After the records comes the slump

The construction boom of industrial and warehouse space in the Czech Republic continues, even though the market is starting to change. After the end of the pandemic, the demand for e-shops decreases and manufacturing companies are most interested in new premises. Industrial developers had the most industrial and warehouse space in history under construction in the third quarter of this year. But the market is developing interestingly, the sectors with the greatest demand are changing, so the completion of some projects is pending.

Two members of the Savills industry team, Jana Čožíková and Ondřej Míček, also provided their comments on the current changes in the market for the Estate server.

The slowdown is slowly beginning to show itself in rental prices and vacancy rates as well. “The high activity of developers and record construction is a positive sign. It not only affects the rent of industrial and logistics properties, where we are already observing a slight year-on-year decrease but also the vacancy rate, which represents a year-on-year increase,” confirms Jana Čožíková, Associate of the consulting company Savills.

Normalization after COVID-19 is now felt most by e-shops, which were the stars of the business during the lockdowns and closed shops. “Due to high inflation and increased living costs, people are spending less on unnecessary goods and have partially returned to brick-and-mortar stores, e-commerce demand for warehouse space is therefore falling due to lower sales,” explains Ondřej Míček, Senior Industrial Consultant at Savills.

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Article author: Jan Němec
Source: Estate