News

Bigger is Better

Czech Republic has been firmly confirmed as the heart of Europe, with it being in the spotlight for many large occupiers, investors and developers alike.

“2013 saw a record year in terms of Gross Industrial Take-up with the largest volume of sq metres transacted, nearing 1.2 million. In 2014, we have also had a very healthy start and expect to see even more big deals by the year end, exceeding 2013 figures in every respect. Large occupiers have also helped emphasise the ‘bigger is better’ theory, with occupiers leasing extremely large distribution, e-commerce and production facilities throughout the country,” says Harry Bannatyne, Head of Industrial Agency at JLL. The best example of this is Amazon who, in Prague, will officially occupy the biggest free standing building in Czech Republic at 95,000 sqm, which is currently being developed by international developer Panattoni. This occupier has also sparked many rumours of much more demand in the pipeline.

“E-commerce is changing the face of Industrial premises with the most renowned and largest German on-line grocer, ALLYOUNEED.COM, taking a large distribution warehouse just across the border from Germany in Bor/Pilsen. This, coupled with home-grown providers such as ALZA, Parfums.cz and Mall.cz all experiencing growth and therefore needing much bigger space. The biggest producers in the world are also seeing the merits of being situated in the heart of Europe with a blue chip list including Steelcase, Johnson Controls, Honeywell, Smiths Medical, among many others,” explains Harry Bannatyne and continues: “Developers are also seeing the attraction in large economies of scale with international developers such as Panattoni, VGP and Prologis purchasing strategic land plots for future development. The biggest investment deal to date, in Czech history, was recently concluded with P3 purchasing the VGP portfolio throughout the Czech Republic, which JLL was advising, again emphasising the biggest is best rule.”

This has always been the case for CTP who command the biggest portfolio of industrial premises within the Czech Republic. This year they broke through the 1.7 million sq metre mark, with more than 50% of their current growth coming from current and expanding tenants.

The Czech industrial stock has also smashed through the 4.7 million sqm mark of standing A-class Industrial premises recently with 2014 seeing the most space being delivered to the market since before the crisis, with more than 300,000 sqm being completed before the year end.  With growing confidence in the market, 2015 will see new completions break the 5,000,000 sqm threshold.