PRICING
The cost of renting a desk in a coworking space in Prague has remained largely stable over the past year, with CBD locations naturally being the most expensive
The majority of coworking hubs and flexible office centres in Prague kept their prices unchanged over the last 12 months. Yet, there are some rare exceptions where prices, especially for monthly unlimited 24/7 use of a hot desk or fixed desk, have risen by as much as 20%. The pace at which the flexible workplace sector in Prague is growing, combined with current demand and occupancy levels, does not yet indicate that increasing competition will lead to aggressive incentives or discounts being offered by the providers in an effort to drive up occupancy levels.
The wide gap between the lowest and highest prices reflects the diversity of locations, as wlel as scope of services and overall comfort levels of individual hubs. Prices for coworking and shared offices in Prague 1 (CBD) are naturally higher than those outside the city’s traditional central business district, taking into account higher costs (i.e. rents for traditional offices). Some operators offer full-service, all-inclusive premises including consumption of drinks, access to various events, workshops and fitness classes, while there are others who offer just a workplace without many or any extras.
The average monthly cost per employee in a traditional grade A office located within the Prague CBD comes to around 8,000 - 9,500 CZK. This includes the share on office rent (including meeting rooms), utilities and other fees associated with leasing the space, but excludes initial set-up costs spent on furniture, coffee / tea consumption and other smaller expenditures.
At these prices, the monthly costs of a hot desk or fixed (dedicated) desk in a larger coworking centre is still relatively cheap and, in most cases, comes with added benefits such as free access to events, yoga classes, and higher comfort levels provided by larger space with a number of different seating options. The use of meeting rooms in many coworking hubs is charged extra, but at the same time the premises provide more free options where one can hold an informal meeting.
It is impossible to say whether traditional office space is more expensive than coworking space, as this will be different for every company. Although coworking works out cheaper per person, each company is unique in the way it utilizes space (and what standard of space it demands), uses amenities and most importantly, the number of employees it has. Therefore the turning point at which coworking becomes less economical than traditional office may be at three people, 20 or anywhere between.
COMINGS & GOINGS
Even in a growth market there will always be those players that fall behind, decide to join forces or even exit altogether – and Prague’s growing flexible office space market is proving to be no exception.
Most coworking operators interviewed for this survey believe there will be some consolidation as major international players and other new entrants appear in the market, leaving smaller independent players forced to seek partners to survive. The first stirrings of this process could be seen in August 2018 when Hub Ventures Group, the owner of the Impact Hub coworking centres, announced the acquisition of a majority 55% stake in the K10 coworking centre based in Prague 2.
To forestall this consolidation, there is a growing specialisation in the market as players try to carve out niches to differentiate themselves. HubHub, which has two locations in Prague, has a particular focus on tech start-ups with less than 20 employees; Business Link sees the start-up end of the market as already quite crowded so focuses on more established companies; and Impact Hub has always had a strong social business element to it.
Though none of the bigger Prague providers of coworking or flexible offices have yet to suffer the fate of Impact Hub’s New York centre, which closed its doors at the end of 2018, new entrants continue to arrive, putting pressure on existing players. WeWork’s arrival was the biggest shadow over the Prague market in 2019, but we have yet to see any major shake-out in this segment of the city’s real estate market.