Czech Republic to run out of basic building materials

26
Aug
2024
News - Czech Republic to run out of basic building materials #Czech Republic #Euroconstruct #report

by Property Forum | Report

The Czech Republic has been risking losing its self-sufficiency in producing stone and sand, according to the Euroconstruct report. These essential materials are becoming scarce because closed deposits are not replaced with newly opened ones. Obtaining permits for new ones is extremely complicated and none have been created for long.


There are still plenty of sand and stone deposits in the Czech Republic. However, obtaining a permit and opening a new quarry or sandpit can take up to 15 years. Miners face resistance from local municipalities and residents during the process. The property relationships concerning the land are also complicated. Not least, the outcome of environmental impact assessments is uncertain.

While new or reopened quarries are a rarity, several dozen have been closed over the last 30 years. Currently, there are around 200 functional stone quarries in the country. Up to half of the deposits currently being mined will be exhausted within 10 years.

The government aims to address the shortage primarily through recycling and reusing materials. However, builders encounter limitations in using recycled materials due to technical regulations from investors. The situation is the worst for stone needed for railway construction. With the planned construction of high-speed rail lines, the situation is undoubtedly heading towards a shortage of aggregates.

In addition, material deliveries are contracted in advance, which makes it difficult to implement large projects in the future. For example, with the completion of the Dukovany nuclear power plant, there is a risk that material will have to be imported from Austria or other foreign countries.

Already, the prices of stone and sand in the country are skyrocketing. In neighbouring Germany, the price of sand is half as much, and in Poland, the difference is even greater. The shortage and import of materials lead to an increase in the costs of projects. If project costs rise excessively, their implementation will be further postponed. Even without this, large strategic projects suffer from a strained state budget and lack of political will, which hinders their implementation.




New leases

  • UDH, one of Poland’s largest distributors of premium imported beers, has leased approximately 1,400 sq m of modern warehouse and office space at the Park Rysy Kraków distribution centre. The tenant, which has chosen to expand its operations in southern Poland, was once again represented by AXI IMMO.
  • Golden Star Estate has secured a long-term lease agreement with global technology solutions and consulting provider C&F for nearly 1,900 sqm of office space at the Konstruktorska Business Center. Following the transaction, the property, located in Warsaw’s Mokotów business district, is now almost fully leased. The Polish branch of C&F will officially relocate to the facility at the beginning of 2027.
  • Natland Group has committed to its long-term presence at Prague-based Rohan Business Center through a lease extension covering 2,004 sqm of office space, together with storage facilities and dedicated parking spaces, in a deal brokered by iO Partners.

New appointments

  • Indotek Group has announced the appointment of Diederik Bakker as Group Chief Investment Officer and Group Head of Asset Management. In his new role, the Dutch real estate investment professional will gradually assume responsibility for the company's ITAM (investment, transaction, and asset management) activities across 12 European countries, supporting the next phase of Indotek Group’s growth. His focus includes facilitating sound investment decisions across Europe and developing a group-level portfolio management strategy that combines local market knowledge with international asset management know-how.
  • Peakside Capital Advisors has appointed Bogi Gabrovic to advise the board and support its investment and acquisition activities in Poland. Gabrovic brings more than 25 years of CEE real estate experience to the role, having previously held senior executive positions at CTP, Golub & Company, and White Star Real Estate, where she managed transactions exceeding €2 billion.
  • Katarína Brydone, Jana Vlková and Vendula Maršová have been appointed as the first Equity Partners of Colliers’ Czech business. Brydone brings more than 20 years of experience in international real estate. Vlková has more than 25 years of experience in commercial real estate. Maršová, Partner and Head of Valuation and Advisory Services, brings more than 16 years of experience in real estate valuation and advisory.

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