INDUSTRIAL MARKET HIGHLIGHTS

• After a 12% growth in 2022, the total industrial stock in the Czech market grew by 8% this year and at the end of 2023 totalled 12.1 million sq m. The countrywide vacancy rate sat below 2% for eight straight quarters from Q3 2021 to Q2 2023, averaging at 2.7% in the past five years and closed Q4 2023 at 2.3% (marginal increase q-o-q).
• Developers brought 932,100 sq m of new industrial product to market in 2023. The Ústí nad Labem and Pilsen regions led in new industrial development, together accounting for nearly 36% of construction completions this year. The Ústí nad Labem region took the top spot with 179,700 sq m of new deliveries. The market maintains a robust active development pipeline as 1.38 million sq m is currently under construction and 47% is developed speculatively.
• The demand for industrial real estate experienced robust growth during the two post-pandemic years between 2021 and 2022 when annual net take-up reached a record 1.5 million sq m. Velocity has cooled over the last several quarters due to economic pressures and slowing demand and in 2023 the country registered 951,800 sq m of new leasing activity (driven by the manufacturing sector). This was 37% down from the two record years but only 2% below the 10-year average. Total tenant activity, including lease prolongations and renewals, totalled 1.6 million sq m in 2023, being 29% below 2022 and 3% above the 10-year average.

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