The modern, developer-led warehouse stock in the Czech Republic reached almost 12.2 million sqm in the third quarter of 2024. Approximately 163,500 sqm were delivered to the market within 9 industrial parks across the country. This represents an 11% decrease compared to the same period last year and an increase of 64% quarter-on-quarter, reports Industrial Research Forum in its Industrial Market Figures for Q3 2024.
At the end of Q3 2024, approximately 1,045,000 sqm of industrial space was under construction in the Czech Republic, representing an increase of 5% compared to the previous quarter and a decrease of 26% compared to the same period last year. Almost 33% of the total space under construction is situated in the Karlovy Vary region, followed by Prague & Central Bohemia region with a 19% share and Moravia-Silesia region with a 17% share.
At the time of completion, approximately 76% of the projects were already pre-leased. The share of speculative space under construction increased to 36%. At the same time, developers commenced new construction of 204,900 sqm of modern industrial space in Q3 2024, with 53% of this space speculative.
The largest completion in Q3 2024 was a new building in CTPark Blučina (52,600 sqm), which was fully leased to an electronics producer Inventec at completion. The second-largest completed project was a building in Panattoni Park Kladno South (21,000 sqm), fully leased to an automotive producer Hanon Systems. The third largest completed project was in P3 Lovosice Park (16,800 sqm), which was not leased at the time of writing.
During Q3 2024, gross take-up, including renegotiations, reached 335,100 sqm. This represents a decrease of 28% compared to the previous quarter and a 61% increase compared to Q3 2023. Net take-up in Q3 2024 totalled 203,100 sqm, showing a decrease of 35% quarter-on-quarter and an increase of 35% year-on-year. Pre-leases accounted for the largest share of the gross total, reaching 49%.
The three largest transactions of Q3 2024 were pre-leases. ThermoFisher Scientific pre-leased 54,000 sqm in DMC Park Brno followed by a pre-lease of 39,500 sqm by an undisclosed automotive producer in CTPark Žatec. The third largest transaction was 29,300 sqm by an undisclosed distribution company in CTPark Blatnice.
At the end of Q3 2024, the vacancy rate in the Czech Republic reached 3.1%. A total of 377,900 sqm of modern industrial premises is available for immediate occupation. This is the highest volume of vacant space on the market in 5 years. The vacancy in modern industrial space in Prague & Central Bohemia is lower than the national rate, reaching 2.2% at the end of Q3 2024.
Prime headline rents stayed stable at around €7.00 - €7.50 sqm/month. Selected prime locations outside Prague achieved around €5.70 - 6.60 sqm/month. Rents for in-built office space stand between €9.50 - €12.50 sqm/month. Service charges are typically around €0.75 – 1.00 sqm/month.
"Despite the large amount of space under construction, the vacancy rate in the Czech industrial real estate market remains low compared to neighbouring countries and despite the increase in the volume of speculative construction, new vacancies are only slowly coming onto the market. The strategy of landlords is still to preserve new buildings at an advanced stage of construction while waiting for new clients' interest. This year can also be seen in a large cooling of realised demand caused by prolonged client decision-making processes and global uncertainty. With prices slowly falling in the Czech market and a lack of available space to accelerate the price decline, many clients are considering cheaper alternatives in neighbouring markets," summarises Miroslav Kotek, Head of Industrial Agency at Colliers International, the situation on the market.
