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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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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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Industrial

The industrial real estate market continues to strengthen – but it’s undergoing a major transformation

On one hand there is 1 million sq m of new warehouses this year alone, but on the other hand demand is decreasing. The length of leases required by developers’ increases to a minimum of five years versus the departure of some tenants from the e-commerce and automotive sector. Securing extensive leases and pre-leases by large logistics companies versus the need to sublet part of these premises. The growing importance of energy-efficient buildings and the emphasis on the lowest possible operating costs. The results of the third quarter on the domestic industrial real estate market show that the transformation of this entire segment has already begun, according to the recent report published by the real estate consulting company, 108 AGENCY.

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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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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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Industrial

The Czech industrial real estate market in the second quarter of 2021: Decisions need to be taken quickly, and a back-up plan needs to be in place

A lack of materials and an increase in the price of construction work is troubling the industrial real estate market in the Czech Republic. Industrial space in desirable locations is in short supply. Occupancy rates in Prague and the close surroundings are rising and vacancy rates have almost reached zero. Tenants are well aware of the situation and it has become more common for them to extend their lease contracts for longer periods.

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