Wednesday, 12 August 2026
Prague’s office market entered the second half of 2026 with historically low availability, limited new completions and a leasing market increasingly dominated by companies extending existing contracts rather than relocating.
Modern office stock in the Czech capital stood at approximately 3.95 million sqm at the end of the second quarter, while vacancy remained at 5.8%, its lowest level since 2020. Colliers also reports particularly limited availability in the city centre and Karlín, where vacancy was around 3.6% and 3.2%, respectively.
Independent Q2 figures published by CBRE in late July support the broader picture, putting Prague office stock at 3.95 million sqm and vacancy at 5.8%. CBRE expects the vacancy rate to remain broadly stable during 2026.
The shortage is most evident in newer, higher-quality buildings in established business locations. While companies continue to require modern workplaces, the number of immediately available alternatives remains restricted, making extensions of existing leases increasingly common.
Renegotiations represented approximately 70% of gross leasing activity during the quarter, according to Colliers. CBRE independently calculated the share at 69%. Colliers attributes the unusually high proportion partly to restricted availability, the cost of moving and the fact that much of the future development pipeline is either already committed or some distance from completion.
Technology companies accounted for more than one-third of leasing activity during the period, while pharmaceutical and healthcare businesses were also prominent occupiers.
Development activity is nevertheless beginning to increase. Approximately 309,300 sqm was under construction across Prague at the end of Q2, although around 58% had already been secured by future occupiers. CBRE reports the same pre-leasing ratio and describes the amount of genuinely speculative development as limited.
Part of the pipeline also consists of properties being developed for specific owners or major occupiers, including Česká spořitelna, ČEZ, Creditas and Generali. As a result, the headline construction figure overstates the amount of new space that will ultimately reach the open leasing market.
Only one significant office project was completed during the second quarter: the refurbishment of Danube House in Karlín. The renovated Class A property was already fully occupied before completion, illustrating the depth of demand for modern space in established locations.
Meanwhile, developers have started several smaller schemes in central Prague. These include Vinohradská 8 and the redevelopment of properties around Hybernská Street and Náměstí Republiky. The projects point towards increasing interest in smaller, centrally located developments rather than exclusively large office campuses.
The supply imbalance is also influencing rents. Prime rents in central Prague remained around EUR 30 per sqm per month during Q2, while stronger demand in Karlín, Smíchov, Pankrác and Brumlovka helped lift levels in the wider central market to approximately EUR 21.50–22.50.
Future projects are testing considerably higher levels. Space scheduled for delivery in 2027 and 2028 is being marketed above EUR 35 per sqm per month in central locations and at approximately EUR 23–28 across the wider centre. These figures represent asking levels for forthcoming projects rather than rents already achieved across the market.
The combination of low vacancy and restricted speculative construction is strengthening landlords’ position, but the unusually large share of lease renewals also highlights a constraint on market mobility. Companies may want newer or different space, yet the combination of availability, rents and relocation costs is making remaining in existing premises the more practical option for many occupiers.
A further change to Prague’s development environment is approaching with the new Metropolitan Plan. The planning framework is expected to become effective from 1 September 2026 and replace the city’s existing planning system dating from 1999. For the property sector, its significance will be particularly evident across major brownfield locations where residential, office, retail and public infrastructure are increasingly being planned together.
The immediate effect on office supply is likely to be limited because major developments still require lengthy preparation and permitting. Over the longer term, however, a clearer framework for large regeneration areas could help unlock development capacity at a time when Prague needs additional modern commercial and residential space.
For now, the market remains defined by a mismatch between demand and genuinely available high-quality offices. Prague may have more than 300,000 sqm under construction, but with a substantial part already committed, occupiers searching for large blocks of modern space continue to face relatively few options.
That imbalance is increasingly shaping both leasing decisions and development economics. Rather than a broad office-market recovery driven by rapidly expanding take-up, Prague is seeing a more supply-constrained phase in which existing buildings are retaining tenants, new projects can command higher rents and developers have greater justification to bring carefully positioned schemes forward.
