Demand for offices in Prague is still growing

Prague - The demand in the Prague office space market remains strong this year as well. In the first three quarters, 213,924 square meters were leased. If the current pace continues, the demand could exceed the record from 2003, which stands at 267,170 square meters. This is indicated by a study from CB Richard Ellis.
    "The success in the office space market throughout 2006 reflects the ongoing demand from tenants for well-located, top-quality office buildings and also highlights the importance tenants place on office space as a supportive resource for their primary business activities," said Richard Curran from the Prague office of CB Richard Ellis.
    Demand is usually stronger in the fourth quarters. In the third quarter of this year, the demand amounted to approximately 55,200 square meters. Although this represents a decrease of about 39 percent compared to the previous quarter, year-on-year the demand increased by ten percent.
    In Prague, there were 1.89 million square meters of office space in the third quarter, the same as in the previous quarter. The largest amount of office space is located in Prague 4 (22.7 percent), followed by Prague 1 (19 percent) and Prague 5 (13.1 percent).
    The trend of declining vacancy rates continued in the third quarter of 2006, with the rate decreasing by more than two percentage points to 8.96 percent quarter-on-quarter. The reason was strong demand and a lack of new space delivered to the market. Despite the decrease in the vacancy rate, the highest achievable rents in Prague still range between 18 and 19 euros per square meter per month.
    Yields from office properties continued to decline, but at a slower pace. Current yields from office properties stand at 5.70 percent.