"Overall, it can be said that the wave of massive arrivals of new companies to the Czech Republic ended approximately eight years ago. These were mainly large corporations that set up shared service centers here. The vast majority of them continue to function successfully and often add additional services, and expansion is associated with this. But this is often solved within the existing premises," said Radka Novak, head of the office space rental team at Cushman & Wakefield.
According to Jana Vlková from Colliers, many international companies entered the Czech market 25 years ago, and large leases were primarily based on this demand. In recent years, however, this difference is disappearing and the ratio of domestic and foreign companies is equalizing. Cushman & Wakefield data show that 72 percent of administrative spaces over 3,000 square meters are occupied by international companies and 28 percent by Czech companies. Nine of the ten largest tenants are multinational companies.
Last year, the biggest transaction in Prague was the renegotiation of Microsoft's lease agreement in Brumlovka. However, one of the largest new leases was secured, for example, by the Czech e-commerce service provider Shoptet. According to data from the real estate consulting company Prague Research Forum, one of the most significant transactions is the renewal of the current lease of Avast Software in Prague 4.
New offices in Prague have not been built for almost two years
New office construction has not started in the capital for 18 months in a row. According to Penta Real Estate CEO Petar Palička, the lack of modern offices on the market is one of the reasons that prevents large foreign companies from coming to the capital.
Even so, according to Pavle Novák, head of the office department at Savills, Prague is still attractive for foreign investors. This is confirmed, for example, by the decision of one unnamed global company, which ultimately preferred the Czech capital over Warsaw, he said. However, the metropolis still needs to do more to improve the conditions for construction and development in order to maintain its attractiveness, according to the expert.
The Czech Republic had the opportunity to attract large foreign companies to the domestic market, for example, after Brexit. In 2017, the Ministry of Industry and Trade was given the task of selecting companies that might be interested in moving their headquarters to the Czech Republic. However, data from consulting firm Bisnode from 2019 showed that five percent fewer British companies did business in the Czech Republic than in the previous year. Most companies from Britain moved to the Netherlands.
