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Prague office vacancy rate at 12.97 pct

  11:30

JLL says the lack of new development on the Czech office/retail markets has helped cut vacancy rates and keep rents stable

Harfa Office Park Amadeus — the only new office space in Q1 2011 foto: LighthouseČeská pozice

The office vacancy rate in Prague dropped to 12.97 percent in Q1 2011, according to the latest Prague City Report by property consultants Jones Lang LaSalle. With the development slowdown caused by the financial crisis still resulting in a low amount of new supply, growing demand has contributed to further drops in the vacancy rate, it said.

The only new office space added to the market in the first quarter was the 19,600 sqm of Harfa Office Park Amadeus in Libeň-Prague 9. Another 85,800 sqm of office space is currently under construction in 11 buildings that are due for completion in 2011, yet over 58 percent of this space is pre-let, which will help further push vacancy rates slightly downward.

Take-up on the office market was up 73.7 percent year on year in Q1 2011 at 85,020 sqm. Renegotiations accounted for 33.5 percent of the total gross take-up and relocations by companies moving within the modern stock represented another 25 percent.

High Street boom

Harfa is also the site of the most recent Prague shopping center, as following the Q4 2010 opening of Galerie Harfa no more new shopping centers are expected to open in 2011. Retail development is currently focusing on downtown shopping, both in Prague and in regional cities such as Brno and České Budějovice, where high street activity has been particularly strong.

The Prague City Report cites strong and rising retail demand from the outset of 2011 but notes that it is restricted mainly to the best-performing shopping centers — and the high street. Due to the limited space on Prague’s Na Příkopě street, brands are now looking for space in adjacent areas. Retail rents in prime shopping centers and the high street have both seen a slight increase, with high street rents seen as likely to continue going up.

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