Czechs prefer to buy commercial spaces rather than renting them

Prague - Czech companies prefer to buy or construct production halls and storage spaces; in contrast, rentals dominate abroad. This is indicated by an analysis from AAAINDUSTRY.CZ sent to ČTK. This trend was also confirmed by MEXX Reality. The market for these spaces is growing annually by dozens of percent. Acquisition costs are expected to increase by up to eight percent, while rental prices should not rise.
    "Some Czech managers still live in the stereotype that a manufacturing company must own production spaces, just like all other necessary assets. Real estate is expensive and ties up large amounts of capital that could be used more effectively elsewhere," said the director of AAAINDUSTRY.CZ, Přemysl Vávra.
    According to René Hradecký from MEXX Reality, in Europe there is a trend to rent both manufacturing and logistics halls, which is gradually emerging in the Czech Republic as well. According to him, real estate funds and investors are primarily interested in high-quality properties. Quality storage and logistics properties have proliferated like mushrooms after rain, especially on the outskirts of large cities and close to highway exits.
    For the construction of new logistics centers, Prague, Brno, and other regional cities, especially Ostrava, which currently has the greatest potential for development, remain attractive for investors, according to Hradecký. Particularly important for their construction is the location in close proximity to the highway.
    "(The Czech) market for industrial and storage real estate is growing at a high pace, in the order of dozens of percent annually. Developers are entering the market with large logistics and industrial park projects, yet the vacancy rate is very low. This pace will be maintained for another two to three years," Vávra stated.
    According to AAAINDUSTRY.CZ, this year, the acquisition of storage and production spaces will increase by up to eight percent. Meanwhile, rental prices are expected not to rise on average and may even decrease in some locations.
    According to AAAINDUSTRY.CZ, there are enormous differences in rental prices for storage areas depending on the regions. In smaller towns, prices for older standard spaces start at 20 crowns per square meter per month. In Prague, companies must pay four times more. Rental prices for modern storage spaces generally range from 110 to 140 crowns per square meter per month, the company states in a press release. “Renting production halls is usually more expensive, based on their equipment, by at least another 30 crowns per square meter per month,” added Vávra.
    Rental prices for storage spaces generally range around four to five euros per m2 (120 to 140 crowns), but in Prague, quality storage spaces are starting to appear at 3.5 euros per m2 (100 crowns). According to Hradecký, spaces smaller than 1000 m2 are typically not rented out in these logistics complexes.
    The situation is different for smaller warehouses, which are more likely to emerge in regions with poorer transport accessibility. Often, these are renovated old halls or even cow sheds; rental prices here are very individual and mainly depend on local demand. In regions with poor transport access and a tradition of industrial production, these warehouses often remain unused for several years, according to him.