CZECH REPUBLIC Czech industrial space and sites dry up

This has mainly been due to the growing demand and the fact that local authorities haven’t been provided with the tax incentives needed to construct them. The situation is most evident in the vicinity of large cities and is also influencing the growth of rent levels. Prices per sqm could increase by up to 10 pct in Prague and Brno.

We are still dealing with a lack of land suitable for industrial development. Locations that were not previously considered lucrative are becoming desirable to investors. In Ostředek, for example, a location on the D1 motorway 35 km from Prague, ten new halls are planned with a total area of over 119,000 sqm. We are sure that they will find tenants over the coming two years. In key locations, rental prices already range around EUR 5 per sqm/month, and we anticipate that this will continue to increase.
Jakub Holec, the CEO of 108 Agency

In addition to this, the situation is also driving a new trend in the form of lease extensions. Over the last six months, 108 Agency has represented clients during the revision and amendment of rent contracts in more than ten transactions covering a leasable area of more than 85,000 sqm. The first new projects of over 20,000 sqm are, however, only expected in H2 2022.

The total area of modern industrial premises in the Czech Republic reached 9.19 mln sqm at the end of last year. Of this, more than 3.28 mln sqm is in the greater Prague area. In Q4 2020, 83,451 sqm of premium industrial premises was completed, while for the while year the total came to 609,302 sqm – the second highest figure in the last decade. With companies’ greater interest in new or larger premises, vacancy rates across the country fell during Q4 2020 to 4.94 pct (3 pct in the Moravian Silesian Region and West Bohemia, and less than 2 pct in Prague and Brno).