Czech Republic Czech industrial rents hold steady

The modern, developer-led warehouse stock in the Czech Republic reached almost 12.2 million sqm. Approximately 163,500 sqm were delivered to the market within nine industrial parks across the country. This represents an 11 pct decrease compared to the same period last year and an increase of 64 pct quarter-on-quarter. At the time of completion, approximately 76 pct 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).

At the end of Q3 2024, about 1,045,000 sqm of industrial space was under construction in the Czech Republic, representing an increase of 5 pct compared to the previous quarter and a decrease of 26 pct compared to the same period last year. Almost 33 pct of the total space under construction is situated in the Karlovy Vary region, followed by Prague & Central Bohemia region with a 19 pct share and Moravia-Silesia region with a 17 pct share. The share of speculative space under construction increased to 36 pct. At the same time, developers commenced new construction of 204,900 sqm of modern industrial space in Q3 2024, with 53 pct of this space speculative.

During Q3 2024, gross take-up, including renegotiations, reached 335,100 sqm. This represents a decrease of 28 pct compared to the previous quarter and a significant 61 pct increase compared to Q3 2023. The share of renegotiations decreased by 4 pp. compared to the last quarter, accounting for the second largest share of gross take-up (37 pct). Net take-up in Q3 2024 totalled 203,100 sqm, showing a decrease of 35 pct quarter-on-quarter and an increase of 35 pct year-on-year. Pre-leases accounted for the largest share of gross total, reaching 49 pct.

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. Third largest transaction was 29,300 sqm by an undisclosed distribution company in CTPark Blatnice.

At the end of Q3 2024, the vacancy rate in the Czech Republic reached 3.1 pct, 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 five years. The vacancy in modern industrial space in Prague & Central Bohemia is lower than the national rate, reaching 2.2 pct at the end of Q3 2024.

Prime headline rents stayed stable at the level of around EUR 7,00-7,50 sqm/month in the Czech Republic in Q3 2024. Selected prime locations outside of Prague remained stable, achieving around EUR 5,70-6,60 sqm/month. Rents for in-built office space stand between EUR 9,50-12,50 sqm/month. Service charges are typically around EUR 0,75–1,00 sqm/month.

The Industrial Research Forum was established in 2010 with its aim to provide clients with data about the Czech Republic industrial real estate market. The members of the Industrial Research Forum are CBRE, Colliers, Cushman & Wakefield and iO Partners.