Prague warehouses are bursting at the seams and there is nowhere to build new ones. Companies go to Prague
“The share of unleased space is at record lows, in Prague we are talking about almost zero values within modern warehouse space,” says Cushman & Wakefield partner Jiří Kristek.
Savills’ latest market study shows that a percentage of nearly 3.5 million square meters is available. According to Colliers analyst Josef Stanek, the most frequent tenants are companies trading on the Internet and 3PL companies providing logistics of goods, the business has been hit by the coronary crisis.
In addition, the metropolis is running out of land. “Prague suffers from an acute shortage of industrial land. However, developments also affect rising land prices, lengthy permitting procedures, insufficient support from municipalities and strong competition for land, such as residential developers, who can usually pay more for brownfields than industrial developers, ”said Savills Chris LaRue, Head of Industrial Real Estate Leasing.
Developers are thus building where the zoning plan still allows them. However, market prices of suitable land pushed by high demand often rise beyond the feasibility of the project and development recedes from purchases. “Companies will have to settle for locations further from Prague, thus increasing the importance of locations with good road connectivity,” says Colliers analyst Josef Stanko.
Localities along the motorways within a distance of forty kilometers from the borders of the metropolis as well as new trends in hall design will come into play. “Thanks to warehouse automation and process robotization, it will be possible to build taller halls, making their use much more efficient. However, these are technologically and financially demanding devices, so their implementation will not be fast, “Jiří Kristek pointed out.