Do you need an expert valuation report for a warehouse or production hall?
In March 2020, the so-called COVID-19 pandemic broke out in the Czech Republic. This pandemic had a significant impact on the behavior of the real estate market. The most affected segment was commercial real estate, including hotels, guesthouses, recreational facilities, and office buildings.
On the other hand, warehouses and production halls have prospered during and after the COVID-19 crisis. Rental prices have risen sharply, while capitalization rates have decreased significantly. If you are interested in the current market value of warehouses and production halls and other related insights, read this article.
Capacity of warehouses and production halls
Currently, there are approximately 9.99 million m² of warehouse and production hall space in the Czech Republic. In the first half of 2022, an additional 550,000 m² of new space was completed and released to the market, with about 1,000,000 m² still under construction — half of which has already been leased. As a result, prime rent now stands at a record €5.50/m²/month, reaching up to €6.50/m²/month in the Prague region.
The annual vacancy rate for warehouse and production halls is around 2%, a historic low. In the wider Prague area, vacancy is about 1.5%, and in some regions with strong transport connections to Germany, even 0%. Since the beginning of the COVID-19 crisis, the capitalization rate (prime yield) has fallen by roughly 1.25%, currently standing at around 3.75%.
The largest warehouse in the Czech Republic
The largest building in this segment is the warehouse in Kojetín, which will be used by Amazon. It is scheduled for completion in December 2022. The warehouse will provide up to 850 jobs in a four-story building with a total area of 246,000 m². It was built on the site of a former sugar factory and features modern technology, including a 4 MW photovoltaic power plant.
The clear winner of the current COVID-19 crisis in the Czech commercial real estate market is undoubtedly the warehouse and production hall segment. If you need an expert valuation report, do not hesitate to contact us.