The shortage of high-quality office space in Prague persists. Renegotiations account for 70% of the market

Due to the lack of alternatives, companies often remain in their current spaces after their leases expire. This is evidenced by the high proportion of lease renewals, which account for approximately 70% of realized demand. More than 309,000 m² of office space is under construction, of which approximately 58% has already been pre-leased. These findings come from a recent survey by Colliers.

The total area of modern office space in Prague reached approximately 3.95 million m² at the end of the second quarter of 2026. During the period under review, only one office project was completed—the extensive renovation of the Danube House building in Prague’s Karlín district. After two years of construction work, CA Immo completed the modernization of this Class A office building, which seeks LEED Platinum certification and thus uses electricity exclusively from renewable sources. Furthermore, the building was fully occupied even before its official completion. The largest block of space was leased by Everpure, a company specializing in modern storage systems and data management; the second-largest tenant is Allegro.

The trend toward boutique offices is gaining momentum

Construction also began on three new office projects in the second quarter. What they all have in common is an attractive location in the city center. The largest of these is the Vinohradská 8 project in Prague 2, which will offer approximately 7,300 m² of premium office space, nearly 200 apartments and retail space. Construction has also begun on the renovation of the post office building known as Hybe in Hybernská Street and on the Palace Hybernia project near Náměstí Republiky. “These activities confirm developers’ growing interest in boutique office projects—smaller office buildings in prestigious locations that offer companies not only high-quality space but also a prestigious address and a distinct identity,” explains Josef Stanko, director of market research at Colliers.

Across Prague, approximately 309,300 m² of office space is currently under construction, of which about 58% has already been pre-leased. However, a significant portion of this volume consists of projects being developed directly for future owners or anchor tenants, such as Česká spořitelna, ČEZ, Creditas and Generali. “The situation is different on the open market. Most new projects are in the early stages of construction and are being offered at rents exceeding current market levels. Tenants are therefore approaching pre-leases with caution for now and often postponing their decisions until more advanced stages of construction, when the price level will have been better tested by the market,” comments Josef Stanko.

Vacancy rates remain low

The vacancy rate in Prague’s office market remained stable at 5.8% at the end of the second quarter, marking the lowest level since 2020. Positive net absorption, combined with minimal new supply, is gradually strengthening landlords’ negotiating position, particularly in the most sought-after locations.

The city center and Karlín have consistently reported the lowest vacancy rates. In the city center, the rate hovers at around 3.6%, while in Karlín it is approximately 3.2%. Limited supply is also evident in Smíchov, Pankrác and Brumlovka, where top-quality office space remains in high demand over the long term.

Renegotiations dominate the market

On the demand side, the structure of demand is more telling than the volume itself. Renegotiations accounted for approximately 70% of gross realized demand. This should be interpreted not as a sign of market weakness, but as a reflection of an environment in which tenants have few alternatives to moving: supply is limited, high-quality new construction is largely pre-leased or not yet completed, and relocation costs remain high. Tenants are therefore staying in their current spaces, optimizing their floor space, and in many cases securing their position in advance of the expected wave of new supply after 2027.

The most active tenants were technology companies, which accounted for more than one-third of realized demand. Companies from the pharmaceutical and healthcare sectors also made up a significant share.

Rents continue to rise

The highest achievable rent in downtown Prague remained stable at 30 euros per square meter per month. In the broader downtown area, however, rents continued to rise to between 21.5 and 22.5 euros per square meter per month, mainly due to strong demand in Karlín, Smíchov, Pankrác and Brumlovka. Rents in the city’s outlying areas also rose slightly.

Pricing plans for upcoming projects are even more ambitious. Offices scheduled for completion in 2027 and 2028 are already being offered at more than 35 euros per square meter per month in the city center and at 23 to 28 euros in the wider city center. These prices primarily reflect rising construction costs, land prices and developers’ expectations that the supply of high-quality office space will remain limited in the coming years.

Urban planning paves the way for new construction

Another significant event in the second quarter was the approval of Prague’s new Urban Planning Document, which will take effect on 1 September 2026. This is the first comprehensive land-use plan for the Czech capital since 1999 and one of the most important regulatory milestones for the Prague real estate market in the last decade.

“The new plan brings greater predictability to development planning, clearer rules for land use and better conditions for the development of brownfields and large-scale mixed-use projects combining offices, housing, retail and public infrastructure. It is precisely these projects that will significantly shape the Prague office market in the coming years,” Josef Stanko concludes.