The economy is growing; demand for industrial property exceeds supply

Arete Invest, a fast growing fund focused on the property investment, started to publish its quarterly market analysis of industrial and logistic property in the Czech Republic. In the second quarter, 205,000 m2 of new premises were built but 245,000 m2 were newly occupied, thus more than 40,000 m2 of the area. In total there are 6,68 mil m2 of industrial and logistic property in the country, slightly more over 4% of the area is free.

„The market situation of industrial property confirms a long-term positive trend of economic growth. A shortage of manpower is becoming a limiting factor for investors and tenants. Another interesting parameter is a vacancy rate. The vacancy rate reaches very low levels, nevertheless, it is important to realize that it is still a great absolute value out of the total amount of m² of the property,” explains Tomáš Novotný, a member of the investment committee of Arete Invest fund, responsible for the strategic investment and asset management. “When choosing our investment, we focus on the locations where the unemployment shows for us more positive values than the average number. Therefore, our portfolio has a zero-vacancy rate and it falls within the above-average values compared to the market,“ he adds.  

At the end of the second quarter of this year there were 6,68 mil m² of industrial and logistic property in the Czech Republic, another 558,000 m² is under construction, especially around Prague. 4,05% of the area is free. The so-called gross lease reached 325,000 m² in the reference period. Net lease, which is net of repeatedly concluded contracts and thus represents newly occupied premises, was 245,000 m². The lease rate per square meter generally varies between EUR 3,60 and 4,40 in case of industrial and logistic property.  

About the industrial property analysis

 „Within the framework of our current sub-fund Arete Invest CEE II we create subsequently a portfolio of yield industrial and logistic property with a high standard. We analyze the market in detail and we have decided to share our lessons learned. Thus, we are going to publish our analysis conclusions on a quarterly basis,“ mentions Lubor Svoboda, a co-founder and chairman of the management board of the Arete Invest fund.

The analysis of industrial and logistic property includes objects owned by developers and investors. It does not include e.g. buildings which the company builds for itself and which are its property. Arete Invest draws up the analysis on a quarterly basis based on the public market data acquired by face-to-face meetings and telephone interviews of the developer´s and investor´s representatives and from published supplies and demands. If the acquired data is incomplete or ambiguous, the data examination is carried out to ensure the analysis is based on the data which is complete within the maximum possible extent.