Press Release |Regional Research Forum Presents H1 2019 Brno and Ostrava Office Market Data

Press Release 

Prague, August 2, 2019  

Introduction 

The members of Regional Research Forum – CBRE, Colliers International, Cushman & Wakefield, JLL, Knight Frank – aim to provide clients with consistent, accurate and transparent data about the regional office markets in the Czech Republic. The members share non-sensitive information and believe that the Regional Research Forum will contribute to the improvement of transparency on the regional Czech office markets.  

The Regional Research forum is pleased to announce the Brno Office Market figures for H1 2019.  

Brno Office Supply/Stock 

Total modern office stock in Brno reached 597,600 sq m in the first half of 2019. A-class properties represented 83% of the modern stock and B-class properties represented the remaining 17%. 

There were three new office buildings completed in Brno in the first half of 2019: Vlněna office park AB (19,100 sq m), Vlněna office park – Bochner palace (1,500 sq m), and Svatopetrska C (3,000 sq m). Currently, there is 84,100 sq m of office space under construction in nine projects of which approximately 20,000 sq m is expected to be completed by the end of 2019. 

Brno Office Take-up 

In H1 2019, gross take-up (including renegotiations) reached 26,300 sq m, which represents 96% increase in comparison with the previous half a year and a year-on-year decrease of 48%. 

The biggest transaction of the first half of 2019 was the renegotiation of IBM Česká republika in Technologický Park Brno B, C (6,000 sq m) followed by the new lease of Asseco Central Europe in Šumavská Towers B (1,900 sq m).  

Vacancy 

A total of 69,600 sq m of modern office space was vacant at the end of H1 2019. The vacancy rate increased to 11.7%, representing an increase of 2.1 percentage points compared to H2 2018. 

Rents 

In H1 2019, prime headline rents in the Brno office market increased to 15.00 – 15.50 EUR/ sq m/ month. 

The Regional Research forum is pleased to announce the Ostrava Office Market figures for H1 2019.  

Ostrava Office Supply/Stock 

Modern office stock in Ostrava stood at 218,300 sq m in the first half of 2019. A-class properties represented 74% of the modern stock and B class properties represented the remaining 26%. 

In H1 2019, two new office building were completed in Ostrava, SIC Skelet – A (4,400 sq m) and SIC Skelet – B (2,000 sq m). Currently, there is one office building being refurbished with planned completion in 2020: Trimex Office Centrum (1,500 sq m). 

Ostrava Office Take-up 

In H1 2019, gross take-up (including renegotiations) reached 2,100 sq m, representing a year-on-year decrease by 69% and also a decrease by 70% compared to H2 2018. 

Vacancy 

A total of 23,900 sq m of modern office space was vacant at the end of H1 2019. The vacancy rate increased to 10.9%, representing an increase of 1.7 percentage points compared to H2 2018. 

Rents 

In H1 2019, prime headline rents in the Ostrava office market stood at 11.50 – 12.00 EUR/ sq m/ month. 

Definitions 

Stock:  Total completed office space (occupied and vacant), newly built since 1992 or refurbished, A and B class offices, owner occupied and for lease. Public authorities’ buildings and buildings with leasable area lower than 800 sq m are excluded. 

New supply: Completed newly built or refurbished buildings that obtained a use permit in the given period. 

A-Class Office Building:  To earn the A-Class status a building must meet at least 6 out of 7 “Hard Criteria” and 5 out of 7 “Soft Criteria.” 

B-Class Office Building:  To earn the B-Class a building must meet at least 2 out of 7 “Hard Criteria” and 4 out of 7 “Soft Criteria.” 

Take-up:  A gross figure representing the total floor space known to have been let or pre-let, sold or pre-sold to tenants or owner-occupiers over a specified period of time. It does not include space that is under offer. A property is taken up when the contract is signed. Total take-up includes renegotiations, lease extension and subleases, net take-up excludes these. 

Pre-lease:  Active pre-leasing for an office building begins as soon as preliminary design drawings are ready to show to prospective tenants. Pre-leasing occurs until the start of construction. 

Vacancy rate:  Ratio of physically vacant space in completed buildings on the total stock. 

Prime rent:  Achieved rents that relate to new prime, high specification units in prime locations.