Total office space stock in these four cities stands at over 11.5 million sqm, highlighting their importance as key business locations.
According to Cushman & Wakefield’s review of the office markets in the capital cities of Central Europe, Warsaw boasted the largest total office stock of more than four million sqm as at the end of June 2013 and this is followed by Budapest in second position with over 3,164,000 sqm. Prague’s total office stock is expected to top three million sqm by mid-2014 while Bratislava currently has a built stock of 1,466,000 sqm. New supply in the Central European region reached 197,700 sqm in H1 2013.
Office space under construction at the end of June 2013 equates to over 845,000 sqm across Central Europe, with Warsaw accounting for almost 448,000 sqm and Prague for 291,400 sqm. The largest office complex to be delivered by the end of 2013 will be the Miasteczko Orange in Warsaw, providing 44,000 sqm of new space.
According to Cushman & Wakefield H1 2013 leasing volumes in the four Central European capitals totalled nearly 692,000 sqm. This is up on both the first and second halves of 2012 (CE take-up in H1 2012 was 625,900 sqm). This highlights rising interest from occupiers who are looking to establish a foothold in the region.
The largest new occupation in Central Europe in H1 2013 was the leasing of 13,000 sqm in the Ochota Office Park in Warsaw by a public entity.
Prime rents in the Central Business Districts of the four Central European capital cities remain stable, with the exception of Warsaw where they fell slightly and currently stand at €25.50/sqm/month. In Prague and Budapest prime space in the top prestigious locations can achieve rents of €21/sqm/month, with Bratislava lower at €15/sqm/month. Rents are at an attractive level when compared with the €112/sqm/month commanded in London’s West End (the world’s most expensive office market, according to C&W’s Office Space Across the World 2013 report).
The CE vacancy rate of 14.1 percent in H1 2013 is above the five-year average due mainly to increases in Warsaw and Bratislava in the past few quarters. In addition the vacancy rate is forecast to rise further across the region as new speculative space completes and excess supply is released back to the market. The vacancy rate is the highest in Budapest at 19.9 percent, albeit has been gradually decreasing from Q2 2012 when it was at 21.3 percent. Warsaw has the lowest vacancy at 10.5 percent.
Investment activity in the core Central European markets of Poland, Czech Republic, Slovakia, and Hungary saw €1,72 billion invested in H1 2013. Investors preference for the office sector continued, attracting 62.5 percent of the total volume across the same period. (source: europaproperty.com)