AI rewrites the rules of the office market. Access to talent, not rent, becomes the deciding factor

According to the latest analysis by Colliers, AI companies in Europe are concentrating in a relatively small number of cities: namely London, Paris and Berlin. But Warsaw and Prague rank among the cities with emerging ecosystems. For owners of office buildings, AI firms represent a new type of tenant: one that grows faster than most traditional companies and expects more than just floor space.

A tenant that outgrows its offices

AI companies are a new kind of tenant. They have strong capital backing, hire aggressively and often outgrow their premises within a relatively short time. Although most of them work in a hybrid model, the office remains essential for collaboration, recruitment, onboarding and building company culture. When choosing a location, they put proximity to universities, research institutions, venture capital investors and a skilled workforce ahead of rent levels. In their early stages they settle in cities’ innovation districts; as they grow, they move to prime central locations.

Their requirements for buildings go beyond the usual demands of technology companies. Flexible layouts, plenty of daylight and space for both teamwork and focused work are only the starting point. AI companies also need high power capacity and powerful cooling (water resources), fast connectivity and often secure server facilities for demanding computing workloads.

"For AI firms, what matters is where they can find people, not how much they pay per square meter. Building owners therefore need to ask themselves why top experts should come to their office space every morning. Winning proprietors (landlords) will be those who combine a prime location, strong digital and energy infrastructure and the ability to accommodate a tenant's rapid growth," says Josef Stanko, director of market research at Colliers.

Central Europe fills in the map

No Central European city has yet broken into the group of Europe's most advanced AI hubs, but the region already has a firm place on the cluster map. Warsaw belongs to the second group of locations with a favorable environment for AI development in Europe, alongside Dublin, Amsterdam, Zurich, Stockholm, Barcelona and Helsinki. Prague, Bucharest and Tallinn are building more specialized ecosystems. According to the Colliers analysis, however, their development is not yet sufficient to place them in the first or second group.

A broader shift in corporate strategy, now visible worldwide, has boosted the region’s prospects. Companies are increasingly moving away from the model of a single dominant headquarters. Instead, they distribute their activities across several cities, depending on where they can find the type of talent they need. Strategic and client-facing functions stay in the major capitals, while operational, analytical and technology roles move to places that offer a skilled workforce at a more competitive cost. The office is therefore becoming ever more closely tied to HR strategy. When choosing an office site, companies now weigh not only rent but also the quality of the environment, transport links and nearby amenities.

"Large headquarters are being supplemented or replaced by smaller, function-focused offices across a wider network of cities. Tenants place greater emphasis on flexibility, shorter commitments and space tailored to specific operational needs rather than headcount alone," explains Josef Stanko.

Prague, Brno and Ostrava play different roles

The Czech Republic has succeeded in attracting foreign investors from the AI sector. A recent survey by the ABSL association confirms this: companies choose the country mainly for the availability of qualified talent and its overall safety.

Prague remains the country's main hub. It benefits from its central location, a diverse pool of professionals and its ability to attract specialists from abroad. Companies therefore base mainly highly skilled roles here, such as financial management, compliance, strategic consulting or transformation management. Brno offers technical universities, a strong IT ecosystem and a workforce with language skills. This has made it one of Central Europe's most important technology centers, particularly suited to development hubs and technology teams. Ostrava is also attracting more attention. Alongside lower costs, it offers a growing number of technically oriented graduates and specialists. It appeals mainly to companies looking for experts in data analytics, automation, cybersecurity or shared services.

"Czech cities are not yet competing with London or Paris for AI companies' headquarters. They are competing for their development, data and technology teams. Whoever has offices ready for high power loads, cooling and rapid tenant growth will have a head start once demand intensifies," predicts Josef Stanko.