Premium office space is becoming harder to find across Czech regional cities, driving up rents and creating challenges for growing companies, according to new data from the Regional Research Forum. While Brno is maintaining market balance with active development, other cities are struggling with limited availability of modern office space.
“Companies in regional cities are facing an increasing challenge in finding quality office space,” says Pavel Novák, head of office agency at Savills. “We see demand for premium offices across the regions – besides Brno and Ostrava, cities such as Plzeň, Olomouc, Hradec Králové, Pardubice, and České Budějovice are also coming to the forefront.”
It’s a contrast to Prague, which is experiencing a strong recovery with record transaction volumes and falling vacancy rates. And yet, there’s limited new development in Prague, while speculative construction continues in Brno, indicating confidence in future demand. What’s true almost everywhere is that quality office space is increasingly difficult to find.
In Brno, where vacancy rate holds steady at 12.7%, developers completed just one new office building in the second half of 2024. About 21,700 sqm of additional space is expected in 2025, with eight projects currently under construction.
The situation in Ostrava highlights regional challenges. Vacancy has fallen to 11.6%, but 70% of its office buildings are over a decade old. The Regional Research Forum writes that no new buildings were completed there in the latter half of 2024, and none are under construction. The space crunch is particularly acute in mid-sized cities like Liberec, where modern office inventory remains very limited, pushing rental prices higher even in smaller markets.
io Partners head of Office Agency Milan Kilik worries these trends could be the beginning of an unwelcome cycle for regional cities. “The absence of pressure for new construction slows down the development of modern offices meeting ESG standards, making the regions less competitive compared to Prague.”
