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Investment

Stricter protection of agricultural land will also significantly affect the industrial space market

The amendment to the Agricultural Land Fund Protection Act, which was approved by the Government last October and is expected to be adopted by the Chamber of Deputies in the first months of this year, will have a significant impact on the construction of production and warehouse properties in the Czech Republic. It will have an impact on the planning and construction of industrial sites, on land classified as Class I and II (according to the Bonitated Soil Ecological Unit, BPEJ). The amended law proposes a ban on the use of agricultural land of this quality for plans to build shops or warehouses larger than one hectare, as well as a ban on the use of these lands for conventional photovoltaic power plants.

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Offices

The Prague office market has frozen. The crisis will hit older buildings harder

High construction and relocation costs are behind the marginal movements on the Prague office market in recent months. Even if companies want to change their location, it is currently very difficult to secure a lease of around 5,000 sqm, especially in attractive locations such as Karlín, Anděl, Pankrác or Smíchov. Although buildings are gradually being completed (mostly pre-leased), which started to be realised at a time of cheaper bank financing, there is a noticeable lack of premium office space on the market. In fact, no new office buildings have started construction since spring 2022. These are the main outputs of the analysis of the office market development prepared by the Czech real estate consultancy 108 REAL ESTATE.

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Industrial

Warehouses around Prague among the priciest in Europe

Only Helsinki, Munich, Oslo, Hamburg, London and a few other cities in the UK and Ireland have industrial rents higher than Prague. Warehouses near Prague are costing tenants far more than in Paris, Rome, Madrid, Budapest or Warsaw. In the Czech capital the price per square metre is EUR 96 a year, with the most expensive city, London, coming in at EUR 313. Berlin is roughly on a par with Prague, while in Warsaw the highest reported rent in Q3 was EUR 52 per year. These are the findings of a joint study carried out by the Czech real estate consultancy 108 REAL ESTATE and BNP Paribas Real Estate.

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108 News

108 REAL ESTATE investment team prepares for expansion under the leadership of Michal Divis

The investment team of the Czech real estate and consulting company 108 REAL ESTATE will undergo consolidation and strengthening of the team and competences. This will be done under the direction of its new head, Michal Diviš. Michal, who has been investing with 108 since 2017, specializes in land development, land transactions, investment purchases and sales, mainly in the industrial real estate segment. With his promotion from the position of Senior Associate, the efficiency of the entire team will be improved, and thus the quality of the investment department's services will be enhanced. Michal will lead the land and transaction team, while the capital markets area will remain under the direction of the company's CEO, Jakub Holc.

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Industrial

Pace of warehouse occupancy take-up slows down amid growing concerns over automotive industry

Numerous newly constructed storage facilities built without confirmed tenants have experienced extended vacancies lasting for six months or longer. This phenomenon, unheard of for years in the Czech Republic, has even led to a slight dip in average rents in some regions. After factoring in the lengthening rent-free periods, rising vacancy rate, and a growing trend towards subletting, everything points to the third quarter confirming a slowdown in momentum on the domestic industrial property market. This is the finding of an analysis conducted on indicative data by the Czech real estate and consulting company 108 REAL ESTATE. In the reporting period from July to September, gross demand totalled 158,867 sq m, with net demand at a mere 122,186 sq m. This record low quarterly result is the worst in at least four years.

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Industrial

Poland is a hit among developers, tenants and investors of industrial space. Still catching up with the Czech Republic

Compared to the Czech Republic, it is four times larger in terms of area and approximately in terms of population. In recent months, it has set an example in many areas of the economy, including the construction, leasing and subsequent sale of industrial space. The supply of commercial real estate is also growing, thanks to massive investment in transport infrastructure and increasing purchasing power. This is most evident in the logistics and manufacturing segment, which has expanded by nearly 2.5 million sqm so far this year to a total of more than 31 million sqm.

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Industrial

Developers plan to build almost 7 million m2 of industrial property. Including on brownfield sites

What do the Karlovy Vary, South Bohemia, Liberec and Ústí nad Labem regions have in common from the perspective of industrial property developers? This is by no means the weakest that construction supply and building activity has been in a long time. Quite the opposite. An analysis by real estate consultancy 108 AGENCY indicates that these four regions – relative to their current capacities – are expected to see the largest increase in new warehouse and manufacturing space in the next few years. Altogether, the consultants have identified development projects in the Czech Republic with a floor area of more than 6.8 million m2, which are in various permit and preparation stages – environmental impact assessment, zoning/building permits, or initial building work. Three developers account for 54% of the planned projects: CTP, Panattoni and Prologis.

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Czech logistics and manufacturing are increasingly running on solar power

Developers, tenants and owners of industrial and warehouse space in the Czech Republic are currently investing heavily in their own solar power plants. This trend reflects not only the progressive modernisation of the energy sector, but also the gradual move away from dependence on fossil fuels. Within this wave of innovation, we are also seeing extensive technological modifications being carried out in parallel on many buildings, aiming at an overall cut in energy consumption. One of the largest rooftop solar power plants to date is at the Urbanity Campus Tachov industrial park, with a reported installed capacity of 5 MW and an approximate annual production of more than 5,000 MWh of electricity.

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Industrial

Industrial property market shaped by shorter supply chains and lower carbon footprint

Manufacturing companies are commanding a growing share of industrial property leases in the Czech Republic. In doing so, they are steadily displacing demand from logistics companies and tenants engaged in retail, especially e-commerce. In the second quarter of this year, lettings to manufacturers accounted for 60% of the 266,443 sq m newly leased. When lease renewals are factored in, lettings totalling 567,445 sq m were closed in the second quarter, up 50% on the previous quarter. These figures come from a fresh analysis by 108 AGENCY, one of the leading real estate consultancies for industrial property leases and sales.

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