Friday, 22 August 2025
Prague’s office market may expand by as much as 600,000 square meters by 2029, according to a new report from Colliers. The forecast comes as construction activity picks up despite a historically low level of completions in 2025.
In the second quarter, only two projects were finalized, adding 11,300 square meters to the market. For the year as a whole, completions are expected to reach 26,600 square meters—one of the lowest levels of new supply ever recorded in the city. At the same time, four new projects were launched, bringing the total area under construction to 212,600 square meters.
Colliers projects that between 2027 and 2029, new deliveries could total up to 600,000 square meters, although not all planned projects are expected to move forward. By the end of 2025 alone, construction is scheduled to begin on five projects totaling 119,500 square meters, all located in Prague 4. This could reestablish Pankrác, Brumlovka, and Roztyly as key office hubs after a period of limited development.
The vacancy rate in Prague continues to decline, standing at 6.6% at the end of the second quarter—down 1.3 percentage points year-on-year. Conditions vary by submarket, with Karlín reporting vacancy at 3.9%, Pankrác at 5.4%, and the city center at 4.4%. Higher vacancy persists in areas such as Chodov (12.7%) and Stodůlky (11.4%).
Demand remained stable. Gross take-up in the first half of 2025 was 253,100 square meters, in line with recent years. Net demand reached 97,400 square meters, roughly equal to the volume of renegotiations and subleases (94,700 square meters). Several major owner-occupier deals were recorded, including ČEZ securing three buildings in the Smíchov City project for its future headquarters and Creditas Bank beginning construction of its new offices in Rohan City. Together, these transactions accounted for about 61,000 square meters.
Lease renegotiations continue to play a major role in market activity, representing 53% of second-quarter demand. Colliers notes that negotiation timelines can now extend to 12 months or longer, creating challenges for tenants who delay decision-making in a market with limited availability.
Rental benchmarks remain steady, with prime rents in central Prague at €30 per square meter per month. In the wider center, rents rose slightly to €20.50, while peripheral areas remain at €16.50. Based on current activity, Colliers expects upward pressure on rents in both the city center and wider central zones, potentially reaching €35 and €25 per square meter respectively.
Looking ahead, Colliers highlights that while Prague’s office market continues to attract investors due to its transparency and competitiveness, limited supply is shifting conditions toward landlords. Tenant commitments prior to construction may become increasingly important for projects to secure financing, marking a change from the traditionally low level of pre-construction leasing in the market.
