2023-02-10-莱坊-European_Office_Dashboard_-_Prague_Q4_2022_2页_461kb

2022 Q4 Occupier Market Summary

Prague Office Market Performance

• Q4 2022 recorded 153,192 square meters of office take-up in Prague, representing the highest annual total of 551,488 sqm in a decade, indicating strong market recovery despite pandemic-related challenges.
• The vacancy rate decreased to 45.6%, or 7.7% as a percentage, which was compressed partly due to low construction completions and overall economic uncertainty during the year.
• Prime rent increased to €318 per square meter, up 10.4% year-on-year, driven by sustained demand for top-quality space; however, average rents showed lesser growth, suggesting a wider value gap between prime and B-class properties.

Economic Context

• Economic indicators highlight uncertainty in the Czech Republic, with job vacancies decreasing in 2022 amid slower hiring demand, and unemployment rising to 3.7% by December but remaining the lowest in the Euro Area compared to a ten-year average.
• Service sector employment expectations ticked downward in Q4 2022, influenced by high inflation, while service confidence held steady throughout Q4 after a previous deterioration in Q3.

Key Takeaways

• High take-up and recovering occupancy metrics suggest occupier confidence is returning, but reluctance to relocate due to uncertainty led to increased renegotiations.
• Economic headwinds persist, potentially affecting future market decisions, as indicated by unfilled vacancies and unstable employment outlooks.

Occupier Market Headlines Summary

• Take-up: 153,192 sqm in Q4 2022, total annual take-up of 551,488 sqm (10-year high).
• Vacancy Rate: 7.7% in Q4 (downward trend).
• Prime Rent: €318 psqm (year-on-year +10.4%).
• Economic indicators show declining job vacancies and low unemployment rates, with service confidence remaining comparatively stable.