Office and warehouse markets moribund in 2010

2010-03-09

In 2009, the Czech construction industry suffered a steep downturn, and investments in property and the construction of new office and logistics space declined last year by approximately 50% in comparison with 2008, according to analysts at the Prague Research Forum (which consists of CB Richard Ellis, Colliers International, Cushman & Wakefield, DTZ, Jones Lang LaSalle and King Sturge).
The construction of offices in the country is expected this year to be brought almost to a standstill. In 2010 Prague should see about 33,700 m² of new office space, a reduction in comparison with the 160,000 m² delivered in 2009 and with the 328,000 m² completed in 2008. One of the most significant office projects to be delivered in 2010 is being developed by Passerinvest in central Prague. The vacancy rate on the Prague office market has increased from 10.4% in September 2009 to 12% at present. The vacancy rate in the area is expected to increase to 14% by the end of 2010.
The Czech warehouse and logistics market is expected to stagnate in 2010. Last year, 381,000 m² of new warehouse space were added to the market. In the final quarter of last year, only about 8,100 m² of warehouse space were delivered. Construction in this market area has practically stopped. It is not expected that any projects will be added to this market in 2010. One exception could be the company VGP, which announced that it would build new logistics space in Horni Pocernice and Dobrenice.