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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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Industrial

Industrial real estate rent prices to increase in some locations by up to 10 % in 2021

The fourth quarter of 2020 closed a year full of changes and upcoming trends, also reflected within industrial real estate. Despite the pandemic, the industrial segment proved stable, and there was a significant acceleration in the development of e-commerce, and specifically the digitalisation of the entire retail sector. There remains a high demand for premises on the market from investors and clients, and this interest puts pressure on prices, which will increase significantly at premium locations in 2021.

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Industrial

Logistics service boom

Interest in outsourcing logistics services is growing in the industrial real estate market. Primarily due to flexibility, customers no longer have to make a long-term commitment, and they can adapt the scope of the storage and related services to their current needs. In today’s dynamic times, this is proving to be an interesting competitive advantage. As a response to this trend, 108 AGENCY established a new division which is exclusively responsible for the brokering of logistics services.

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Industrial

The Czech industrial real estate market in Q3/2020: the 9 million sq m mark was exceeded in modern industrial premises during the pandemic

The pandemic, and the measures relating to it, had only a limited effect on the industrial real estate rental market, in particular with regard to the importance of the logistics sector, supply chains and production for the end consumer. In the third quarter, developers and tenants were catching up with the impact of the lockdown, and the situation in the fourth quarter will tell us more about business models in the coming year.

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Industrial

108 AGENCY participated in a unique survey which reveals both trends and problems in Czech logistics and warehousing

The survey was realised by the SKLAD (Association of Competent Logistics Providers and Suppliers) association in collaboration with the Ipsos research agency. The result is an extensive study which maps the trends shaping the logistics market in the Czech Republic. 123 managers operating in retail and wholesale company logistics, e-commerce, the automotive industry and manufacturing also took part in its creation.

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