Prologis ramps up spec development in Czech Republic

Prologis grew its CEE portfolio of warehouse real estate last year to 4 million square meters, of which 1.1 million square meters are located in the Czech Republic. It completed 118,000 sqm of new space during the last year in four buildings, located near primary markets like Prague, Brno and Pilsen. On the leasing front, Prologis secured signatures on 285,000 sqm worth of renewals and an additional 105,000 sqm in new leases. The company made just one acquisition of an existing warehouse during 2018 in CEE, a 43,000 sqm facility along the D5 motorway to Germany.

Country manager Martin Baláž says will is rolling out a new method of service charges called Clear Lease. Rather than tenants having to guess how much they'd end up paying for heating, cooling and electrical charges, Prologis will offer them a fixed fee. Baláž says it will be more comfortable for tenants and more efficient from an administrative standpoint for Prologis. He says an extensive survey by Prologis of its clients suggests that 2019 will be a strong year that will benefit from the momentum built up during 2018. Underlying demand should help overcome potential hurdles such as Brexit, which have caused fears of an economic downturn. Baláž said Prologis is so confident about the economy that it's no longer worried about speculative building. "All of the developments we've planned for this year are planned as spec developments," he said. "But we may find a customer for the space before we start on them."