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Czech Industrial Market Witnesses a Successful 2016. Read 5 Records of 2016 and the Prediction for 2017

Czech industrial market has witnessed several records and successes in 2016. Have a look at them at glance: 

1. Czech market of modern industrial properties exceeded 6 mil sqm mark in 2016 which makes it – along with the Polish one – the most advanced markets in CEE.   
2. 2016 gross-take up on the Czech industrial market crossed 1.2 mil sqm which makes it one of the best years in the Czech market history. There were several similarly successful years such as 2015 and 2014 when gross take-up reached a record level of nearly 1.4 mil sqm.   
3. Due to strong constant demand, the national average vacancy rate oscillated around 4 %, which is the decade´s low and one of the lowest indicators in the market history.
4. Thanks to the fact that on average 96 % of the Czech industrial parks were occupied and sought-after locations were unable to accommodate the constant demand, a number of developers took the business risk and started the speculative development of industrial premises, i.e. without having their tenant secured in advance. The current speculative development volume of approximately 30 % of the total volume is however still far below 2007/2008 pre-crisis levels when it represented approximately 70 %. 
5. The largest leasing transactions on the Czech industrial market in 2016 include:

JLL´s forecast for 2017:

„Czech Republic will remain highly attractive for both industrial developers and occupiers capitalising on its locations in the centre of Europe, with affordable and skilled labour, coming from the industrial tradition of the country and the stable economic environment,“ says Harry Bannatyne, Industrial Leed Director of JLL for CEE.

„Completion of the D8 highway to Dresden at the end of 2016 will further enhance interest for Ústí nad Labem region. Both Ústí nad Labem and Karlovarský regions will be target of investors in 2017 as being located to the German border with improved infrastructure and with available labour force,“ adds Blanka Vačkova, Head of Research JLL for the Czech Republic.

„Due to solid domestic demand of Czech households we expect strong demand of retailers, e-commerce and 3PLs to continue in 2017. Manufacturing will remain a significant part of the demand but due to labour shortage it will face difficulties in some highly attractive regions with low unemployment rate. Historically low vacancy rate will further encourage developers to undertake speculative construction, especially in the regions with constantly high demand,“ concludes Blanka Vačkova, Head of Research JLL for the Czech Republic.