Rental of industrial space in the Czech Republic reached a three-year high in the third quarter - interest of manufacturing companies helps

Net demand for industrial space in the Czech Republic reached a three-year high in the third quarter of this year. Gross realised demand reached 577,395 sqm from July to the end of September. The share of new leases was unprecedented, amounting to 446,399 sqm in the period under review. According to real estate consultancy 108 REAL ESTATE, manufacturing companies leased a similar volume of premium industrial space as logistics: 163,449 sqm vs 177,570 sqm. Another new phenomenon is the achievement of a rent threshold of EUR 9 to 10 per sqm per month for selected urban logistics projects.

"Taking all three of these metrics into account, the Czech industrial space market cannot be viewed as anything but positive. Despite negative news regarding the reality and outlook for the German economy, led by the automotive industry, demand for domestic warehouse and manufacturing space is growing. This is great news - the volume of contracts signed increased by 250,000 sqm compared to the second quarter." Jakub Holec, CEO of 108 REAL ESTATE, comments on the new results.

According to his team's data analysis, the highest number of leases were executed in the Central Bohemia Region, Ostrava Region and Karlovy Vary Region. However, Prague and its closest surroundings ranked first in the number of lease transactions, where the highest achieved rent of EUR 10 was recorded. However, as in the previous quarter, the highest rent level is on average lower, around EUR 8/m2/month. The average monthly rent then fell to EUR 5.81/m2 at the national level.

According to data from 108 REAL ESTATE, the latest measurement period showed increasing regional differences - in the level of rents achieved, in the intensity of construction and, of course, in demand. The most striking indicator is the vacancy rate, which reaches 12.94% in the Moravian-Silesian region, 9.56% in the Pilsen region and 8.81% in the Karlovy Vary region, which has long suffered from weaker tenant interest. The national average vacancy rate at the end of September was 8.69%, including shell and core space, and 5.57% in fully completed buildings.

The encouraging third quarter results are likely to be reflected in increased developer activity. They have recently announced a number of new construction projects, which demonstrates their confidence in the upward trend of the domestic economy. "Since the beginning of the year, we have seen significant interest from retail occupiers - including global brands and shippers looking for new central warehouses across Europe. The Czech Republic is also helped by the fact that real wages are finally starting to rise and therefore so is end consumer spending," says Matěj Indra, Head of Industrial Agency at 108 REAL ESTATE.

During the third quarter, 246,431 sqm of new warehouse and production space was completed. Among the largest completed buildings is EQT Exeter Ostrava II with more than 80,000 sqm of modern space. Given the optimistic development, it can be expected that a significant part of the 1,362,011 sqm of industrial space currently under construction will be completed and put on the market in the coming months.

The development in the period under review from July to the end of September shows considerable flexibility on the part of developers and landlords in general. Pressure on incentives is evident, as are increasing demands for shorter lease lengths from tenants. This is countered by a growing demand for quality space with higher technological standards. These can be EUR 1 to 1.5 per sqm per month more expensive than a conventional warehouse or manufacturing in the same location.

"Behind this trend we see a growing concern for employees, as similar properties usually also offer facilities for nurseries, doctors and other services. At the same time, these innovative industrial buildings have some of the green certifications, working with renewable resources, clean energy and an overall healthy environment. These are important points for ESG rating, which is closely monitored by banks. And they are prepared to offer better terms, more affordable loans and other incentives to such clients," explains the development Michal Bílý, Head of Research 108 REAL ESTATE.

Also in view of the increasing share of such high-quality industrial buildings, the 108 REAL ESTATE team came up with a modification of the classification of industrial real estate in the spring of this year. A new methodology has been introduced, which reflects in particular the developments of recent years in the field of environmentally friendly energy solutions and BREEAM certification. As a result of this change, some projects have been reclassified to the lower B standard, reducing the total area of premium A standard space.

The total area of premium industrial space for lease in the Czech Republic has already reached 12.29 million sqm at the end of Q3 2025. Including shell and core space, the total area is 12.82 million sqm. At the end of the third quarter, the largest amount of shell and core space was located in the Pilsen Region with 129 thousand sqm, followed by the Central Bohemian Region with 114 thousand sqm and the Ústí nad Labem Region with 69 thousand sqm. The Central Bohemian Region has already almost reached 4 million sqm of modern industrial space when including these projects in an advanced stage of construction.