Prague office spaces filling up with tech professionals and flexible work environments

A new report by real estate consultancy firm Jones Lang LaSalle found that the total amount of office space in Prague grew in the fourth quarter of 2022. A total of 151,800 square meters of office space was leased, the largest quarterly volume for concluded leases in the real estate market since 2018.

Technology, finance, construction and development, professional services, pharmaceutical and medical, and NGO sectors represented a net take-up of 63,300 square meters of Prague office space at the end of 2022. In total 547,000 square meters of office space was leased in Prague in 2022.

“Despite the current economic headwinds, rental, and occupancy levels continue to be strongly supported by stable demand and limited supply,” the Jones Lang LaSalle report said.

The total size of the Prague office market in the fourth quarter of 2022 exceeded 3.8 million square meters. The total volume of new office space completed in 2022 reached 75,400 square meters. The only office building completed in the fourth quarter was Smíchov City Na Knížecí in Prague 5 with a total size of 8,300 square meters. It is part of Sekyra's Smíchov City project, which will take over a decade to complete.

Currently, there are over 290,000 square meters of vacant office space available in Prague a vacancy rate of 7.7 percent. For comparison, Berlin saw a vacancy rate of 3.2 percent in the last quarter of 2022 while to the east, office vacancies in Bucharest, Riga, and Warsaw reached 10 percent.

Vacancies differed by Prague district; the most office space was available in Prague 4 in December, followed by Prague 5. By contrast, less office space was available in Prague 10 and Prague 2.

At the end of December 2022, approximately 184,000 square meters of office space were under construction in Prague with anticipated completion dates of 2023 and 2024. In 2023, work is expected to start on over 220,000 square meters of offices in the Czech capital.

In terms of building trends, the Jones Lang LaSalle report highlighted sustainability as an important feature of office spaces of the future.

“Trends towards quality buildings with sustainable features and diverse amenities will continue to gain momentum as companies strive to achieve their goals within the ESG (environment, social, and governance) principles,” the report said.

The rise of flexible office space, a type of workspace designed to provide employees with a variety of different places and ways to work, saw significant growth – at the end of 2022, flexible office space in Prague totaled 103,300 square meters in 76 centers. Its share in the total volume of Prague’s modern offices rose to 2.7 percent.

Eight flexible office centers opened in Prague last year in total, including one Fleski center in BB Centrum in Prague 4 that opened at the end of last year.