Czech Republic High number of renegotiations and expansions

Brno

Office Supply/Stock

The total modern office stock in Brno reached 689,600 sqm in H2 2023. A-class properties accounted for 73 pct of the total modern stock, while B-class properties represented the remaining 27 pct. In H2 2023, one office project was completed – the reconstruction of the Hrad building (1,500 sqm) in the Nová Zbrojovka project. A total of 26,100 sqm of new space was added to the Brno office market in 2023.
No new office project commenced construction during H2 2023.
There are 55,200 sqm of modern office space under construction across five office projects. The largest ones: Ponávka A4 (16,800 sqm), Nová Zbrojovka – D4 (12,000 sqm) and Titanium X (10,900 sqm).
Of the total office space under construction, app. 19,500 sqm is expected to be completed in 2024.

Major office transactions

The largest transaction in H2 2023 was the renegotiation of the manufacturing company Honeywell in Honeywell Office Campus (14,000 sqm) located within CTPark Brno, followed by the renegotiation of the technology company Oracle Czech in Dorn (7,600 sqm). The third largest transaction was the pre-lease of 6,200 sqm in Dornych by an undisclosed tenant from the pharmaceutical sector.
In H2 2023, technology and pharmaceutical companies constituted the majority of the total demand. Renegotiations represented over half of the total demand volume in Brno.

Vacancy

A total of 80,300 sqm of modern office space was vacant at the end of H2 2023. The vacancy rate fell to 12.8 pct, representing a decrease of 59 bp compared to the end of 2022.

Rents

In H2 2023, prime headline rents on the Brno office market remained stable at 16.00-16.50 EUR/sqm/month. However, some office units can be leased for significantly higher rents.

On the Brno market, 2023 brought a significant increase in activity in terms of closed leasing deals: it is the highest market activity in the history of RRF. The key parameter was namely the high number of renegotiations and expansions among largest tenants on the market, and also the increased interest especially from local companies in the fitted-out offices left by other tenants during space reductions.
Lukáš Netolický, Cushman & Wakefield’s Head of Regional Cities, seated in Brno

Ostrava

Office Supply/Stock

The modern office stock in Ostrava totalled 239,300 sqm in H2 2023. Most of the office buildings (70 pct) were constructed or renovated more than a decade ago.Two office buildings were delivered to the market during H2 2023. In the city centre, the developer Contera completed the new administrative building Organica (19,800 sqm). The next completion was the fully renovated building LT Cube2 in Ostrava Poruba with a total office space of 2,600 sqm. Currently, one mixed-use project with a total of 2,500 sqm of office space is being planned for construction.

Major office transactions

The largest transaction in H2 2023 was the renegotiation of the manufacturing company Siemens in The Orchard Ostrava (5,200 sqm). Among the largest transactions was also the new lease of Národní Rozvojová Banka in the building Nordica Ostrava (450 sqm).

Vacancy

A total of 41,000 sqm of modern office space was vacant at the end of H2 2023. The vacancy rate increased by 10.1 pp year-on-year to 17.1 pct.

Rents

In H2 2023, prime headline rents on the Ostrava office market remained unchanged at 14.00-14.50 EUR/sqm/month.