According to JLL, 2015 was a very good year for the industrial market in the Czech Republic and brought about a number of records and ‘firsts’.
At the end of Q4 2015, the total modern class-A industrial stock in the Czech Republic (owned by developers and investors) stood at 5.69 million m². Greater Prague remains the largest industrial market in the country with a 40% share. It is worth pointing out that Prague´s class-A industrial stock of 2,264,000 m² is now equal to more than double the amount of stock that was recorded in the whole Czech Republic (1,033,000m²) 10 years ago, in 2005.
As of Q4 2015, the Pilsen region became the second largest industrial market in the country with 15.5% of the stock. Brno has moved to third place with a share of slightly below 15%.
New supply for Q4 2015 reached 153,300m² when 17 new schemes were delivered to the market. Speculative construction accounted for 22% of all delivered projects. The majority of new completions were situated in the Pilsen region (49%). In 2015, the total volume of newly built industrial space reached 565,700m² which is the highest figure recorded since the global financial crisis. The highest share of new space was delivered in Prague (45%) followed by the Pilsen region with 30%.
“2015 was also a record year in Czech history in terms of gross take-up, demonstrating that Czech Republic remains a strategic location for all industrial sectors,” said Harry Bannatyne, head of industrial agency at JLL. Gross take-up reached 1,394,300m² in 2015 which is slightly higher than the previous record level registered in 2014 (1.38 million m²). Net take-up in 2015 reached 875,600m², replicating a very similar result to last year. The Prague, Pilsen and Brno regions accounted for the highest shares of both gross and net take-up during the period.
In Q4 2015, the countrywide vacancy rate dropped to 5.1% which is the lowest registered vacancy rate on the market since the pre-crisis period. Only a year ago, at the end of 2014, the vacancy rate stood at 8.3%. “Demand is dramatically outstripping supply and if this continues, we will see further reduction in the vacancy rate,” explained Harry Bannatyne, adding: “Automotive suppliers are still a key driving force of industrial demand in the Czech Republic, accounting for more than 20% of all transactions.”
