MARKET IN MINUTES | CZECH REPUBLIC INDUSTRIAL MARKET Q2 2023

Year-to-date, a total of 477,700 sq m of modern industrial space has been completed, an increase of 12% compared to H1 2022. The total stock thus reached 11.6 million sq m (+14% y-o-y).
The market continues to suffer from a short supply of available space and during H1 2023 the vacancy rate remained unchanged at 1.9%. In 7 of the 14 counties the vacancy rate still sits below 1%.
Developers are trying to balance the space shortage with the impressive 1.4 million sq m of premises under construction. To put this in perspective, this amount represents a 15% increase over Q2 2022 and a 78% increase over Q2 2021. At the end of June, 39% of the space under construction was still available for pre-lease.
Since the beginning of the year, contracts have been signed for a total of 933,300 sq m (-38% y-o-y), however, 43% of these commitments were renegotiations. Net demand for H1 2023 was 531,000 sq m, representing a 45% decline against the record highs of H1 2022 but being only 8% short of the 5-year H1 average. South Moravian region saw the highest volume of net demand in H1 2023 (112,100 sq m), followed by the Pilsen region (72,800 sq m).
After a very sharp increase in headline rents during 2022, a downward trend emerged this year, both in Prague and other regions.