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Industrial

The area utilised for industrial and warehouse space in the Czech Republic exceeds 10 million sq m in June

Moving into June, industrial premises in the Czech Republic will exceed the magical limit of 10 million square meters of leasable space. According to 108 AGENCY, the real estate consulting company, it is highly probable that, by the beginning of 2023, almost one million sq m of production and warehouse halls will be added to this total. The positive news is that the regeneration of brownfields and the modernisation of older industrial buildings and areas are taking up an ever-increasing share of the offer. At the same time, 108 AGENCY consultants observe the trend of building low-energy buildings with an emphasis on an environmentally friendly approach. This is generally combined with other renewable energy installations.

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Industrial

Warehouses availability will not improve. Developers are slowing down construction due to rising costs

Logistics and production halls currently under construction in the Czech Republic have reach the dizzying volume of 1,034 million sq m. Nevertheless, there is already a risk that there will be a shortage of warehouses in particular. Only 234,000 sq m are now being built which don't have a pre-signed tenant, while the rest are already pre-arranged. Many developers, who speculatively began construction of halls, have slowed down production or postponed planned projects due to the rising prices of building materials, lack of capacity of supply companies and a sharp increase in energy costs. Due to the constant demand, there is the potential for continued rent growth. In the first quarter of this year, it exceeded an average of €5/sq m/month, even outside the attractive locations around Prague and Brno.

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108 News

We defended our victory at the HOF Awards!

For the fourth time in a row, our real estate consulting company received an award at the prestigious HOF Awards in the Best Industrial/Warehouse Real Estate Agency category. However, we have expanded our territorial reach: in addition to our leadership in Central and Eastern Europe (CEE), we have also triumphed in South-Eastern Europe (SEE). The award and our thanks thus belong to the Prague headquarters, as well as to our teams in Hungary and Slovakia.

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Investment

Real estate investment in the Czech Republic is the strongest in the past five years

More than €900 million worth of property changed hands in the Czech Republic from January to the end of March this year. This is the strongest first quarter since 2017, excluding Q1 2020 exceptional residential Residomo portfolio sale. According to the analysis by 108 AGENCY, the real estate consulting company domestic buyers dominated by volume followed by Slovak capital. Major transactions included Bořislavka Centre in Prague 6, the IGY shopping centre in České Budějovice and the City Park Jihlava.

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Industrial

Demand for warehouses in the Czech Republic is breaking records. Developers are responding with extensive construction

Clients' interested in new industrial premises in the Czech Republic had very little to choose from last year. Thanks to record demand, which reached a record 2.39 million sq m in gross terms for the whole year, vacancy rates fell to 1.63%, a historic low. The result was also affected by a lower volume of completed industrial properties, mainly due to the impact of anti-pandemic measures. However, this changed at the end of the year when a record 800,000 sq m of industrial space was under construction. The urgent need to meet tenants' enormous demand is also evidenced by the fact that the share of speculative development has once again increased after a longer period of inactivity.

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Investment

Czech Industrial Property Market Third Quarter: Streamlining operations gives companies crucial competitive advantage

The rising prices of construction materials and energy, the increasing cost of land for new construction, a lack of crucial components to ensure continuous production and workforce shortages are all afflicting the industrial sector in the Czech Republic. One solution in regard to the availability of industrial real estate would seem to be the optimising of operations and more frequent investment by many companies into the automation of routine activities.

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