Office markets in the Central and Eastern Europe’s six largest cities—Prague, Warsaw, Budapest, Bucharest, Bratislava and Sofia—are entering a new phase of transformation. While demand for high-quality office space remains stable, record-low new construction has led to an unprecedentedly low supply. This is creating upward pressure on rents for modern and sustainable buildings while also increasing the need to modernize older office stock.

According to the latest Colliers CEE Offices 2026 Report, total office space in these six major cities in the region reached 22.1 million m² by the end of 2025. However, only slightly more than 200,000 m² of new office space was completed during the year, marking the lowest annual volume of completed space ever recorded in the region. In 2026, only approximately 300,000 m² of new office space is expected to be completed, which is significantly below the long-term average.

Plans at an All-Time Low

According to a Colliers report, limited development activity is one of the key factors shaping the current market. High construction costs, stricter zoning and building regulations, and rising financing costs have led developers across the region to significantly curtail speculative construction. New projects increasingly require the signing of binding preliminary lease agreements even before construction begins, with preference given to mixed-use properties and larger-scale projects.

“The office space market in Central and Eastern Europe is going through a structural change. The combination of limited new supply, higher construction costs and changing tenant expectations is creating a more selective market in which quality, sustainability and location have become increasingly important differentiators,” emphasizes Josef Stanko, director of market research at Colliers.

Renegotiations Driven by Circumstances

Across the region, renegotiations significantly outnumber new leases. In Prague, for example, renegotiations account for approximately 60 percent of all leasing activity. Companies often remain in their current spaces because there are few alternatives, moving costs have risen significantly, and uncertainty about future headcount persists. The logical consequence is the extension of lease terms, so that the Prague average now exceeds 7 years, and a similar shift toward longer leases has also occurred in Bratislava and Warsaw.

Tenants Are Looking for Quality

The average office vacancy rate in the region fell to approximately 10.5% by the end of 2025. Prague remains the tightest market: the vacancy rate there is below 6%. In contrast, Budapest has the highest vacancy rate at 12.5%; but even in that city, high-quality space in prime locations is scarce.

Premium rents continued to rise in all six capital cities. Rents range from approximately 16 euros per m² in Sofia to roughly 30 euros per m² in Prague, where asking rents for some new and planned projects are rising toward the 40-euro mark. In Prague’s wider center, high-quality, new office space commands rents of 23 to 25 euros, while older buildings in the same area remain around 18 euros.

One of the most notable trends highlighted in the report is the growing shortage of modern office space. Vacancy rates in high-quality, centrally located buildings are significantly lower than the overall averages for individual cities, while older properties find it increasingly difficult to compete.

At the same time, tenant demand has also shifted. The technology and outsourcing sectors, which were previously dominant, are no longer the main drivers of office demand in several markets. Financial and business services account for an increased share of leasing activity. These sectors target premium office spaces that can attract talent and enable modern ways of working and corporate branding.

The Aging Office Market

A separate chapter of the report addresses the growing challenge that aging office buildings pose for the region. Many properties completed during the first major development wave in the late 1990s and early 21st century are now close to 30 years old. This means they are unable to meet current technical, environmental and workplace standards.

According to estimates, more than 76 percent of office stock across Europe could be at risk of becoming obsolete by the end of the decade. However, the Central European region is in a relatively better position due to the younger average age of its buildings (an estimated 43 percent). 

Comprehensive renovation offers a suitable solution; while it involves high costs, the result is a significant increase in rent earnings, higher occupancy rates and greater property appeal.

An example of a successful renovation is Prague’s Danube House in Karlín. This comprehensive renovation featured a new facade, improved energy efficiency and sustainability elements  and helped raise rents from 16 to 17 euros to more than 24 euros per m². As a result, the building attracted two major tenants, Allegro and Everpure, who were willing to pay a premium for the higher quality even though it was not a brand-new building. Building B in Brumlovka, built in 1999 and completely modernized in 2020, followed a similar path. The result was full occupancy immediately upon completion.

Experience to date in Prague, Warsaw and Sofia shows that a comprehensive renovation can increase rent by 20 to nearly 50 percent, depending on the scope and location. For buildings in secondary locations, the calculation is more complex. If the surrounding area lacks amenities, transportation links and a critical mass of high-quality tenants, even a well-executed renovation may not generate sufficient demand. Furthermore, not all buildings will be suitable for renovation. In some locations, therefore, owners are considering alternative uses, including conversion into residential units, hotels and data centers.

A More Selective Market

Looking ahead, Colliers experts expect that the supply of office space in Central and Eastern Europe will remain limited, which will drive further rent growth and reduce the availability of premium office space. “The gap between buildings that meet tenants’ modern expectations and those that do not will continue to widen. The most successful landlords and investors will be those who actively adapt their assets and strategies to a market that increasingly values quality, flexibility and long-term sustainability,” adds Jana Vlková, Director of Workplace Advisory and Office Agency and partner at Colliers.

The full Exceeding Borders: Office 2026 report can be downloaded here