Czech Industrial Market Sees Third-Strongest Demand Year
The Czech industrial real estate market demonstrated remarkable resilience and growth in 2025, recording its third-strongest demand year in history. The total modern industrial space in the country now stands at an impressive 13.28 million m². This robust performance underscores the Czech Republic's appeal as a prime location for industrial operations in Central Europe.
Gross realized demand for the full year reached nearly 2.1 million m², with 1.2 million m² representing newly leased space. This substantial activity highlights a healthy and expanding market, attracting both new entrants and existing businesses seeking to optimize their operational footprints.
Manufacturing and E-commerce Drive Growth
Demand was primarily fueled by manufacturing companies, which accounted for a dominant 49% of the total demand, particularly from the dynamic automotive sector. This signifies the country's strong industrial base and its importance in regional supply chains. Following manufacturing, the distribution sector (including retail and e-commerce) contributed 25% of demand, indicating a re-emerging strength in online retail. Logistics companies also played a significant role, making up 16% of the demand. Jan Hřivnacký of CBRE noted the particular strength of manufacturing and the resurgence of the e-commerce sector, which are key indicators of economic vitality.
Significant New Supply and Evolving Construction Trends
The market also saw considerable development activity. Approximately 1.25 million m² of industrial space was under active construction at the end of 2025, with a third of this expected to be completed in Q1 2026. This ongoing development ensures a steady pipeline of new facilities to meet future demand.
New supply in Q4 2025 totaled 229,000 m², contributing to a grand total of 813,500 m² for the entire year – a significant 53% increase from 2024. Interestingly, the share of speculative construction decreased to 27%, suggesting a more cautious and demand-driven approach by developers. This trend, as highlighted by industry experts, might lead to an increase in build-to-suit projects, offering businesses more tailored solutions for their specific needs.
Regional Vacancy Divergence and Stable Rents
While the overall market remained strong, the vacancy rate increased year-on-year by 101 basis points to 4.8%. However, this national figure masks significant regional differences. Prague and Central Bohemia maintained a very low vacancy rate of 2.6%, indicative of high demand and limited availability in these prime locations. In contrast, the Moravian-Silesian region recorded the highest vacancy at nearly 14%.
Prime rents in Prague remained stable for the fifth consecutive quarter, holding steady at 7.00 – 7.50 EUR/m²/month. This stability in the capital reflects continued strong demand. However, the rising vacancy in certain regions might put pressure on rents and influence future development strategies, potentially creating opportunities for businesses seeking more cost-effective options outside core areas.
Opportunities for Businesses in the Czech Republic
For businesses seeking industrial or warehouse space, the Czech market in 2025 presented a landscape of robust demand, strategic new supply, and regional specificities. Strong performance in manufacturing, coupled with a resurgent e-commerce sector, indicates favorable conditions for growth. While prime locations like Prague maintain stable, competitive rents and low vacancy, other regions offer greater availability and potential for more flexible rental terms. The shift towards build-to-suit projects also provides a unique opportunity for companies to develop bespoke facilities perfectly aligned with their operational requirements.
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