Czech Republic sees modern industrial space development boom
1 Nov, 2005, Prague
Developers have invested over 16 billion CZK (€550 million) in the construction of modern industrial properties in the Czech Republic over the last ten years. The facilities are intended predominantly for leasehold. The end users have invested billions more in areas intended for their own use, whether storage or production.
"The modern leasehold industrial property market in the Czech Republic has grown during 2005 with 198,000 sq m newly built in the first 11 months of the year. We expect further growth in December. This can be compared to last year when 140,000 sq m was built during the whole year. The market is expanding rapidly throughout the entire Central European region," says Ferdinand Hlobil, Head of the Central European Industrial team of Cushman & Wakefield Healey & Baker (C&W/H&B).
"Some 240,000 sq m has been leased in the country from January to November 2005. In comparison, 173,000 sq m was leased in the whole of last year," Hlobil explains. "The dynamic market development stems from a steady inflow of new development companies creating sound competition on the part of developers. As a result, the supply is improving and pushing the prices slightly lower. This is good for the end user."
Foreign companies have mainly driven the construction of industrial property for lease. No major Czech developer for industrial property is currently operating in the country. Local companies prefer building facilities for their own use - not for lease.
Dutch developers have invested the highest amounts in the country over the last ten years and built 30 per cent of all current leasehold property in the country. Then come US developers with 19 per cent of construction. UK and German companies follow having both built and offered 13 per cent of industrial leasehold facilities in the Czech Republic.
One of the most active developers is the Dutch CTP group. The company focuses solely on sites outside Prague and has built over 248,000 sq m (27 per cent) of all existing premises to date. US developer Prologis has a 16 per cent market share having developed the D1 East Park and D1 West Park. The third largest is Germany's Viterra with its Rudná Logistics Park giving it 13 per cent.
"One of the new players which came this year is UK developer Parkridge. It built 30,000 sq m in Jirny, leased to Globus. Another 50,000 sq mis under construction and a large part of the space has already been leased now," Hlobil adds.
The boom of building first-rate industrial facilities started in our country in the latter half of the 1990s. A total of 920,000 sq m has been built in the country since 1995. Initially construction concentrated mostly around Prague and along motorways - D1 towards Brno and D5 towards Plzeň and Germany. Developers have increasingly been looking at locations outside of Prague over the last three years. Attractive locations include Brno, Plzeň, Hradec Králové and Ostrava. However, demand for the Northern Moravian region has been affected by the fact that the motorway to Ostrava is not yet complete.
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