Logistics and production properties, which are currently under construction in the Czech Republic, reach a total volume of 1.034 million square meters. Without a pre-arranged tenant, 234,000 square meters are now being built, while the rest is already pre-arranged. According to Jakub Holec, director of 108 Agency, this year there may be a partial transformation of the industrial market, the acceleration of which may not be enough for some entities.
The vast majority of the 86,254 square meters of industrial space completed in the first quarter has been pre-leased or occupied for a long time in parallel with the approval. The total area of premium industrial areas thus exceeded 9.86 million square meters. There is considerable interest in warehouses and production halls with the completion date during this year. Despite the record volume of industrial real estate under construction, there is already a fear on the market of a lack of available space. The vacancy rate fell again to the current 1.51%. Excluding "shell and core" space, the vacancy rate is only 1.28%, according to an analysis by the 108 Agency. Currently, the most vacant industrial spaces are in the Plzeň Region, the Ústí Region and the Moravian-Silesian Region, while these vacant areas are concentrated in several industrial parks.
Gross demand reached 613,344 square meters in the first quarter, which is approximately the same value as in the previous quarter. Net demand then showed 311,953 square meters, which is about 120,000 square meters less than in the fourth quarter of 2021. Compared to the first quarter of last year, however, this is a similar result.
According to the aforementioned analysis of the extension and expansion of BJS Czech, the largest transaction in the first quarter was 46,000 square meters in CTPark Humpolec. The second largest was the extension of the lease agreement to 37,000 square meters of the Jusda Europe company in the CTPark Pardubice II complex. The third largest transaction was the pre-lease of 36,000 square meters by an unspecified manufacturing company in Panattoni Park Pilsen West II.
"Despite the slowdown in e-commerce growth and, of course, the effects of the war in Ukraine, we continue to register unprecedented interest in companies," says Michal Bílý, an analyst at 108 Agency, who said tenants must expect costs to rise. Average rents in premium industrial sites in the Czech Republic range from 4.50 to 5.70 euros per square meter per month. In the capital, prices even attack the limit of 8.00 euros per square meter, which was unthinkable two years ago. "In addition to the rent, service fees, including fees for maintenance and administration of the industrial area, are also starting to rise in price by at least 10%. Overall, the operating costs for companies have been growing most dynamically in the last three years, ”adds Robert Sgariboldi, Head of Industrial and Logistics Leasing at 108 Agency.
Other factors, the concurrence of which may lead to the transformation of the Czech industrial space market, include the rapid rise in prices of virtually all building inputs at the developer level. To this must be added high inflation. Developers in particular are responding to rising energy prices by increasing the use of renewable energy sources. At the same time, however, the departure of some tenants working with lower margins from premium locations cannot be ruled out. According to 108 Agency, however, owners and property managers are finding compensation very quickly, and these are usually companies in the field of e-commerce and city logistics.
The largest projects currently under construction include, for example, Panattoni Park Kojetín, Panattoni Park Cheb South, Contera Park Ostrava D1, GLP Park Ostrava Hrušov, VGP Park Olomouc and P3 Ostrava Central. The largest projects built speculatively include VGP Park Olomouc, Garbe Park Chomutov (visualization in the picture) and CTPark Brno Líšeň.
