„In the third quarter of 2022, the industrial market slowed down in comparison to the previous record-breaking year and a half after tenant's demand decreased. One-fifth of all enterprises in the Czech Republic announced that they plan layoffs which is one of the ways they are trying to counter rising energy prices and other costs. Developers are also more cautious in the development of new industrial parks as rising prices of rents are not always sufficient to make up for initial investment. Investments often made with loans are affected by increased interest rates by the Czech national bank. Tough times not only for tenants but for developers as well will continue until at least march of next year. However, it’s more likely that this period will last longer,” says Michal Bílý, head of the 108 AGENCY market research department.

Key findings:

• In Q3 2022, the stock of Class A industrial premises for lease reached 10,652,456 sqm.
• 439,127 sqm of new industrial premises were delivered to the market, a record.
• There are currently 1,152,780 sqm under construction. Most of these projects are pre-leased, however.
• Over 236,000 sqm of new premises is expected to be delivered in Q4/2022.
• The vacancy rate stayed at a historical low of 1.03% with only 109,699 sqm available on the market for immediate lease. If we do not count shell and core premises, the vacancy rate dropped to only 0.80%, representing 85,371 sqm. There was a significant shift in the Moravian-Silesian Region, where the number of vacant premises increased significantly compared to Q2 2022.
• Both gross and net take-up slowed down compared to H /2022.
• The first signs of market cooldown manifested in take-up statistics as both gross and net take-up recorded around 50% drop in Q3 2022 q-o-q. Lower net take-up was last recorded in Q3  2020 during the Covid-19 pandemic lockdown.

Stock of Class A premises for lease by region

The largest stock of industrial premises for lease is in the Central Bohemian region followed by the Pilsen region and South Moravian region. The top developers in terms of portfolio size in sqm are CTP, P3, Prologis and Panattoni. The regions with the lowest share of total stock are combined together in the “Other regions” category (South Bohemian region, Zlin region and Vysočina region).

In Q3 2022, construction activity built on the development started in 2021 and early 2022 as the total amount of completed premises reached 439,127 sqm, which is an increase of 122% in comparison to Q2 2022. So far, the developers delivered 722,762 sqm of modern industrial premises to the market this year which is a new record with one quarter to spare. Previously, the year 2017 held first place with 707,000 sqm delivered to the market.

Vacancy rate

In Q3 2022, the total amount of available industrial premises stayed at the same level as the quarter before. Vacancy in the Czech Republic reached 1.03% (109,699 sqm) with shell and core premises included. Without them, the total vacancy reached only 0.80% (85,371 sqm) in the entire Czech Republic. The majority of available space is now in two regions in particular. The top three regions by available premises are the Moravian-Silesian region with 43,000 sqm, the Pilsen region with 41,000 sqm and the Central Bohemian region with 9,000 sqm available for lease. In the rest of the Czech Republic, there is only 14,963 sqm immediately available.

The vacancy of Class A premises stayed at only 1.03% in Q3 2022. Since Q4 2021, the vacancy rate stays below 2% which is not favourable for the overall situation in the market. Over 1 million sqm of new premises is under construction for a few consecutive quarters in a row, which means the situation could improve in the near future.

Net take-up

Gross take-up in the Czech Republic in Q3 reached 375,328 sqm and NET take-up (excluding prolongations) 241,251 sqm. The largest new transaction took place in the GLP Park Brno Holubice where company FAST ČR leased over 31,000 sqm of modern industrial premises. The second is a new lease of 30,000 sqm by Fielmann in the GARBE Park Chomutov. The third largest transaction of over 25,000 sqm was signed by an undisclosed manufacturing company in the CTPark Kadaň. The newest transactions were signed in the Usti region with over 71,000 sqm, in the South Moravian region with over 59,000 sqm and then in the Central Bohemian region with over 22,000 sqm. Only one short-term deal was signed in Q3 for a total of 2,935 sqm. 

CTP tops the take-up chart with over 97,000 sqm. GLP is second with over 45,000 sqm and third is GARBE with over 30,000 sqm. These three companies account for 71% of all new deals in Q3 2022. In terms of net take-up, Q3 was the first quarter to fall behind the results of the record year 2021.