INDUSTRIAL PROPERTY MARKET Q1/2022

Deepening differences between countries that lead to trade wars and most recently to true war, have caused a lot of chaos on many markets. Everything from food to precious metals to construction materials gets more and more expensive and harder to obtain. Export and import processeses get more difficult. True resilience of European and Czech industrial market will be tested throughout the year 2022. In Q1 the Czech industrial market performed great, continuing its last year's fantastic success. Energy crisis is on the horizon however and it will be important to lower operating costs in order to maintain a competitive advantage. For example by utilization of high efficiency solar panels and other modern technologies.

• In Q1/2022 stock of “A” class industrial premises for lease reached 9,864,518 sq m. 86,254 sq m of new premises were delivered to the market. With current project pipeline we expect that the 10 mil. mark will be reached somewhere between Q2 and Q3 of 2022.

• There are currently 1,034,346 sq m under construction. Speculative construction is slowing down however as a result of great uncertainty on the construction materials market.

• The vacancy rate dropped to a historical low of 1.51 % with only 148,674 sq m available on the market. If we do not count shell and core premises the vacancy rate dropped to only 1.28 %! In comparison to last few quarters, there is significantly less available space in the Moravian-Silesian Region.

• The war between Russia and Ukraine will in future influence food production which will be reflected in prices of all other commodities. The conflict threatens global wheat supply, because Russia and Ukraine are among the largest producers in the world. This will further indirectly influence already high inflation rate in the Czech Republic.