INDUSTRIAL PROPERTY MARKET Q2/2021

Increased industrial market activity influences all aspects of tenants decision making process. Factors such as record gross take-up in first half of the year, continuing rise of prices of construction materials, lengthening of handout process and completion of the building and extremely low vacancy of industrial premises for lease is shifting the market to more and more competitive environment among tenants. Swift and decisive decision making is becoming more and more crucial to successful launch of operation. Even though developers responded to this situation with major increase in premises currently in construction, the prime markets such as Prague and Brno still have very limited supply of new options for tenants.

In the second quarter of the 2021 the total stock of industrial premises for lease reached 9,332,118 sq m. 549,446 sq m were in construction and 71,748 sq m delivered to the market. Based on all the known announcements by developers the total stock of “A” class premises for lease could in future surpass 15.6 mil. sq m. Most of this potential is concetrated in Pilsen region, Usti region and Central Bohemian region. More and more we are seeing growing differences between regions in terms of prices, options, supply and demand.

Vacancy reached its all time low with only 2.72 % of premises available with shell and core premises included. This represents 254,105 sq m across the entire Czech Republic. New premises currently in construction are mostly not being constructed speculatively so it's expected that this shortage of available space will last for some time. Without shell and core premises the vacancy reached only 2.01 % and Greater Prague region reached only 0.04 %.