The development of motorway infrastructure will in turn have a significant impact on the industrial real estate market over the next ten years. New hubs of industrial activity are expected to emerge, while the importance of existing hubs in Europe, and Central Europe in particular, is expected to grow. Improved road connections with Germany, Poland, Austria and Slovakia will enable more efficient transport of goods and encourage the development of cross-border trade. This should lead to greater demand for storage and distribution centres strategically located along new transport corridors. "The evolution of the transport network will create opportunities for tenant investors looking for locations with excellent transport links to other Central European markets. This will enable the Czech Republic to play the role of transport hub more effectively; bringing new opportunities for logistics, warehousing and industrial production," says Josefina Kurfürstová, Senior Analyst at Colliers.

Positive developments already this year

The first major expansion of the motorway network will be seen as early as the end of 2024, when more than 100 km of new motorway sections are planned to open. The trend will continue in the following years, with plans to open an average of around 60 km of new sections per year for the next six years. It should be noted, however, that the further away the planned opening date is, the higher the likelihood of delays due to permitting processes and possible construction complications. The ambitious target of completing more than 450 km of new motorway sections by 2030 would represent an unprecedented expansion of transport infrastructure in the modern history of the Czech Republic.

New locations

According to Colliers, there is currently more than 12 million m2 of industrial space under construction in the Czech Republic, with a vacancy rate of around 3%. Demand for quality industrial space remains strong; particularly in major industrial hubs such as Prague, Brno, Pilsen and Ostrava.

As the motorway network expands, demand is expected to expand to new, previously less desirable locations. "With the gradual completion of new motorway sections, some secondary and developing hubs, such as Olomouc–Přerov or Jihlava, are expected to gain in attractiveness and may see an increase in demand for space and thus rents," predicts Josefína Kurfürstová.

This could also affect rental prices. In primary hubs such as Prague, this ranges from €7-7.50/m², while in secondary locations, €5.40-5.80/m² is common. This is where the potential for growth opens up.

The development of the motorway network will also open up new prospects for cities such as České Budějovice or the Vysoké Mýto and Litomyšl areas, which could become important logistics and industrial centres thanks to better connections to the national and international transport network. This transformation will undoubtedly attract the attention of developers and investors looking for opportunities in these newly emerging locations.

"Investors, developers and tenants should keep a close eye on the development of motorway infrastructure and be prepared to respond to new opportunities that will arise over the next decade. The Czech Republic has the opportunity to consolidate its position as a strategic location for industry and logistics in the heart of Europe, with the potential to attract new investment and support economic growth in regions across the country," summarises Josefina Kurfürstová.

Expansion of the motorway network

Ambitious plans envisage the opening of hundreds of kilometres of new motorway sections by 2030. Key projects include the following:

• Completion of the northern link between Prague and Ostrava (D11+D35+D1), which will relieve the congested D1 motorway
• Direct motorway connection to the Austrian border and Linz (D3)
• New connection to the Polish border and Wroclaw (D11)
• Significant development of motorways connecting regional border towns such as Chomutov (D7) and Karlovy Vary (D6)

There are plans to complete up to 118 km of motorways in 2025 alone; with a further 54 km under construction.

Major industrial hubs and rents (Q3 2024):

1. Primary hubs:

• Prague: €7 - €7.50/m².
• Pilsen: €5.80 - €6.40/m²
• Brno: 6.00 - 6.50 €/m²
• Ostrava: 5.40 - 5.90 €/m²

2. Secondary hubs:

• Ústí nad Labem-Chomutov: 5.40 – 5.80 €/m²
• Pardubice-Hradec Králové: 5.20 – 5.70 €/m²
• Karlovy Vary: 5.50 – 5.90 €/m²
• Mladá Boleslav: 5.80 – 6.50 €/m²

3. Emerging hubs:

• Olomouc-Přerov: 5.50 – 5.80 €/m²
• Jihlava: 5.40 – 5.90 €/m²
• Liberec: 6.40 – 7.00 €/m²

4. Prospective hubs:

• České Budějovice: 5.50 – 5.90 €/m²

Vysoké Mýto-Litomyšl: 5.20 – 5.80 €/m²