Renovating an existing office is particularly advantageous when the tenant does not need major layout changes and wants to avoid high equipment costs. In this case, the tenant must negotiate a lease renewal with the owner well in advance of the expiry date. This is a relatively common practice as statistics show. For example, in Prague last year, 15 of the 20 largest transactions were renegotiations, accounting for 51% of total gross demand. However, tenants' demands and office space standards are growing. Thus, it is important that owners are willing to offer certain concessions during renegotiation – such as modernising commons areas, installing electric car chargers or improving building technology – otherwise there is a risk that the tenant will leave.

An additional disadvantage of this situation is that some older buildings can no longer be adapted to the highest standards in an economical way. Therefore, if a tenant requires the highest levels in terms of air quality or digital solutions, for example, they often have no choice but to move to a new Class A building.

Rising equipment prices favour renovations

Rising equipment prices, which have increased significantly over the past five years: in some cases even doubling, also favour renegotiations and thus renovations. The first wave of price increases came with COVID-19 and associated hygiene measures, which disrupted supply chains. Russia’s war in Ukraine then followed. Although the market for finishing materials is gradually stabilising and there is no longer such a significant shortage of workers in the construction industry, prices have not returned to their original levels.

A comprehensive fit-out of a developer's construction project therefore represents a significant investment, with the largest item being technical installations and space division. The latter consume 85-90% of total budget. In addition, Prague's Class A office buildings achieve a very high standard not only in technical but also in architectural solutions. High-quality workmanship, precise details and the finest materials used in interiors and for furniture all significantly increase the cost of implementing a modern fit-out that allows an empty space to be transformed into a functional office tailored to a specific tenant. It is therefore no surprise that at the end of 2024, finishing work in offices in Prague cost an average of €1,000 per square meter for a standard design that was pleasing to the client.

When renegotiating, on the other hand, it is often sufficient to make minor cosmetic changes that are inexpensive and quick to implement: such as replacing lamps, decorations, repainting walls or adding more green elements. Even such simple changes can refresh the appearance of the office and please employees.

So when should you choose a new office?

If the tenant's expectations cannot be met at the current location, it is necessary to start looking for new premises. This is not only a matter of location, finances and layout but also technology, energy efficiency and employee amenities. In many cases, there are also requirements for modern building certifications such as WELL and LEED, WiredScore, SmartScore, ActiveScore or AirScore D&O.

The first step in finding new premises should be to analyse individual locations with regard to employees’ places of residence and the commute time to the potential new headquarters or access to various means of public transport. Based on this analysis, it is then possible to select the part of the city that is not only the most convenient in terms of transport but also optimal in terms of reducing the organisation’s carbon footprint.

Colliers offers a comprehensive solution from design to implementation

Regardless of whether a company decides to renovate its current premises or move to new offices, it is crucial to choose the right partner for overseeing the entire process: from concept to implementation.

Colliers offers comprehensive Workplace Advisory services, which begin with an analysis of the company's current situation and needs. Experts first assess how the company actually uses its space, what its requirements are for future growth, and what trends in the workplace will affect its needs. Based on this analysis, advisors then recommend an optimal strategy: whether it is more advantageous to invest in renovating the current premises or to look for a new location.

When renovating existing offices, Colliers provides all the necessary services from design to complete implementation. The space can be organised, for example, in line with the Colliers Newffice concept, which aims to create a working environment that combines flexible office space with technological solutions and sustainability. This creates offices that people want to spend time in and that respond to the challenges and trends that companies will face in the coming years.

If a company decides to move to new premises, Colliers will search for suitable properties that meet the business’ specific requirements. Colliers’ team of specialists will then negotiate optimal lease terms: including rent, contract length and fit-out contributions.

The company can entrust the entire process to a single partner who will coordinate all steps and minimise risks associated with such a significant change as relocation or comprehensive office renovation.