A sharp decrease in speculative development across the Czech Republic may lead to the lack of new modern office space in two years' time, says international property services firm DTZ. As a result of the deepening global financial crisis, developers are no longer building on such a speculative basis, a report released by DTZ shows. The broker points out that developers have today a lower chance of obtaining project financing for office development which do not already have a significant part of the space pre-leased.
A sharp decrease in speculative development across the Czech Republic may lead to the lack of new modern office space in two years' time, says international property services firm DTZ. As a result of the deepening global financial crisis, developers are no longer building on such a speculative basis, a report released by DTZ shows. The broker points out that developers have today a lower chance of obtaining project financing for office development which do not already have a significant part of the space pre-leased.
'We are thus entering a period in which tenants should consider their relocation or expansion plans much further in advance,' explains Václav Boucek, specialist on tenant representation services at DTZ in Prague, adding that DTZ is currently serving companies such as Vodafone and RWE in the search for new space.
To find a suitable work environment and achieve operational savings, tenants must begin planning their relocation two or three years in advance due to the falling number of speculative projects. DTZ expects the lack of space to drive office rents upward starting from the second half of 2010.
In the Czech Republic, Siemens reached an agreement in mid-2008 to lease 24,000 m2 in the Západní Mesto project of developer Finep, which should be completed by the end of 2010. DTZ is currently looking for appropriate facilities for Vodafone, which requires 15,000 - 17,000 m2 of space ready to move in to by the end of 2011.
