Czech industrial development shows a quality growth
According to Savills European Industrial and Logistics Occupier Markets research, industrial development in the Czech Republic is showing strong growth. This, in turn, favours the development of other sectors of the economy.
The analysts note an increase in tenant demand for industrial space. They cite the following as key factors for the rising dynamics:
– improved economic performance;
– technological advances;
– introduction of ESG principles.
The Karlovy Vary, Plzeň, and Moravian-Silesian regions are the most developed industrial property markets in the Czech Republic. Based on data from the end of 2024, facilities with a total area of 763 thousand square metres were under construction in these regions. Panattoni and CTP Invest are the main developers in these locations.
Ondřej Micek of Savills sees good prospects for the Czech market. He expects demand to rise in 2025. Moreover, the process of absorption of speculative warehouses, which started in 2024, should end soon.
Tenants are increasingly important to the implementation of ESG principles on the market. This is leading to higher interest in facilities equipped with solar panels or off-grid pumping stations. In addition, the availability of charging stations for electric vehicles plays a vital role.
Overview of significant industrial development projects by region
Analysts forecast that activity in the Usti nad Labem region will grow between 2025 and 2026. The favourable location near the TSMC plant will drive demand for local facilities. Industrial facilities are being built in Dresden, and operations will start in 2027.
In terms of current projects, a significant number of facilities are on the outskirts of Prague and in the Moravian-Silesian region. The latter offers:
– vacant space, 172,900 sqm, in projects under construction;
– more than 700,000 sqm under construction.
Plzen offers tenants premises with a total area of 126,700 sqm. The largest in the region is a 50,000 sqm facility under construction. It will be ready for leasing in a few months. Developers are also planning to start construction of approximately 320,000 sqm in the near future.
The Czech market is attracting tenants with quality properties. Most of the objects built in the country meet ESG standards and can adapt to different companies’ tasks. Tenants also require the ability to automate warehouse and industrial space. This is an important factor given the labour shortage. Furthermore, there is a growing demand for digitalisation, which also requires the implementation of certain technologies.
The Czech Republic is experiencing a high level of construction activity. Around 1.5 million square metres are under construction. At the end of 2024, 48% of the planned space will be available for rent.