Prague and Brno Face Shortfall in Industrial Space Supply

Savills has analysed the development of demand and availability of modern industrial space across the Czech Republic. The intensive construction of warehouse and production facilities for lease continued into the first quarter of 2025. However, supply remains insufficient in certain key markets, particularly in Prague and Brno. To a lesser extent, a similar imbalance is also observed in Vysočina and larger cities in South Bohemia. While this opens opportunities for new industrial projects, it is important to ensure that all input costs (especially land prices) do not lead to excessively high rental rates that tenants in specific locations may not be willing to accept.

“There is vacant space available on the market, but much of it is located in less desirable areas, either with limited labour availability, complicated access for freight transport, or offered at rental rates that do not align with tenants’ budgets,” says Lenka Pechová, Senior Research Analyst at Savills.

According to Savills, the most sought-after location continues to be the southern edge of Prague along the D1 highway, where, however, opportunities for new development in this area are largely exhausted. “The vacancy rate in Prague has remained below 3 percent since mid-2020. In the city’s southern outskirts, available units appear only rarely and are typically leased even before the previous tenant moves out. We are seeing a similar situation now, with units expected to become physically available in 2027 but likely to secure new tenants within this year,” adds Lenka Pechová.

The opposite situation can be observed in the Moravian-Silesian, Olomouc, and Plzeň regions, where supply currently exceeds demand, resulting in more competitive rental conditions. “In the Moravian-Silesian region, the availability of large land plots has enabled a wave of speculative developments in recent years, reacting to increased demand during the pandemic. In the Plzeň region, along the D5 highway, new developments have coincided with several older units returning to the market after previous tenants moved out,” explains Ondřej Míček, Head of Industrial Agency at Savills.