A recent analysis of the Prague office market by Colliers has once again confirmed that proximity to metro (subway) stations is one of the main factors influencing the price, availability and attractiveness of office space. The highest rents near Prague metro stations continue to be found in the city centre, where prices for premium office space reach up to €30 per sqm per month. In the wider city centre, the highest rents go as high as €22, and on the city outskirts, up to €16.50 per sqm per month. At the same time, differences between individual locations are becoming more pronounced: not only based on distance from the city centre, but also on building quality, the age of the office stock and the current supply of available space.
Premium rents remain high around public transport stations
“The most expensive locations continue to be stations in the very centre of Prague. The highest rents are found around the Náměstí Republiky and Muzeum stations, where prime rents hover around €30 per sqm per month,” says Josef Stanko, Director of Market Research at Colliers. In general, he notes, the highest prices are concentrated around metro transfer (hub) stations and in the immediate vicinity of transfer points, such as Národní třída and Křižíkova. Rental prices in these most attractive zones have stabilised and hover around 30 euros per square meter per month.
However, these figures are based on completed transactions. Current rent asking prices for projects under construction often differ by as much as several euros, and these projects in popular locations are expected to set a new price standard very soon.
At the opposite end of the price spectrum are locations near stations on the outskirts of the city. Petřiny has the lowest prime rent at €10 per sqm per month. It is followed by Zličín at €13 and Opatov at €14.
More Expensive Areas Outside the City Centre
However, even a greater distance from the city centre does not automatically mean lower rent. Rents of €20 or more are also common near some stations outside the capital’s historic centre, particularly around Pankrác, Budějovická, Invalidovna, Palmovka and Roztyly. This is due to a combination of good transportation access, modern office developments, nearby amenities and growing interest from companies in locations that offer a high-quality work environment outside the city’s most expensive downtown area.
Vacancy Rates Have Fallen
The vacancy rate for Prague office space has fallen below 6% this year. There are significant differences among individual districts, though. If we look only at top-tier AAA-class buildings, those in the city centre recorded a vacancy rate of just 2.3%, so prospective tenants have practically nothing to choose from. In addition to the city centre itself, Karlín also achieved a very low vacancy rate of 2.7%. Brumlovka is doing slightly better at 4.8%, as is Pankrác at 5.2%. In contrast, Stodůlky and Nové Butovice report vacancy rates exceeding 17 and 10%, respectively. “Prague thus has two distinct office markets: one overheated and the other stagnant,” says Josef Stanko, describing the situation.
Generally speaking, the lowest vacancy rates are currently found around the Invalidovna, Hlavní nádraží and Flora stations, where they hover at just around 1%. Radlická, Náměstí Republiky, Křižíkova, and Nádraží Holešovice also show very low availability of vacant space, with vacancy rates reaching approximately 2%. Vltavská, Vysočanská, Florenc and Pražského povstání remain at 3%.
At the opposite end of the spectrum, you have the areas around the Želivského, Stodůlky, Kolbenova, Roztyly and Nové Butovice stations. The vacancy rate at Želivského is 28%, at Stodůlky 18%, at Kolbenova 15%, at Roztyly 14 percent and at Nové Butovice 13%. Year-on-year, the vacancy rate in the area around the Želivského station fell from 35 to 28%, at Kolbenova from 17 to 15%, and at Roztyly from 20 to 14%. This demonstrates that even outlying areas are slowly attracting tenants as the city centre becomes more crowded.
Offices Are Ageing
“Future developments in the office market around metro stations will be influenced not only by new construction, but also by the ageing of the existing office stock. By 2030, up to 600,000 sqm of office space in Prague will be 20 or more years older,” notes Josef Stanko. According to him, this creates significant opportunities for modernising buildings, raising their technical standards and, in some cases, changing their use. For tenants, this also means a wider range of options: from state-of-the-art premium projects to more affordable offices in older buildings.
Prime rent represents the benchmark for a consistently achievable rent for a unit measuring approximately 500 to 1,000 sqm in a state-of-the-art office building in the most sought-after location within a given submarket or area. This figure does not include unique units or specific transactions.
