Brno to see stronger growth
The second largest city in the Czech Republic saw only a modest increase in the supply of modern office space in 2024. Due to a slowdown in construction activity, the total market size grew by only 1% year-on-year to 699,300 m². The vacancy rate decreased by 14 basis points year-on-year to 12.7%, representing approximately 88,500 m² of immediately available space. Of the total available space, 51% is located in the Brno Střed district, which represents 53% of the local office market, and 19% in the Královo pole district.
In absolute terms, the modern office market in Brno grew by 8,600 m² in 2024, thanks to a single project – building I in the CTP Vlněna complex south of the city center. This architecturally impressive project was approximately one-third occupied at the time of completion. “The volume of new offices last year was significantly below the five-year average of almost 22,000 m²,” explains Josef Stanko, Head of Market Research at Colliers, adding that the coming years promise an average to above-average volume of new construction.
At the end of the year, 78,000 m² of modern offices were under construction in eight projects. The Titanium X (also known as Skylight X) building is scheduled for completion in 2025, offering approximately 10,900 m² and located just a few minutes south of the city center. The Cerit Science Park III project will also be completed, expanding the office area around the Šumavská Center in the Královo Pole district by another 10,800 m². Two buildings D4 and D2/D3 called Montowna will be built in the Nová Zbrojovka area, with a total area of 24,500 m². Another major project will be the A4 building, which will expand the Ponávka area by 16 800 m².
The good news for tenants is that rent growth in Brno lags behind the Prague office market. “At the end of the fourth quarter of 2024, rents for premium office space in a modern design were around EUR 17.00 per m² per month. This benchmark may start to increase, as some new projects are more expensive due to rising construction costs," says Josef Stanko.
Ostrava attracts with affordable prices
Even Ostrava, the third largest office market in the Czech Republic, did not see a significant increase in new office space in 2024. Nevertheless, it is becoming an attractive alternative for investors looking for high-quality, but more affordable space outside the capital.
"The construction of modern office buildings has been subdued in recent years, with the exception of a few projects. The average completed area per year over the past 5 years is 5,800 m², but in these 5 years we have witnessed the completion of only five projects," comments Josef Stanko.
At the end of the second half of 2024, the Ostrava office market reached a size of 250,300 m². A positive signal and evidence of interest in Ostrava is the decrease in the vacancy rate to 11.6%, which represents a year-on-year decrease of 430 basis points. In absolute terms, 29,000 m² of vacant space was available in the whole of Ostrava at the end of 2024. A significant 83% of vacant space is located in the main office location in Moravská Ostrava and Přívoz, where 79% of the local office market is concentrated.
“Investors and tenants will certainly be pleased that a number of ambitious projects are planned in the city, which could expand the offer of office space in the coming years,” says Josef Stanko. For example, at the end of January 2025, the construction of the multifunctional Václav building by the Antracit development group began and will offer 3,000 m² of office space in early 2027. Significant potential for further development lies in the outdated buildings and brownfields scattered throughout the city, especially in the Moravská Ostrava and Přívoz urban districts.
One of the main competitive advantages of the Ostrava office market remains favorable rental prices. The benchmark value for the best (prime) rent is considered to be the range of 14.00 to 14.50 euros per m² per month, which is significantly lower than in Prague, because unlike Brno or Prague, there is no pressure to increase it due to expensive new construction.
The city is also developing a market for flexible offices, new operators are emerging and new centers are being created. For example, a major player is the business incubator BBiO, which offers an entire building with a total area of 6,700 m² as coworking with a flexible lease term under the Hygge brand. Scott.Weber Workspace has also entered the market, offering 4,600 m² in the recently completed Organica. IWG operates one center in Platan Office and plans to open another one in the near future, near Masaryk Square in the Laso shopping center. The Impact Hub center operates without changes and ClubCo recently expanded to include additional space within the IQ Tower.
Regional cities are gaining momentum
Other regional office markets also hold interesting potential. The volume of modern office space in regional cities ranges from 30,000 to 100,000 m², with Olomouc, Hradec Králové, Pardubice and Pilsen having the largest offer. Thanks to improving transport access
