There is a growing interest in unfinished industrial premises in the Czech Republic

There is a growing interest in unfinished industrial premises in the Czech Republic, which the future tenant can adapt to his own needs. The so-called Shell & Core trend consists in the fact that the developer builds only the external structure and basic external infrastructure, while the client decides on the interiors and internal layout of the building. Although this type of construction has been around in the Czech Republic for a long time, it has only grown significantly in recent years. Currently, there are approximately 360,000 sqm of such space available in the Czech Republic. This is based on data from the real estate consultancy Colliers.

"If a developer prepares a project, it can respond more flexibly to demand. Clients do not have to wait a year for the construction of a new hall, but only a few months, and they can adapt it to their ideas and needs," said Miroslav Kotek, head of the industrial real estate department at Colliers.

On the other hand, this type of construction does not allow, by definition, to change, for example, the clearance, i.e. usable height, the shape of the building or the spacing of the columns.

Developers usually wait until the conclusion of a future lease agreement to complete similar projects. According to Colliers, clients may require, for example, above-standard hall fit-out, and it is easier to carry out such modifications in the as-built state. A completed building of a certain standard might not suit everyone and could extend the time when the space is not occupied.

The vacancy rate for such complexes was two per cent in the first quarter of this year, according to Colliers data, but if all such projects were completed without secured tenants, the vacancy rate in the Czech market could reach almost five per cent, the firm said.

Shell & Core industrial buildings are located in CTPark Prague North near Kralupy nad Vltavou, for example. There, CTP offered 70,000 sqm of such space for lease in March. Another is also part of the Přehýšov logistics centre near Plzeň. One of the halls there was at this stage last year and was subsequently completed according to tenant requirements. The other one now has a completed skeleton and is ready for internal renovations.

According to an analysis by the Industrial Research Forum, which collects data from CBRE, Colliers, Cushman & Wakefield and iO Partners, demand for leases of manufacturing and logistics premises in the Czech Republic fell significantly in the first quarter. Compared to the last quarter of last year, it decreased by 62 percent and by 53 percent year-on-year. The number of completed industrial complexes and the construction of new ones also fell. A total of 138,100 sqm of industrial space has been started, with almost 39 per cent of it speculative.

Source: CTK
Photo: CTPark Prague North