Prague Office Market enters a new cycle as supply constraints strengthen occupier and investor confidence
The Prague office market entered 2025 with exceptionally limited new supply, reinforcing tightening market conditions. Only 26,600 sqm of office space was completed during the year, marking the lowest annual delivery ever recorded. Despite construction activity reaching its highest level since 2019, more than 60% of the 263,300 sqm currently under construction is already pre-leased or owner-occupied, suggesting that future supply will remain constrained.
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Occupier demand remained resilient throughout the year. Gross leasing activity reached 573,200 sqm, exceeding the five-year average by 8%, with renegotiations accounting for nearly half of total demand. Net take-up totalled 317,800 sqm in 2025, only marginally below the previous year. Demand was concentrated primarily in Prague 5 and Prague 4, driven mainly by manufacturing, pharmaceutical and medical occupiers, while overall net absorption remained positive.
Limited new supply and steady demand continued to push vacancy lower. By the end of Q4 2025, the overall vacancy rate declined to 5.9%, down 1.3 percentage points year-on-year. Class A and Class B buildings recorded similar vacancy levels, underlining the broad-based tightening of the market. With only modest deliveries expected in the next two years, further downward pressure on vacancy is anticipated, particularly in core office locations.
Prime rents remained stable in Q4 2025, with headline rents in the city centre holding at €30.00 per sqm per month. However, as new pipeline projects in established locations increasingly target premium positioning, upward pressure on prime rents is expected. Investment activity remained strong, with office transactions reaching €540 million in 2025, supported by stabilising yields around 5.25%. Overall, market fundamentals are increasingly shifting in favour of landlords as supply constraints persist.
Head of Office Agency
Head of Research
