Market Trends of Czech Republic Facility Management Industry
This section covers the major market trends shaping the Czech Republic Facility Management Market according to our research experts:
Industrial Segment Accounted to Hold the Major Share in the Market
- The industrial sector of the Czech region has been going through high development owing to the adaptation of the Liner Act that the government adopted in 2019. This will speed up the property settlement in infrastructural projects and speed up the construction in the region. The adoption of the Liner act will bolster the ongoing industrial and infrastructure project and help facility management companies take advantage of these ongoing projects by providing critical services like water management, electricity, technical, cleaning, and logistics.
- As per the CBRE report on the Czech Republic market, Figures Q1, 2022. the total space under construction is approximately 1,147,000 sq m, an increase of 3% compared to the previous quarter and 106% as compared to last year's same quarter. Around 23% of this space is located in the Olomouc region, where these ongoing construction sites require lots of maintenance and FM services to build a structure that is environmentally friendly to attain sustainability.
- In Prague, total leasing activity TLA in Q1 2022 exceeded 135,630. The market was dominated by renegotiations in existing premises, which accounted for 43% of total TLA. These leasing activities are mainly for infrastructural development in the region, which will require facilities companies to cater to the basic requirement of ongoing projects, which include electricity, IoT, and cleaning services.
- As per the data published in Market outlook, 2022 Czech Republic by CBRE, the most active companies in all these development are IT companies (27%), manufacturing companies 13%, and consulting/professional services accounted for 10%, including service from FM companies.
- The ongoing projects require a lot of investment from various sectors, government or private. Still, the common thing between all these investments is the aim for development in the region which is mainly for the future perspective so that country could narrow the GDP stood at negative 5.3% owing to COVID-19 impact on the projects and businesses.
Understand The Key Trends Shaping This Market
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Logistics Accounts to Hold the Key to Market Growth
- The Czech Republic Region has been focusing on developing its infrastructure with the help of private as well as public funding, which in turn increases the demand for services like logistics for the fulfillment of raw product supply at the project location, which will attract many players around the world to fulfill the requirement on ongoing projects.
- For instance, the total take-up of industrial space in Q1 2022 stands at 404,200 sq meters, an increase of 35 % from the previous year. 43 % of the volume came from logistics companies, followed by manufacturing companies, 36%, and distribution companies accounting for 19% remaining, and 2% from other sectors (source: CBRE).
- In terms of Volume take-up, Q1 2022 was the third-highest ever recorded in the Czech Republic. The industrial market exceeded by 2 previous quarters of Q3 and Q4 of 2021. This is mostly driven by logistics companies.
- Recently in the region, one of the largest transactions in the Industrial sector was reported to be global real state firm Hines, which has acquired a portfolio of four logistics assets totaling 65,960 sq meters located in Brandys nad labem, Vestec, and Jazlovice. With this transaction, it is evident that with ongoing projects in the region, the businesses will require logistic companies for their facilities and supply requirements.
- The Czech Republic market has been experiencing higher demand for leasing spaces dominated by renegotiations in existing premises, which accounted for 43% of total leasing activities. This negotiation involves companies from every sector out of the total 10 % companies reported being from consulting and professional services (source: CBRE).
