Developers plan to deliver almost 680,000 sq m of new industrial space in the Czech Republic this year. 350,000 sq m of this total is already under construction. In 2020, more than 650,000 sq m of industrial space was added to the market, which pushed the total supply up to over 9.2 million sq m. Due to the ever-growing demand and activity of developers, we expect to reach 10 million sq m in the first half of 2022 at the latest.
"Despite the partial decline in construction last year, we see a number of new projects and developers. They are responding to the new wave of demand, especially from e-commerce and operators connected to this sector," says Dušan Drábek, Head of Industrial and Logistics Agency ent at the international consulting company, BNP Paribas Real Estate.
The increased activity of tenants signalled the boom in the construction of industrial premises. The last quarter of 2020 was the strongest quarter since 2016, with 459,760 sq m of realised demand. "The proof of the growth of the segment, underpinned by the expansion of online business, is the revival of development in the regions," says Kamila Breen, Head of Research & Consultancy. To put it simply, the industrial sector has grown as a result of the forced downturn in traditional retail formats.
The growing demand for logistics space in the Pilsen region, mainly due to its location near the border with Germany, is attracting developers and massive construction. 92,000 sq m of logistics space is currently under construction in the Pilsen Region. The Moravian-Silesian Region is not far behind, with plans to build up to 400,000 sq m of industrial space.
Prague and its surroundings maintain a clearly dominant position, with a 35% share of the total leasable area. "The demand for warehouse space in the wider Prague area is higher than what developers are capable of supplying. This has initiated the emergence of new projects in Central Bohemia, which is becoming increasingly more attractive," adds Dušan Drábek. In the fourth quarter of 2020, the Prague area accounted for twenty-seven percent of new leases - an increase of four percentage points compared to the previous quarter.