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Industrial

The Czech industrial real estate market in the second quarter of 2021: Decisions need to be taken quickly, and a back-up plan needs to be in place

A lack of materials and an increase in the price of construction work is troubling the industrial real estate market in the Czech Republic. Industrial space in desirable locations is in short supply. Occupancy rates in Prague and the close surroundings are rising and vacancy rates have almost reached zero. Tenants are well aware of the situation and it has become more common for them to extend their lease contracts for longer periods.

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Industrial

Industrial premises for lease in the greater Prague region almost exhausted. Vacancy rate falls to all-time low of 0.55 %

The first quarter of 2021 saw record low vacancies in the greater Prague region, affirming consistent high interest in industrial premises in premium locations. High demand is pushing lease prices upwards, with lease prices having grown by 25 % per sq m year-on-year within the Prague cadastral district, for example. The Czech industrial real estate market is being impeded by drawn-out approval processes and a lack of new options in areas with the greatest demand.

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Industrial

Rent contracts for industrial premises are being extended. This is due to strong demand

In the commercial real estate market, there is currently a shortage of industrial and logistics premises, as well as land suitable for their construction. This is mainly due to growing demand, and the fact that local governments aren’t motivated by tax benefits to construct them. The situation is most evident in the vicinity of large cities, and also affects the growth of rent levels. Moreover, it has also caused a new trend in the form of the extension of rent contracts. The first new projects of over 20,000 sq m can only be expected in the second half of 2022.

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