Navigating the Czech Industrial Real Estate Market in Q2 2025

The second quarter of 2025 saw the total supply of modern industrial space in the Czech Republic reach an impressive 12.68 million square meters. While this indicates a robust market, the period was marked by a noticeable deceleration in demand compared to the previous quarter. Businesses looking to expand or relocate in the Czech Republic should pay close attention to these trends, as they may present unique negotiation opportunities.

Demand Softens, but Supply Continues to Grow

Gross realized demand for industrial space in Q2 2025 reached 304,900 square meters, representing a quarter-on-quarter decrease. Despite this dip in immediate uptake, the development pipeline remains active. Approximately 131,600 square meters of new warehouse space were delivered to the market, a significant 32% year-on-year increase, even with a 38% inter-quarter drop in completions. The largest new delivery was the Logistic Centre Jihlava II, adding 43,600 square meters primarily for Bosch Powertrain.

Looking ahead, nearly 1.2 million square meters of industrial space, specifically 1,178,800 square meters of warehouse and production facilities, are currently under active construction across the Czech Republic. This represents a substantial 17% quarter-on-quarter and 19% year-on-year increase in development activity, with speculative construction rising to 38% of the total, indicating developers' confidence in future demand.

Vacancy Rates and Rental Stability: Opportunities for Tenants?

The overall vacancy rate stood at 4.0% at the end of Q2 2025. Prime rental rates in Prague remained stable for the third consecutive quarter, holding firm at €7.00–€7.50 per square meter per month. This stability in headline rents, however, doesn't tell the full story. As Jiří Kristek of Cushman & Wakefield noted, while base rents are steady, tenants are successfully negotiating higher incentives, particularly in areas with higher vacancy rates. This suggests a more tenant-favorable environment where astute businesses can secure better deals.

For those requiring integrated office solutions, typical office fit-out rents range from €9.50 to €12.50 per square meter per month. Standard service charges generally fall between €0.75 and €1.00 per square meter per month.

Key Transactions and Market Dynamics

The quarter's most significant new transaction was Yusen Logistics' lease of 43,500 square meters at P3 Lovosice Cargo. This major deal, alongside the rise in speculative construction, underlines the ongoing dynamism of the market despite the overall slowdown in demand. Developers continue to build, anticipating future needs, which will contribute to a broader selection of available properties.

What This Means for Your Business

For businesses seeking new industrial or warehouse space in the Czech Republic, the Q2 2025 market data presents a compelling scenario. The slowdown in demand coupled with increasing supply, particularly speculative developments, could translate into enhanced negotiation power. It's an opportune time to explore the market, leverage the availability of new space, and potentially secure more favorable lease terms and incentives. Engage with real estate experts to identify properties that not only meet your operational needs but also offer the best possible commercial conditions.

Source: systemylogistiky.cz