The balance of power on the Czech industrial real estate market has has shifted. Whereas in previous years tenants essentially controlled the market, with a decreasing amount of warehouse development land available, the market has turned into a landlord’s market. According to a new JLL report, even though 662,200 sqm of new class A stock was added last year, vacancy levels remains at a rock bottom 4 percent. Tenants, in other words, are reliant on developers to create new space or to wait for existing space to free up.
The Head of JLL Industrial, Harry Bannatyne, believes that during the first quarter of 2018 the total volume of Czech industrial stock will rise to over 7 million sqm. “Tenants will need to think further ahead due to restricted land availability, especially with the much higher demands of electricity, gas and clear height. We will continue to see the rise of e-commerce in the take-up in 2018, with many major and local players seeing Czech Republic as the heart of Europe,“ he said. With 39 percent of the total Czech stock, Prague is still the dominant sub-market, followed by the Plzeň and South Moravian regions where 16 and 13 percent of the total space is located. Not surprisingly, Prague also had the highest transaction volume with 40 percent, the South Moravian region followed with 11 percent.
