Storage premises in the Czech Republic: growth in the total area leased by on-line retailers
On-line retailers operating in the Czech Republic require increasingly large storage premises
On-line retailers have been operating in increasingly large storage premises in the Czech Republic. In the second quarter, three of the five largest transactions on the industrial real estate market were attributed to well-established on-line retailers in Bohemia – Internet Mall (Mall.cz), Alza.cz and Internet Shop (Parfums.cz). Over the last three years, on-line retailers have leased more than 70,000 sq m of storage premises in the Czech Republic and interest in such premises has been growing. This trend mirrors the situation in Western Europe where the average share of total lease transactions executed by on-line retailers amounted to 15 - 20 % in the last three years.
The Czech Republic offers more than 4,600,000 sq m of modern storage premises. The share of total lease transactions made by on-line retailers has been growing. In the first half of 2014, occupation increased to 23% compared to the whole of 2013. There are two main factors behind the increased requirement for storage premises for on-line retailers in the Czech Republic. Firstly, the increasing popularity of e-shopping among Czech consumers and secondly, foreign on-line retailers are now leasing storage premises in the Czech Republic. Although these on-line retailers do not supply the Czech market with their products, they take advantage of the geographical position of the Czech Republic in accompaniment with lower operating costs to serve and supply Western markets. This is the case of Amazon.com and of the German on-line supermarket Allyouneed.com, which have leased, with the assistance of CBRE, over 10,000 sq m of storage premises in one of the largest logistic parks in the Czech Republic, CTPark Bor. These storage premises will serve the German market, with an on-line supermarket that is already extending its operation to other European countries.
“On-line retailers have leased more than 70,000 sq m of storage premises in the last three years in the Czech Republic. We have seen a significant increase in the share in the total lease transactions. Just in the second quarter, the demand of on-line retailers amounted to 32% of the total demand satisfied, apart from renegotiations. These figures do not include the Amazon transaction in Prague West,” says Michal Bezděka, Head of Industrial Agency, CBRE.