Although the second quarter saw only two completed projects and the vacancy rate for Prague offices continues to fall, construction activity has intensified. A total of four projects were launched, and the total volume of properties under construction reached 212,600 sqm. The total volume of the Prague office space market reached 3.94 million m². However, by 2029, it could grow by up to 600,000 sqm of new space. This is according to a survey by Colliers.
“The increase in the number of projects under construction is a positive sign for the market and a clear promise for the future. Although only 11,300 sqm will be completed in the second half of 2025, bringing the total volume of construction for this year to only 26,600 sqm (one of the lowest figures for new construction ever recorded), we expect the market to see a positive turnaround,” says Josef Stanko, director of market research at Colliers. According to him, up to 600,000 sqm of new office space can be expected between 2027 and 2029. “Many completion dates will likely change, but if developers launch at least half of all potential plans, the market will gain a much-needed influx of new office space,” he adds.
By the end of 2025, construction is expected to begin on five additional projects with 119,500 m² of office space. All are located in Prague 4. This may shift the focus of the rental market back to Pankrác, Brumlovka and Roztyly, where the number of new projects has been limited in recent years.
The expected decline in vacancy rates has occurred
At the end of the second quarter, the Prague office space market represented 3.94 million m². The vacancy rate continues to decline, and at the end of the second quarter of 2025, it stood at 6.6 percent. This represents a year-on-year decline of 1.3 percentage points and suggests that the continuing supply shortage is squeezing the market.
However, vacancy rates vary significantly across the city‘s office hubs:
- Karlín: decline to 3.9 percent (−40 bps)
- Pankrác: decline to 5.4 percent (−80 bps)
- Center: decrease to 4.4 percent (−20 bps)
- Stodůlky: stable at 11.4 percent
- Nové Butovice: increase to 8.6 percent
- Chodov: 12.7 percent
Demand still active
Gross realised demand in the first half of 2025 amounted to 253,100 sqm, similar to the previous two years. Net demand, adjusted for transactions by future owners, was 97,400 sqm, which is almost equal to the volume of renegotiations and subleases (94,700 sqm).
“During the second quarter of 2025, we also recorded several pre-leases that fell into the owner occupancy category. Specifically, these include ČEZ, which will occupy its three newly acquired buildings in the Smíchov City project next to the Česká Spořitelna Campus starting from 2028, and another project for Creditas Bank. Creditas acquired what’s known as Rohan City A2 several months ago but has only now begun construction of its future headquarters,” notes Josef Stanko, adding that these two transactions represent approximately 61,000 sqm in office space.
The remaining gross demand for the second quarter, amounting to 103,800 sqm, was 47/53 in favour of renegotiations. This falls in line with the continuing trend of lease extensions and renegotiations, given that there is currently very little space available in sought-after locations. In addition, the search and negotiation phase can now take up to 12 months or more, meaning that some tenants can easily miss out if they act too slowly or start too late.
Rents in prime projects will rise
Current benchmarks for the Prague office market are stable. Prime rents for office space in the centre of Prague are around €30 per sqm per month. Rents for the best offices in the wider centre (Karlín, Smíchov, Pankrác, etc.) increased by 50 cents quarter-on-quarter to €20.50. In areas farther from the centre, it remains stable at €16.50. “Based on current transaction and construction activity, we expect that the wider centre in particular will provide arguments for a rapid increase in reference rents shortly: to €35 in the city centre and €25 in the wider centre,” says Josef Stanko.
Outlook: Good results, but not for free
“The current market situation is optimistic. Despite limited supply, the market remains professional, transparent and competitive at the European level. This attracts investors,” says Josef Stanko, listing market positives. Although the market has tilted toward landlords in some locations, opportunities for tenants still exist – especially if they act quickly or are prepared to compromise. For some projects to get off the ground, it is also likely that the tenant’s commitment before construction will be a decisive factor in order for the project to receive financing. Historically, pre-construction leases have been very rare. This approach will therefore need to change.
