The market has not fundamentally or significantly changed. Landlords owning either large spaces or spaces located in convenient and popular locations are aware of their value, and for now have not moved to lower their prices. In the period before the lockdown, there was a trend of increased interest in shared office space. With restrictions limiting personal contact and the other measures that coronavirus has brought with it, this interest has been decreasing and has momentarily almost reached zero. The owners of these properties are trying to keep their tenants, and for now clients have not been terminating their contracts… but such spaces are already being abandoned by renters in the West, and we cannot rule out that this trend will soon be mirrored on the Czech market as well.
Clients often ask about current rental prices, and they are also interested on the impact coronavirus is having on the Prague real estate market in general. Quite often, clients are reaching out to us to prepare a market estimate of their property; in particular, owners of retail units who have long had the same tenant, and whose contracts are approaching their termination dates, are considering selling.
The greatest changes are now being seen in the case of retail units; relatively fundamental changes affecting the whole of Prague. Some landlords have given their tenants a significant discount, or even did not even charge them rent during the lockdown period in which their shops were were closed to help them through their difficult situation. Other owners were not so lenient, and in some cases tenants have been forced to terminate their operations. Another phenomenon that I have noted lately is the tendency of owners to double-check whether pre-coronavirus rental prices are still fair, and to seek advice on whether it would be appropriate to give tenants a discount. This tells us that owners are not entirely sure whether their current tenants will continue to be able to afford their rent, and that it is possible that they will soon need to look for new ones.
In the course of 2020, I expect companies to move from larger premises to smaller ones, which will also lead to a wave of retail units becoming available on the market. The future of so-called coworking spaces in Prague, however, remains unclear at this point.
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