CTP: With an overall market vacancy rate of nearly 3% and the long permitting process—considered to be one of the longest in Europe—getting new projects started is becoming more difficult

Home > Competitiveness > Business and Industry > CTP: With an overall market vacancy rate of nearly 3% and the long permitting process—considered to be one of the longest in Europe—getting new projects started is becoming more difficult

19th August 2018

The Czech economy continued to grow through 1H 2018, but slightly slower than in 2017 due mainly to tight labour conditions. Unemployent continues downward, nearing 2.0%. The tight labour market, while pushing employers to compete to attract talent through softer means, greater incentives, and higher salaries, has also increased disposable income, positively impacting retail sales and e-commerce. Consequently, this leads to an increasing need for more warehouse space. Specifically, large logistics centres outside larger cities, and also smaller, last-mile and cross dock facilities closer to end users.

Demand continues to be seen primarily in the major Prague markets, but also on the western border with Germany in locations such as Ústí nad Labem, Karlovy Vary, Most, Chomutov and Cheb. Across the Czech market, a total of 566,300 m² were under construction as of 1H 2018, 24% of which in greater Prague. With an overall market vacancy rate of nearly 3% and the long permitting process—considered to be one of the longest in Europe—getting new projects started is becoming more difficult. Rents are expected to increase due to persisting low vacancy rates and continued strong demand.

Discussions were begun between the Czech and the German governments regarding the construction of a new high-speed rail line connecting Prague and Dresden, which will further deepen economic cooperation.

During 1H, CTP concluded deals for over 142,000 m² of space throughout the country, and has over 250,000 m² of new industrial space currently under construction, 50% of which is slated for completion by the end of the year. By year end, we plan on growing our portfolio in our home market to close to 3.3 million m².

The success of our workers accommodation in CTPark Bor continues, with our second 200-bed facility now in preparation. We are actively seeking both client and local support for similar facilities at other locations such as CTPark Stříbro and CTPark Bucharest West.

Due to our solid land bank, prepared and permitted for construction and our innovative worker’s residence projects, such as that in Bor, we are able to mitigate the downsides of the current tight labour market.