Sunday, 20 September 2026
The Czech industrial property market is entering a different stage of its development cycle as a substantial volume of new warehouse and production space reaches the market. Availability has increased from the exceptionally tight conditions of recent years, but leasing activity remains healthy and manufacturers are playing an increasingly important role in supporting demand. At the end of the second quarter of 2026, vacancy across modern industrial and logistics properties stood at around 5.5%, representing approximately 751,000 sqm of available space.
At the same time, roughly 1.15 million sqm was under construction, creating the prospect of further increases in available space as projects are completed. Close to 600,000 sqm of the construction pipeline was expected to be delivered during the third quarter alone. The increase in vacancy does not, however, point to a broad retreat by occupiers. Gross leasing activity reached approximately 451,600 sqm during the second quarter, rising both from the previous quarter and from the same period of 2025.
Manufacturing companies have become particularly important to this equation. Industry research indicates that manufacturers represented more than 40% of second-quarter leasing activity, while other measurements put their contribution at close to half of newly generated demand. Much of the additional vacancy has instead emerged as newly completed projects have added space faster than tenants have absorbed it. This places manufacturers in a central position in determining how quickly the current development pipeline can be taken up.
Conditions also differ substantially between individual Czech industrial regions. Vacancy was approximately 4.4% in Prague and Central Bohemia and only around 1.7% in Brno, while Pilsen recorded about 8.3% and Ostrava approximately 15.6%. Development is similarly uneven, with particularly large volumes of construction concentrated in the Ústí nad Labem region, Greater Prague and Moravia-Silesia. These differences are increasingly important because a national vacancy figure of 5.5% conceals very different local supply-and-demand conditions.
The divergence is beginning to influence rental conditions. Prime rents have remained comparatively resilient in Prague and Brno, where suitable modern space continues to command strong pricing. Markets with greater availability have faced more pressure, with Pilsen in particular recording a noticeable year-on-year decline in prime rents. The Czech Republic can therefore no longer be viewed as one uniform industrial property market, with landlords’ negotiating positions increasingly dependent on location, available competing space and the depth of local occupier demand.
Developers are already responding to the changing supply picture. Although more than one million square metres remained under construction at mid-year, new construction starts fell to around 62,400 sqm during the second quarter, the lowest quarterly level for several years. The share of development proceeding without tenants already committed has also declined. Meanwhile, investment demand for high-quality industrial property remains present, with prime yields tightening during the second quarter. Together, these indicators suggest a market adjusting to greater availability rather than experiencing a broad deterioration in fundamentals.
The second half of 2026 will therefore provide an important test for Czech industrial property. Years of extremely limited availability are giving way to greater choice for occupiers, while landlords face more competition and developers become more selective about adding capacity. Manufacturing demand, regional industrial investment and logistics requirements could absorb a significant part of the existing pipeline, but the wide differences between Prague, Brno, Pilsen, Ostrava and other industrial regions mean that adjustment is unlikely to happen evenly. If manufacturing demand remains strong, the result could be a more balanced Czech industrial market rather than the beginning of a downturn.
Source: CIJ.World Research & Analysis Team
