Saturday, 15 March 2025
The Czech Republic’s industrial real estate market faced significant changes in the fourth quarter of 2024, with new supply dropping below the five-year average due to construction delays and developers postponing completion when pre-lease agreements were not secured. The Industrial Research Forum reported these findings while highlighting other key metrics that indicate a market undergoing transformation.
The total stock of modern industrial space reached nearly 12.3 million square meters in Q4 2024, with 106,700 square meters of new space delivered across four industrial parks. However, this represented a 63% year-on-year decrease and a 35% quarter-on-quarter drop in new supply. Notably, 100% of these projects were pre-leased before completion, underlining strong demand for ready-to-occupy spaces.
Speculative construction decreased for the first time since the start of 2024. Of the 978,300 square meters under construction at the end of the quarter, only 31% was being developed speculatively, a marked reduction compared to previous quarters. Developers also began fewer new projects, with just 69,200 square meters of industrial space initiated in Q4 2024—the lowest volume in three years. Of the new developments, 42% were speculative.
Gross take-up, including lease renegotiations, totaled 434,200 square meters in Q4 2024, marking a 30% increase quarter-on-quarter but a 9% decline year-on-year. Net take-up, excluding lease renewals, stood at 217,700 square meters, up 7% from the previous quarter but down 30% compared to the same period in 2023. Pre-leases accounted for 26% of gross take-up during the quarter.
The largest transaction was a 52,000-square-meter pre-lease by electronics manufacturer Hitachi Energy in CTPark Brno. Renegotiations also played a significant role, with two major renewals—each for 21,300 square meters—secured by a 3PL company at Prologis Park Prague D1 East and a manufacturing company at Prologis Park Pilsen II.
For the full year, gross take-up reached 1.435 million square meters, reflecting a 12% decline from 2023 and a 35% drop from 2022. Pre-leases were the dominant driver, accounting for 41% of total take-up, followed by renegotiations at 38%.
Manufacturing companies, particularly in the automotive sector, drove 60% of net demand, while 3PL providers accounted for 21%. The largest transaction of 2024 was BMW’s pre-lease of three halls totaling 127,700 square meters in Mošnov. Despite a 40% year-on-year decline in net take-up, the sector showed resilience, particularly as automotive companies regained momentum in driving demand.
The national vacancy rate edged up to 3.13% by the end of Q4 2024, an increase of just three basis points quarter-on-quarter but a significant 139 basis points higher than the same period in 2023. This represents the highest volume of vacant space—384,700 square meters—seen in five years. In Prague and Central Bohemia, however, the vacancy rate remained below the national average at 2.6%.
Headline rents for prime locations in the Czech Republic remained stable at €7.00 to €7.50 per square meter per month. Prime rents in regions outside Prague ranged from €5.70 to €6.60 per square meter, while rents for office space within industrial properties stood at €9.50 to €12.50 per square meter. Service charges remained consistent at €0.75 to €1.00 per square meter per month.
“Despite expectations, automotive companies emerged as the primary drivers of demand in 2024,” said Jan Hrivnacky, Head of Industrial Agency at CBRE. “We are also observing a revival in the e-commerce sector, which may not yet translate into transactions but is a positive signal for the market.”
Looking ahead, industry experts predict that new supply will pick up as delayed projects come online and pre-leases continue to drive demand. However, challenges such as rising vacancy rates and limited speculative development could temper growth in the short term.
Source: Industrial Research Forum
