CBRE: We expect record-breaking demand for industrial real estate
Historically high values
CBRE, the world leader in the commercial real estate sector, anticipates a record-breaking demand for industrial real estate in the Czech Republic, with demand possibly reaching historically high values in 2014.
The demand for industrial real estate could reach historic levels in 2014. According to, CBRE, the real estate consultancy, take-up (excluding renegotiations) for industrial real estate could exceed the demand from 2008, reaching 800,000 sq. m. The third and fourth quarters tend to be stronger than the first half. Take-up has already reached 475,500 sq. m. and CBRE expects several big transactions to be signed in the fourth quarter.
“The high demand for industrial real estate is a consequence of several trends. Operations and warehouse processes have been transferred to our region on a long-term basis due to the less expensive labour and the proximity to Western markets. Another driver is e-commerce, which is a trend that started to be visible in the past three years and resulted in a sharp growth in demand on the part of Internet dealers in 2014,” says Michal Bezděka, Head of Industrial Agency at CBRE, confirming the growth in the demand for industrial real estate.
“The automotive industry has been a stable source of the demand. In addition, automotive companies such as Škoda or Hyundai are currently preparing the launch of new models on the market, which stimulates the demand of the suppliers for new production spaces in the vicinity of the plants in Kvasiny and Nošovice located in the Ostrava and the Hradec Králové regions,” says Bezděka, adding that the expansion of well-proven companies such as Červa and VF Corporation has a significant impact on the volume of demand.
Until 2010, the demand was predominantly driven by logistic and distribution companies that leased warehouse spaces in Prague. However, the situation dramatically changed in 2010 and 70% of the demand started to be driven by the regions, mainly Plzeň, Brno and Ostrava; but even in this respect CBRE expects that the situation will change. “The scissors are closing again. While the demand in the regions has been under the five-year average for the last two years, we have been witnessing growth in Prague,” says Bezděka, explaining that by the end of the year the shares of Prague and the regions could be equal in terms of their levels of take-up.
Chart: Net take-up development