The Prague Research Forum announced the office market figures for the fourth quarter of 2015. Gross take-up amounted to 161,800 sq m, representing an increase of 78% compared to the previous quarter and the strongest quarterly result ever recorded on Prague office market. Also on a positive note, the vacancy rate decreased by 1.8 percentage points to 14.6% when compared to the previous quarter.

Strong development activity

The total modern office stock in Prague increased to 3,222,400 sq m in the fourth quarter of 2015. A-class stock reached 69% and B-class properties represented the remaining 31%. Top quality AAA class properties accounted for approximately 15% of the total office stock.

In Q4 2015, Enterprise Office Center in Prague 4 was completed which added ca. 32,000 sq m of office space to the market. Overall, the total office supply in 2015 exceeded 190,000 sq m.

Currently, there is approximately 123,700 sq m of office space under construction in Prague. In Q4 2015, the first phase of Rustonka (22,600 sq m) and Dock 02 (8,500 sq m) in Prague 8 commenced construction. On top of this, South Point (7,500 sq m) in Prague 4 and Butterfly (18,900 sq m) in Prague 8, which were on hold, have decided to re-commence construction works.

Strong occupier market

Gross take-up (including renegotiations and subleases) in the fourth quarter amounted to 161,800 sq m, representing an increase of 78% compared to the previous quarter and the strongest quarterly result ever recorded on Prague office market. The highest volume of gross take-up was recorded in Prague 5 (35%), Prague 4 (29%) and Prague 8 (11%). IT was the most active sector (37% of gross take-up), followed by banking sector (15%) and companies offering professional services (10%). The total share of renegotiations of gross take-up decreased from 43% in Q3 2015 to 35% in Q4 2015.

The most significant transactions of the fourth quarter of 2015 included the new lease of SAP Business Services Central Europe (24,900 sq m) in Metronom Business Center in Prague 5, followed by the renegotiation of Raiffeisenbank (18,800 sq m) in City Tower in Prague 4, the new lease of Oracle (10,400 sq m) in Aviatica in Prague 5 and the renegotiation of O2 (10,400 sq m) in BB Centrum Gamma in Prague 4.

In Q4 2015, the vacancy rate decreased by 1.8 percentage points to 14.6% when compared to the previous quarter. Total vacant space declined to 470,800 sq m. The highest vacancy rates were recorded in Prague 7 (32.7%), Prague 10 (16.4%) and Prague 6 (15.8%). Conversely, the lowest vacancy rates were recorded in Prague 8 (11.1%) and Prague 5 (11.9%).

Prime headline rents in the city centre of Prague remained stable and oscillated between 18.50 and 19.50 euro /sq m/ month. Prime headline rents in the inner city decreased to14.50 and 16.00 euro/ sq m/ month and in the outer city remained between 13.00 and 14.50 euro/ sq m/ month.