TENANTS ACTIVITY BRINGS POSITIVE NEWS TO PRAGUE OFFICE MARKET
According to the latest study by CB Richard Ellis, a starting recovery of the office market on developers’ side, already seen last quarter, continues with a number of office projects where construction started in Q3 2010. 63,000 sq m of office space commenced construction in Q3 2010, demonstrating developers confidence.
As commented by Jan Lovetinsky, the Head of Office Agency, positive signs are coming also from tenants: ‘With net absorption being low in 2009 and even negative in H1 2010, the Prague office market returned to positive numbers again and absorbed ca. 13,000 sq m in Q3 2010. This can be viewed as the first sign of the office market recovery on tenants’ side, especially bearing in mind that almost all net absorption refers to class A office space.‘
Positive net absorption and limited amount of completions in Q3 2010 resulted in the overall Prague vacancy rate decreasing by 0.6 p.p q-o-q to 13.2%. However, the vacancy rate is expected to increase again in Q4 due to the high amount of vacant space expected to come to the market.