decreased by 4.3 percentage points year-on-year to 11.6%. In H2 2024, prime headline rents on the Ostrava office market remained unchanged at €14.00 - 14.50 sqm/month.
"We see demand for premium offices across the regions – besides Brno and Ostrava, cities such as Plzeň, Olomouc, Hradec Králové, Pardubice, and České Budějovice are also coming to the forefront. Active development in Brno helps to maintain market balance. In Ostrava, most of the office stock was built or refurbished more than ten years ago. However, in other regions, the long-standing low level of modern office construction is starting to show, leading to decreasing availability and rising rental prices, even in mid-sized cities. A shortage of office space is also evident in Liberec, where the supply of modern spaces remains very limited. Overall, this is creating additional pressure on the market and tenants," commented Pavel Novák, Head of Office Agency at Savills.
