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News Release

Prague

IT companies are expanding in Prague

Prague office market awaits the largest move in its history. IT companies and business service centres are expanding and a lot of these firms are changing their seats in Prague. 


Prague, 27 April 2016 – Vans moving IT companies and business service centres will cross Prague more than often this year. Firms from this sector (IT and business service centres) were the most active tenants on the Prague market last year, having signed lease contracts for 84,000 sqm and reaching 31 % of net take-up. Among others there was concluded the largest leasing transaction represented by an agent (JLL) in the history of Prague´s office market - SAP, who leased nearly 25,000 sqm in Metronom office building in Prague 5. SAP will move its 2,000 employees working for three operations under one roof. Significant leases from IT companies on the Prague market included: Avast Software (15,000 sqm in Enterprise Office Center), Microsoft (11,500 sqm in BB Centrum building Delta) and Oracle (10,400 sqm in Waltrovka building Aviatica). As far as IT leasing deals are concerned, this year seems to be promising as well. CSC Computer Sciences leased 9,400 sqm in Enterprise Office Center and further IT companies/business service centres are looking for new space. Prague is – according to the „2015 Tholons 100 Outsourcing Destinations“ – one of the best European locations for establishing business service centres.   


The largest leasing transactions of IT companies/business service centres in Prague 2014 – 2016
2016 CSC Computer Science 9,400 sqm Prague 4 / Enterprise Office Center
2015 SAP 25,000 sqm Prague 5 / Metronom
 Avast Software 15,000 sqm Prague 4 / Enterprise Office Center
 Microsoft  11,500 sqm Prague 4 / BB Centrum Delta
 Oracle 10,400 sqm  Prague 5 / Aviatica
 ICZ 7,000 sqm Prague 4 / Kavčí Hory Office Park
 STRV 5,600 sqm Prague 8 / River Garden II and III
2014 HP 18,000 sqm Prague 4 / BB Centrum Delta
 MSD Global IT Centre 6,200 sqm Prague 5 / Riverview
 Amazon 6,000 sqm Prague 6 / Blox
Source: JLL, April 2016

 

„According to our experience, companies tend to move after 10 – 12 years on average. After this time they naturally outgrow their current premises, they usually need modern and larger office space. Last year, tenants (not only IT companies) capitalized on the market situation, when developers delivered a lot of new office space to the market. If we were able to find offices in better quality and for similar or reasonably higher rent, we were nearly always given the green light (permission) to go ahead and negotiate a new lease contract. Most of the above mentioned IT companies signed leases in higher quality office buildings,“ says Petr Kareš, Head of Tenant Representation at JLL Czech Republic. 

 

„The IT companies mentioned above put a lot of time and effort in their new offices. The relocation was not just a pure move of their current office (usually) closer to the city centre, but they have invested into a higher quality of their offices and the overall layout of the interior. The aim was to meet the expectations of their young employees (generation Y, Millennials) and at the same time use the opportunities that the digital (r)evolution brings to the maximum,” says Kevin Turpin, Head of Research for CEE at JLL, and adds: “for example, Microsoft Czech Republic immersed itself for months into workplace strategy preparations and has come up with several truly innovative solutions. The video from our visit to the new Microsoft offices, which is part of our Offices of the Future project, can be seen on our website www.officefinder.cz.”     

 

According to the annual report on the Sector of Shared Service Centres in the Czech Republic in 2016, which was prepared by the Association of Business Leaders Service in cooperation – among others – with JLL, there are currently over 180 business service centres in the Czech Republic. Out of this total, nearly half of the centres (48 %) are located in Prague, 22 % in Brno and 21 % in Ostrava. This sector employed 50,000 people in 2013, two years later 65,000 people (30 % increase) and there is estimated further grow up to 100,000 people by 2020. There used to be shared or business service centres providing mainly centralized business operations services or outsourcing of financial and accounting services, now they provide a wide scope of business services starting with IT, across HR, marketing, clients services to research and development.   


„The requirements put on potential employees of IT companies and business service centres are relatively high. They are expected to have an university degree in a relevant subject (be it programming, accounting, HR etc.), speak foreign languages (fluency in English plus a further language on a professional level) and should be open to further professional education (advanced reporting, business analyses, customer service etc.). On the other hand, there is the new generation Y coming to the labour market which have got different expectations regarding their job or careers (how, when and under what conditions to work). The exhausting workload, which could be for example 10-12 hours for five, six or seven days a week, is not the ideal anymore. Generation Y values interesting and meaningful work which also enables satisfactory social and family life. An innovative working environment combined with flexible working hours help to attract these talents and provide employees with the expected work-life balance. Therefore, companies that comply with this current trend will have the biggest chance both to attract and retain this talent,“ concludes Eduard Forejt, Business Development Direct at JLL Czech Republic.     


Our new project Offices of the Future:
JLL, in cooperation with its key clients on the Czech office market and Economia publishing house, have prepared a series of videos about the way business leaders are adopting changes in the working environment brought about by the digital revolution and upcoming generational changes. The traditional ideas of office space with fixed workstations for every employee and closed meeting rooms seem to be history. There is new video every week (till summerbreak) on our www.officefinder.cz. Currently our experts presents following offices: Microsoft, Cisco, Passerinvest and Skanska.