The Czech Industrial Research Forum (CBRE, Colliers, Cushman & Wakefield and iO Partners) announced Industrial Market Figures for Q3 2024. Commenting on the findings, Miroslav Kotek, Head of Industrial Agency at Colliers said, “Despite the large amount of space under construction, the vacancy rate in the Czech industrial real estate market remains low compared to neighbouring countries and despite the increase in the volume of speculative construction, new vacancies are only slowly coming onto the market. The strategy of landlords is still to preserve new buildings at an advanced stage of construction while waiting for new clients’ interest. This year can also be seen in a large cooling of realized demand caused by prolonged client decision-making processes and global uncertainty. With prices slowly falling in the Czech market and a lack of available space to accelerate the price decline, many clients are considering cheaper alternatives in neighbouring markets,”
TOTAL STOCK & NEW SUPPLY
The modern, developer-led warehouse stock in the Czech Republic reached almost 12.2 million sqm in the third quarter of 2024. Approximately 163,500 sqm were delivered to the market within 9 industrial parks across the country. This represents an 11% decrease compared to the same period last year and an increase of 64% quarter-on-quarter. At the time of completion, approximately 76% of the projects were already pre-leased.
The largest completion in Q3 2024 was a new building in CTPark Blučina (52,600 sqm), which was at the time of completion fully leased to an electronics producer Inventec. The second-largest completed project was a building in Panattoni Park Kladno South (21,000 sqm), which was fully leased to an automotive producer Hanon Systems. The third largest completed project was in P3 Lovosice park (16,800 sqm), which was not leased at the time of writing.
PROJECTS UNDER CONSTRUCTION
At the end of Q3 2024, approximately 1,045,000 sqm of industrial space was under construction in the Czech Republic, representing an increase of 5% compared to the previous quarter and a decrease of 26% compared to the same period last year. Almost 33% of the total space under construction is situated in the Karlovy Vary region, followed by Prague and Central Bohemia region with a 19% share and Moravia-Silesia region with a 17% share.
The share of speculative space under construction increased to 36%. At the same time, developers commenced new construction of 204,900 sq m of modern industrial space in Q3 2024, with 53% of this space speculative.
INDUSTRIAL TAKE-UP
During Q3 2024, gross take-up, including renegotiations, reached 335,100 sqm. This represents a decrease of 28% compared to the previous quarter and a significant 61% increase compared to Q3 2023. The share of renegotiations decreased by 4 percentage points compared to the last quarter, accounting for the second-largest share of gross take-up (37%).
Net take-up in Q3 2024 totalled 203,100 sq m, showing a decrease of 35% quarter-on-quarter and an increase of 35% year-on-year. Pre-leases accounted for the largest share of the gross total, reaching 49%.
The three largest transactions of Q3 2024 were pre-leases. ThermoFisher Scientific pre-leased 54,000 sqm in DMC Park Brno followed by a pre-lease of 39,500 sqm by an undisclosed automotive producer in CTPark Žatec. The third largest transaction was 29,300 sqm by an undisclosed distribution company in CTPark Blatnice.
VACANCY
At the end of Q3 2024, the vacancy rate in the Czech Republic reached 3.1%, representing an increase of 33 basis points quarter-on-quarter. Compared to Q3 2023, the vacancy rate increased by 169 bps. A total of 377,900 sqm of modern industrial premises is available for immediate occupation. This is the highest volume of vacant space on the market in 5 years. The vacancy in modern industrial space in Prague and Central Bohemia is lower than the national rate, reaching 2.2% at the end of Q3 2024.
RENT
Prime headline rents stayed stable at around €7.00 – €7.50 sqm/month in the Czech Republic in Q3 2024. Selected prime locations outside Prague remained stable, achieving around €5.70-6.60 sqm/month. Rents for in-built office space stand between €9.50 – €12.50 sqm/month. Service charges are typically around €0.75–1.00 sqm/month.
