Only 26,300 sqm of new office space will be built in Prague this year, the lowest figure in the last ten years. Although the number of completed projects has fallen significantly, the total volume of construction in progress remains relatively strong, amounting to 244,200 sqm in 17 buildings at the end of the third quarter. However, the vacancy rate has fallen to 6.45 percent, while rental prices remain stable. An interesting trend is the dominance of domestic capital, which already owns about two-thirds of Prague’s offices. At the same time, the market is placing greater emphasis on LEED and BREEAM certification. This is according to a recent survey by Colliers.
Construction activity on the Prague office market was again very weak in the third quarter of 2025, with only one project started and none completed. Since the beginning of the year, only 15,300 sqm of new office space has been added in Prague. Given that, according to updated schedules, only one more project is to be completed in the fourth quarter, the total volume of new construction in 2025 will reach a mere 26,300 sqm, which is the lowest in the last ten years.
“However, the outlook for the coming period looks more optimistic. At the end of the third quarter, a total of 244,200 sqm of office space was under construction in 17 buildings, and by the end of the year, another seven projects with a total area of 99,200 sqm could be launched, with completion planned for the end of 2027 or 2028,” calculates Josef Stanko, director of market research at Colliers, adding: “Although this is a relatively high volume, it still lags significantly behind the levels seen in 2017 and 2018.”
The slower pace of new construction is also reflected in the overall supply of modern offices, which remains virtually unchanged year-on-year in Prague at 3.94 million sqm. This is not only due to the absence of completed projects, but also because part of the space is being continuously removed from the market – whether due to renovations, changes in use, or failure to meet modern office standards.
Limited supply does not dampen demand; vacancy rates continue to fall
The limited supply of new space has not had a significant impact on market activity and demand. Vacancy rates continue to fall and stood at 6.45 percent at the end of the third quarter, representing a year-on-year decline of 155 basis points. In absolute terms, only 254,200 sqm remains vacant.
Gross take-up in the third quarter amounted to 176,200 sqm, bringing the total volume for 2025 to 429,300 sqm. “This is roughly on par with the same period in the previous three years, all of which ended with strong results, with gross demand significantly exceeding 500,000 sqm, including cases of future own use,” comments Josef Stanko.
According to Stanko, net demand in the third quarter amounted to 78,500 sqm, with the total volume for this year reaching 224,700 sqm. Although the result for the quarter itself was impressive, the net volume for 2025 is actually the same as in the same period of 2017, which later recorded the highest net demand in history. “Therefore, we can say with certainty that 2025 will be one of the most successful years in terms of net realised demand in Prague. Most of the new demand this year was realised in the Smíchov, Pankrác, and Karlín hubs, with each of these locations recording at least one transaction over 15,000 sqm,” adds Josef Stanko, noting that renegotiations and subleases in the third quarter accounted for 97,700 sqm.
Local capital and sustainability
Another interesting trend is the significant investment activity coming primarily from domestic investors, from large real estate funds to private capital. At the end of the third quarter, approximately two-thirds of Prague’s office buildings were owned by domestic groups, while the share of Western European investors continues to decline.
At the same time, pressure on quality and environmental standards is growing. The vast majority of future projects are targeting higher levels of LEED or BREEAM certification. “At the end of the third quarter of 2025, we recorded that 56 percent of the Prague office market has BREEAM or LEED certification in the In Use or Final Scheme category,” says Josef Stanko, adding that certified buildings have an average vacancy rate of only 5.9 percent. Certified projects are often new buildings, which usually maintain high occupancy rates after being leased.
Rents remain stable for now, rapid growth expected
The Prague office space market remains stable in terms of key rental indicators. Rents for premium office space in the city centre are €30 per square meter per month, while in areas close to the centre, such as Karlín, Smíchov, and Pankrác, rents remain at €20.50 after an increase in the previous quarter. Rents in the outskirts of the city are around €16.50. Based on current transactions and construction, rents in and around the city centre are expected to grow rapidly.
