How does the Moravian-Silesian Region perform in the commercial real estate market?
Long perceived as a purely industrial hub of the Czech Republic, the Moravian-Silesian Region is also home to modern office, retail, and industrial properties. We have prepared an overview of the most important developments from the first half of this year.
20. August 2024
Office Market
The total office space in Ostrava reached 250,300 m² as of June this year, though it’s worth noting that 70% of these buildings were constructed or renovated over a decade ago. The condition of these spaces often doesn’t meet current demand, highlighting the need for modernization. The serviced office market holds great potential in regional cities and is slowly developing in Ostrava as well.
One of the most significant real estate events since the beginning of this year was the opening of the refurbished former Ostravica-Textilia department store, now branded as Boutique Business Incubator Ostravica. This modern space offers premium flexible office spaces totaling 6,800 m². A project of this kind has expanded the market’s offerings to meet current demand for serviced flexible office spaces with additional services. The transformation of this former shopping center contributes to the revitalization and modernization of Ostrava’s historic city center.
In addition to the Boutique Business Incubator Ostravica, another major transaction involved the new lease of spaces in Organica by Scott.Weber Workspace and office leases in IQ Ostrava by Heimstaden Czech. The highest achieved rent remained stable at 14-14.50 EUR/m².
The vacancy rate for office spaces in Ostrava rose to 11.9% year-on-year, though compared to the end of 2023, it dropped by 4 percentage points, indicating a growing demand for quality office spaces. By comparison, Brno’s vacancy rate stood at 11.6%.
Ostrava thus continues to be an important center for the office market in the region, with increasing opportunities for investors and tenants seeking modern and flexible workspaces.
Industrial Market
The Moravian-Silesian Region ranks among the most significant regions in the Czech Republic in terms of modern industrial and warehouse space availability. By the end of the second quarter of 2024, the region recorded a total of 1,176,500 m² of industrial space, ranking fourth in the Czech Republic behind Prague, the Pilsen, and South Moravian regions. In the first quarter of 2024, 35,100 m² of new space was completed, while there was no new construction completed in the second quarter.
The vacancy rate for industrial spaces in the Moravian-Silesian Region rose to 7.0% in June 2024, mainly due to the completion of new spaces and their gradual market introduction.
The second quarter of 2024 saw record demand in the Moravian-Silesian Region, reaching a historic high of 128,600 m², accounting for 30% of total demand across the Czech Republic. The largest transaction during this period was the pre-lease by BMW in the OSTRAVA AIRPORT MULTIMODAL PARK.
At the end of the second quarter of 2024, a total of 235,200 m² was under construction across six different sites in the Moravian-Silesian Region, with 20% of these spaces already pre-leased. Existing areas are owned by 12 development or investment companies, with CTP holding the largest share.
The base rent for new modern Class A spaces of around 5,000 m² ranges from €5.50 to €6.50 per m² per month. Smaller units under 2,000 m² are typically offered at around €7.00 per m² per month.
Retail Market
As of the end of June 2024, the total retail space in the region, including shopping centers, retail parks, and outlets, was 497,500 m². The largest shopping center in the region remains the Avion Shopping Park Ostrava, with a total area of 65,900 m².
The retail market has been dominated by retail parks in recent years. In the first half of 2024, only one new retail project was completed: S1 Center Krnov, covering 5,100 m², developed by Saller Group. This project further expands the availability of modern shopping spaces in smaller towns across the region.
Developer Traxial is currently constructing a new retail park, X Park Šenov, covering 2,200 m², with a grand opening planned for the end of 2024. Looking ahead to 2025, developers plan to open approximately 31,900 m² of additional retail space divided among seven retail parks. Among the largest planned projects are RP Pstruží, with a total area of 9,400 m², and RP Klenoska, with a planned area of 7,900 m².
Data Sources: Savills, Cushman & Wakefield