You can also listen to the interview in the audio version.
After years of growth, the market for warehouses and industrial halls is experiencing a cooling-off. The drop in demand comes mainly from online stores, which had big eyes under the impression of strong growth during the covid pandemic.
“The year 2024 will be a stabilization year. We assume that demand will cool down a bit, as companies have saturated their needs in the past. The expansion and development of existing tenants will not be as dynamic as in the past,” Peter Jánoši, head of the real estate group P3 for the Czech Republic and Slovakia, which deals with the construction and management of logistics halls, said in the SZ Byznys Agenda.
“E-commerce became significantly saturated during the Covid years and in the period after. Today, we see an increase mainly from omnichannel sellers who supply online sales as well as brick-and-mortar stores,” added the head of the domestic part of P3.
After high inflation subsides, Jánoš expects household consumption to grow again. And this could be a new impulse for the demand for halls. For now, however, it is true that, for example, a number of e-shops that have expanded in recent years currently have nothing to fill their warehouses with and are therefore looking for a place for themselves before the lease agreement of the so-called sub-tenant expires.
“We are seeing an increase in the so-called gray vacancy. For example, companies that went through a huge boom in the covid years took up a lot of square meters of warehouses, but now they often feel empty,” noted Jánoši from P3.
Real estate group P3
The Prague-based P3 group is one of the major players on the European industrial real estate market. The company is controlled by Singapore’s sovereign wealth fund GIC.
The group’s portfolio includes a total of 8.3 million square meters of warehouses and production halls. Of these, 1.4 million are in the Czech Republic.
P3’s competitors include other large companies in the field of industrial real estate, such as Accolade, CTP, Panattoni or Prologis.
The overall demand for real estate, which often grows near highway exits, fell by 31 percent last year, according to data from real estate consulting companies Cushman & Wakefield and Colliers International.
“I still think it’s one of the most stable segments, but we also see some changes and breaks in it,” noted Jánoši from P3.
“We feel the cooling primarily from the regions. We feel it, for example, in the Moravian-Silesian region, where competition has increased in the meantime. For example, good locations in Prague still do not have any noticeable problems,” added the manager.
Photo: Daniel Novák
P3 Group Executive Director for the Czech Republic and Slovakia Peter Jánoši.
The sensitivity of the situation in the Moravian-Silesian Region was also confirmed by consultants from the company 108 Real Estate. In particular, according to the advisers, there are a number of plots for the construction of halls for sale.
“108 Real Estate deals with several sales of real estate assets of companies that have decided to end their activities in the Czech Republic and continue on other markets. The reason for the exit is the rising cost of employees, more expensive operation and other tax aspects,” said director of the consulting company Jakub Holec.
The P3 group built six buildings totaling 70,000 square meters on the Czech market last year. They are currently building a total of 50,000 square meters of halls.
“We would not like to slow down. But everything will depend on how we manage to lease existing parks or parks under construction,” answered Jánoš from P3 when asked if the company is slowing down the pace of construction.
The entire interview is available in the introductory video, on Podcasty.cz and in podcast applications.
