Regulatory issues and labour shortage are the biggest threats

From a Western European perspective, the Czech Republic scores really well among its CEE counterparts based on most figures, said Bert Hesselink MRICS, Head of Industrial & Logistics and Senior Director at CBRE. Unfortunately, however, he believes that Czech people can be too conservative when it comes to doing business. Polish people are better at selling their country which can affect companies’ decisions on location, he added.

Bartosz Mierzwiak, Managing Director for CEE at Logicor believes that there is reason to be optimistic about the future of regional markets. The fundamentals are not getting weaker, the potential is here, the future of Europe is happening here, so developers should come together and promote Central Europe, he said. 

 

 

Members of the panel agreed that regulatory issues pose a serious threat to the growth of the Czech industrial market. According to Martin Polak, Senior Vice President and Regional Head for CEE at Prologis, it is actually becoming easier to get a client than to get a permit.

This unpredictability often costs business. Companies know that because of regulatory issues the building might not be ready in time and because of this they often chose Poland over the Czech Republic, added Bert Hesselink.

 

Tomáš Míček, Country Head for the Czech Republic at P3 Logistic Parks confirmed that developers get no support from the Czech government, the market is overregulated and new laws are not bringing much progress. In Western countries the biggest weight is put on zoning/master plans, in CEE more emphasis is put on how the building should look like, he added, reminding that the Czech Republic needs to improve its infrastructure as well. Better connections are needed to neighbouring countries. 

 

 

The speakers of the logistics panel at Prague Property Summit 2017 also agreed that labour shortage has become an issue in CEE. Companies that were driven to the region by its low labour costs will soon be forced to raise wages. Luckily, the quality of the workforce will make up for this decline in competitiveness. Companies got used to cheap labour, but it’s not the only thing that should attract them, Bartosz Mierzwiak added.

According to Bert Hesselink, those who complain about the lack of labour pay really low salaries. He believes that more and more business will go to the Eastern part of CEE because labour is cheaper there. 

 

Developments are happening in places with no labour and developers need to keep that in mind when they decide on new locations, commented Ferdinand Hlobil.

 

 

It is mostly the automotive sector, e-commerce and standard retail that keep expanding in CEE. Production is still shifting eastwards which poses a great opportunity for the industrial market, said Bert Hesselink.

 

According to Ferdinand Hlobil, International Partner and Head of Industrial in CEE at Cushman & Wakefield, digitalisation has brought on a huge revolution in the field of industrial property and tenants need to adapt to current changes.   

Developments will go on as long as there’s demand from tenants, commented Jaroslav Kaizr MRICS, Business Director at CTP. He believes that buildings need to be ready to supply not only one purpose, that’s why CTP is developing multi-purpose buildings. He thinks that the future of industrial/logistics buildings is in larger clear heights, that is the key to better productivity. Commenting on why CTP is so careful in its expansion in Poland he cited that CTP wants to bring its own clients to the Polish market rather than entering it as just another competitor to existing players.