Q1 2017
Stock and Supply
In Q1 2017, one new office project was completed in Prague.
Dock In Two, with ca. 6,900 m2 of office space, is located in the
inner city of Prague 8. At the end of Q1, the total modern office
stock in the capital city of Prague increased to its current level
of 3,231,000 m2. The share of A class office space stands at 71%,
with top quality projects, i.e. AAA class buildings, representing
ca. 17% of the total stock. The largest office district remains to
be Prague 4 (26.8% of the total stock), followed by Prague 5
(16.2%) and Prague 1 (15.8%).
Currently, there is more than 343,000 m2 of office space under
construction with scheduled completion between 2017 – 2019.
New supply will be mainly delivered to Prague 5 (32% of the
supply under construction in six projects), followed by Prague 4
(26% in six projects) and Prague 8 (19% in three projects).
Following last year’s very limited supply, which reached only
36,200 m2, the new supply for 2017 should increase to the level
of ca. 151,000 m2.
2017 Major Planned Office Projects*
Completion
Size (m2)
Prague 5
Q3 2017
26,400
Prague 4
Q4 2017
22,000
Butterfly
Prague 8
Q4 2017
17,900
Aspira BC
Prague 5
Q4 2017
16,400
Five
Prague 5
Q2 2017
13,400
Rustonka R1
Prague 8
Q2 2017
11,300
Property
District
Mechanica
Main Point
Pankrác
* Only projects with GLA exceeding 10,000 m2 of office space were included in this overview
Source: JLL, PRF, Q1 2017
During Q1 2017, one office project commenced construction.
The reconstruction of Telehouse in Prague 6 with ca. 20,000 m2
of office space is scheduled for completion in 2019.
Source: JLL, PRF, Q1 2017
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved.
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Q1 2017
Demand
RentalLevels
In Q1, gross take-up reached ca. 90,100 m2 which represents a
q-o-q decrease of 8.5%. The level of renegotiations declined
significantly from 29.6% in Q4 to 18.3% in Q1.
In Q1 2017, prime headline rents in the city centre remained
unchanged, oscillating at the level of €19.0 – 20.0 m2/month.
Inner city rents varied between €15.0 – 16.0 m2/month in
Pankrác (Prague 4) and at €14.5 – 15.5 m2/month in Smíchov
(Prague 5) and Florenc (Prague 8). Rents in the outer city
markets remained at €13.0 – 14.5 m²/month.
The highest level of Q1 leasing activity was due to several
confidential pre-leases, which were signed on Main Point
Pankrác, recorded in Prague 4. Its share on total volume of
lease transactions in Q1 was approximately 35%.
Take-up in Q1 2017
9%
2%
Prague 1
9%
3%
Prague 2
1%
15%
Prague 3
Net Absorption*
Prague 4
* (Net absorption/demand is the difference between the square meters of
Prague 5
companies that moved-in and expanded and companies that moved-out or
decreased their rented space in the same period of time.)
Prague 6
2%
All of these values refer to prime levels achieved in a limited
number of prime properties. In general there are ca. 1-3
properties in each submarket which achieve these levels as
they are usually brand new, above standard quality and/or very
well located. Second hand products stand at approximately
€1.5 below the afore-mentioned ranges.
Prague 7
8%
35%
In Q1 2017, Prague’s net absorption reached ca. 42,900 m2. The
largest amount of available space was absorbed in Prague 8
and Prague 9. Bearing in mind the level of new supply coming
to the market this year and the current pre-lease dynamics, we
expect 2017 net absorption to reach ca. 160,000 – 180,000 m2.
Prague 8
Prague 9
Prague 10
16%
Source: JLL, PRF, Q1 2017
The majority of the gross take-up volume in Q1 2017 was
signed by the IT sector (17% of Q1 gross demand), followed by
professional services (16%) and consumer goods companies
(10%).
Vacancy
Due to continued strong net take-up and limited new
speculative supply, the Q1 vacancy rate decreased by 1.2
percentage points, when compared to the previous quarter, to
its current level of 9.4%. The lowest vacancy rate was recorded
in Prague 9 (6.7%), Prague 8 (7.6%) and Prague 2 (7.8%). On the
other hand, the largest share of available space remains in
Prague 7 (14.8%).
Net Absorption in Q1 2017
m2
12,000
10,000
8,000
6,000
4,000
2,000
0
-2,000
Q1 Net Absorption
Source: JLL, PRF, Q1 2017
Vacancy Rate in Core Office Districts (Q1 2017 vs Q1 2016)
20%
16%
12%
14.6%
11.6%
8%
13.9%
13.7%
8.4%
9.1%
8.3%
11.0%
7.6%
9.4%
4%
0%
Q1 2016
Source: JLL, PRF, Q1 2017
Q1 2017
Head of Research
Czech Republic
[email protected]
+420 224 234 809
Senior Research Analyst
Czech Republic
[email protected]
+420 224 234 809
jll.cz
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