"Over the past two years, in 2024 and 2025, only three of the twenty largest office transactions in Prague were genuine relocations and new lease agreements. Rather than moving, companies are increasingly opting to renew their existing leases, as the availability of high-quality office space has become extremely limited," says Pavel Novák, Head of Office Agency at Savills.

In 2025, only 26,600 sq m of new office space was completed in Prague, the lowest annual volume in the market's history. A slight increase to 36,700 sq m is expected in 2026. By comparison, during periods of strong market growth, Prague typically delivered between 150,000 and 200,000 sq m of new office space annually. As a result, the market is reaching a point where new supply is consistently insufficient to meet the long-term demand for modern office space.

"Rental levels are no longer the primary indicator or the biggest obstacle when companies consider relocating. Today, the much more significant issue is the cost of moving and fitting out office space. Given the scale of these investments, the economics of a relocation generally only make sense when committing to a long-term lease, for example eight to ten years. However, making such a commitment is often challenging for companies from a strategic planning perspective. As a result, we are seeing significantly longer decision-making processes and extended transaction timelines," adds Pavel Novák.

Vacancy rates in prime office buildings across Prague's key business districts have now fallen below 5%. A total of 16 office buildings, comprising 312,900 sq m, are currently under construction. However, six of these projects, representing 54% of the total pipeline by floor area, are owner-occupied schemes, meaning they are being developed for the companies' own use and will remain under their ownership. The most notable examples include the new headquarters of ČEZ, Erste Group, and the Creditas Group. Of the remaining office developments currently under construction and intended for the leasing market, approximately 108,800 sq m of office space remains available. However, the majority of this space is not expected to be delivered until 2028.

Prime rents exceed historical highs
New prime office developments in central Prague are now targeting rental levels exceeding €33 per sq m per month. In selected cases, lease negotiations are already taking place at levels of €35 per sq m per month and above. This growth is being driven by a combination of elevated development and construction costs, alongside constrained supply of high-quality office space.

Higher rents, however, do not necessarily translate into higher overall office occupancy costs. Modern office buildings enable more efficient space utilisation through improved layouts, higher workplace density, and advanced technologies.

Ageing office stock represents another risk
More than 30% of Prague's office stock consists of buildings over 20 years old. At the same time, the pace of market renewal remains extremely limited. Currently, only seven refurbishment projects are in the pipeline compared with 43 new developments.

According to Savills, this is creating what can be described as a "challenged secondary market" – buildings with outdated technologies, high energy consumption, and inevitable future capital expenditure requirements for refurbishment and modernization.

"To stabilise the market, it will be essential to accelerate permitting processes, revive the development of modern office projects, particularly in sought-after locations, and provide greater support for the refurbishment of older buildings. Without new supply and the modernization of the existing stock, Prague faces the risk of further rental growth and a gradual loss of competitiveness compared with neighbouring capital cities," concludes Pavel Novák.