Prague,
20
August
2018
|
16:30
Europe/Amsterdam

Strong demand for industrial space continues in Czech Republic

CBRE, a global leader in real estate services, released its latest industrial rental space market quarterly report. Vacancy rates remain very low below 4 % and more than half of space currently under construction is already pre-leased. Net demand is driven mainly by manufacturing companies.

Czech market of industrial commercial space faced strong demand also in second quarter of this year, as is illustrated by very low vacancy rate, which remains below 4 % since mid-2017, currently at 3,7 %. Quarterly leases or take-up reached 220 thousand square meters, a 14,3 % increase over previous quarter. Overall market activity in Q1 and Q2 combined went up 15 % year-on-year.

Bert Hesselink, Head of  Industrial & Logistics CBRE
In Q2 2018, almost half of the large industrial space demand, 44 % to be exact, was generated by manufacturing companies, despite record-low unemployment rates. Czech Republic remains an attractive manufacturing base, as the difference between local and German salaries in manufacturing has not changed significantly since 2008. Many companies also use transfer of production facilities as an opportunity to increase automation levels and replace human labour with machines.
Bert Hesselink, Head of Industrial & Logistics CBRE

While some 170 thousand square meters of space was added in Q2, new supply grew 20 % slower compared to Q1 (there is a total of 7,4 million square meters of industrial space in Czech Republic). There is a shortage of large facilities offering over 10 thousand square meters – currently there are only 7 in Czechia. Most space under construction finds its tenant before completion, as pre-lease is currently at 60 %. This fact has been confirmed by the largest transaction closed in Q2, which also falls into this category: pre-lease deal on 24 700 square meters made by Europe Huajie Development (tenant) and Panattoni Prague Airport II.

Other details on Czech industrial space market in 2Q2018 are available in an info-graphic published by CBRE (see link).