While more than 270,000 square meters of new office space entered the market in the country’s largest cities in 2019, that figure will not reach 90,000 this year, iDnes.cz said, citing consultants Cushman & Wakefield.
Interest in new offices in Prague and Brno has already waned considerably last year, when the switch to working from home showed many companies that they didn’t need to rent so much space, said the information site.
Experts believe this factor, combined with a shortage of construction workers, has also impacted developers, who are reassessing some planned office projects.
Josefína Rybářová of real estate consultancy firm JLL told iDnes.cz that construction projects were put on hold even before the pandemic due to rising construction costs. The current low level of new construction is the result of brakes put in place for two years, she said.
In the Czech Republic’s largest market, Prague, less than 70,000 square meters of new office space will be created in 2021, compared to the long-term average of around 150,000 per year.
The number of new offices in Brno this year is estimated to be half that of last year and around two-thirds less than in 2019.
Cushman & Wakefield rental team leader Radka Novak told iDnes.cz there won’t be many more new projects in 2022 than there are this year.
Optimism is gradually returning and several relatively important projects have already started to be built; However, their completion is not expected until 2023, she told the news site.
Leoš Anderle, CEO of developer Sekyra Group, told iDnes.cz that it was necessary to take into account that the construction of such structures cannot happen overnight. If work begins on a desk this year, it could be completed in two years, he said.
Banks are also cautious about granting loans for the construction of office projects and developers are waiting for a time when they can use pre-approved lease agreements as a source of funding, JLL’s Martin Stričko told the website. ‘information.
There is currently more free office space in Prague since anytime since 2017, Cushman & Wakefield said.