"There are several reasons for structural changes in demand, including uncertainty regarding further economic developments and geopolitical changes. However, the most important factor is the end of the large-scale expansion of online retailers, who during the covid-19 pandemic demanded a record amount of logistics space in connection with the enormous increase in e-commerce. While online shopping will continue to grow, it will not return to that pace. Thanks to this, manufacturing companies will come to the fore this year," comments Jan Hřivnacký, head of industrial real estate leasing at CBRE.
In terms of leases "under one roof", the years 2021 and 2022 are considered to be record years. During that time, the two largest leases in domestic history were also signed, namely 233,700 m2 in Panattoni Park Cheb (year 2022, the tenant is a fashion clothing retailer) and 186,700 m2 in Panattoni Park Kojetín (year 2021, the tenant is the world's largest e-shop originating from the USA). CBRE was the intermediary in both cases. In addition, the lease of the German company Tchibo in Panattoni Park Cheb (year 2021) also exceeded the imaginary threshold of 100,000 m2.
"The results confirm Panattoni's strong position on the industrial development market in the Czech Republic. I am glad that we can build even the biggest and most demanding projects on the market and fulfill the needs and requirements of any clients who need a specific space for their business. If we look at the individual Panattoni Parks and their tenants, it also shows that we can attract really big global brands to the Czech Republic. A big role in this is played by the fact that the entire
the industrial development sector in the Czech Republic is very sustainable compared to the Central European region. Thanks to this, we are still an interesting location for investments by companies that have clearly defined goals in this area. Due to the low vacancy rate and limited construction possibilities, we expect a high demand for projects that are at least in an advanced permitting process in the coming years," comments Pavel Sovička, CEO of Panattoni for the Czech Republic and Slovakia. It built the four largest industrial and logistics buildings in the Czech Republic to date.
In any case, after a few years, the domestic market experienced a slowdown in demand last year, which corresponded with similar developments in other European countries. In 2023, demand fell by 36% year-on-year to 938,400 m2 of newly leased space, almost 70% of which was pre-leased. The average size of the newly leased area was 6,300 m2. Eleven leases exceeded 20,000 m2, but no new contracts were concluded for spaces larger than 60,000 m2.
Total rental activity, including renegotiations, reached 1.53 million square meters last year, which represents a 30% year-on-year decrease. The share of extended existing contracts increased to 42% compared to 35% in 2022. From this year, CBRE experts expect the demand for new premises to be at the level of 800,000 m2, which corresponds to the average of the last ten years before the pandemic.
"We are currently preparing offers mainly for clients with a focus on locations with good access to the German and Austrian markets, where there are both large final consumption markets and other supply chain networks. For large demands, the height of the building is a very important factor, which enables more efficient use of space and is also related to greater robotization of processes. As a result, we increasingly encounter requests requiring a higher net height of the hall than the standard 10 meters," explains Jan Hřivnacký.
Almost 922,000 m2 of new space was completed in 2023, the second best result in the history of tracking. 87% of these are already occupied, confirming the continued strength of demand. On the other hand, developers reacted to its slowdown with more limited construction in the following years. Currently, 980,000 m2 are being built and only 600,000 m2 are to be approved this year.
Also for that reason, the overall vacancy rate increased slightly at the end of the year. It still remains very low at 1.75%, but is up 55 basis points year-on-year. At the same time, a new phenomenon in the form of gray vacancy is creeping up on the market. These are objects in the shell-and-core state, i.e. spaces in the final phase of construction, which, however, are formally considered unfinished by the developers, until they find their tenants. Currently, it is more than 300,000 m2. In addition, the market is struggling with an increasing number of sublets. All of this together may contribute to an increase in the vacancy rate above the still low level of 3% this year.
Rents in premium spaces are currently around 7.55 euros per square meter per month, but large differences are evident between individual regions and between older and new construction. The highest rents can be achieved especially with renegotiations in premium locations. For new leases, CBRE experts expect increased pressure on rents.
"In terms of industrial and logistics real estate as an investment asset, last year they held up despite high inflation from all commercial segments
