MARKET IN MINUTES | CZECH REPUBLIC INDUSTRIAL MARKET Q1 2024

Czech industrial market has experienced a slowdown, with subdued take-up levels and below-average new supply. Developers delivered 155,500 sq m of new space in Q1 2024, increasing the total existing A-class stock in the country to 12.2 million sq m.
Although marginally, the countrywide vacancy rate increased for the third quarter in a row, ending at 2.5% (52 bps higher than a year ago).
Development pipeline remains robust and in Q1 2024 the market had 1.5 million sq m under construction, setting a new record. Speculative projects accounted for 51% of the inventory under construction.
The market has undergone a rapid shift from the record-breaking take-up seen in 2021 and 2022 to subdued levels of activity. Gross take-up in Q1 2024 dropped to 196,000 sq m, marking the lowest quarterly leasing activity since 2011.
Net take-up, which excludes renewals of previously concluded commitments, totalled 114,300 sq m, a 55% decrease y-o-y and the weakest result since 2011.
In Q1 2024, headline rent levels remained largely flat, with no growth expected this year. There has already been a slight correction for smaller units of less than 2,000 sq m.