INDUSTRIAL PROPERTY MARKET Q4/2021

As vacancy rate dropped again, it reached a record value, which suggests problems for many companies that will need vacant industrial space in the first half of 2022. However we expect that rising speculative construction should partially help solve this issue in the second half of 2022. Strong demand from tenants is expected to continue throughout the year which underlines a need for swift approval and implementation of the new building act. Without a smoother approval process, it will not be possible to meet demand given current situation. Even though current legislation makes everything harder, developers are doing their best, so that their clients can continue in their grow.

• Stock of “A” class industrial premises for lease reached 9,780,667 sq m and with current project pipeline we expect that 10 mil. mark will be reached in Q2/2022. 142,130 sq m were delivered to the market. Q4 performed the best in the total amount of completed premises, but overall year 2021 underperforms in comparison to 2020.

• There are currently 803,087 sq m in construction. With each quarter the pipeline of projects currently in construcion rises as supply is trying to meet demand. Largest project currently in construction is Panattoni park Kojetín for Amazon.

• Vacancy rate dropped to a historical low of 1.63 % with only 159,415 sq m available on the market. Almost two thirds are in the Moravian-Silesian region. If we do not count shell and core premises vacancy rate dropped to only 0.7 %!

• Rising rents, almost no available premises and increased competitive business environment amplified by pandemic and subsequent fight for customers combined with ongoing lack of employees are defining current industrial business climate in the Czech Republic.