CTP, Europe’s largest listed developer, owner, and manager of industrial and logistics properties by gross lettable area (GLA), has signed deals totalling 96,000 sqm at five of its logistics CTParks across the Czech Republic since the start of 2023. A range of factors including rising domestic consumption, strong economic growth and the trend for ‘nearshoring’ have led to multinationals continuing to expand their footprint in the country and the wider Central and Eastern European (CEE) region.
Since January, Dr.Max the rapidly expanding Czech headquartered pharmacy business, has taken 27,000 sqm on leases at two CTParks in the Czech Republic. It has signed for 15,800 sqm on a 20 year lease at CTPark Brno Lisen in the south of the country, where Dr Max will also open a pharmacy for the community of businesses at the park. Dr.Max has also leased 11,300 sqm at CTPark Ostrava Poruba for 5 years in the east of the Czech Republic. Dr.Max operates across the CEE region and Italy, with 17,000 employees and 2,500 pharmacies in countries including Poland, Slovakia, Hungry, Bulgaria and Romania as well as the Czech Republic.
Dr.Max is just one example of a multitude of CEE businesses that have benefitted from the fast growth of the region’s economies and middle classes in recent years. CTP published research last month, called ‘CEE: A Business-Smart Region’, that showed the region has shown strong resilience with real GDP growth outperforming Western European markets and the whole of Europe. This trend is set to continue as CEE GDP growth is forecast to grow twice as fast as the Eurozone average between 2023 and 2026. Fuelled by economic expansion, domestic consumption in the CEE has grown by almost 50% since 2010, more than double the rate of the EU-27 average.
The Czech Republic and the wider CEE are also benefiting from the ‘nearshoring’ trend among international businesses. In the first part of this year, a German provider of third-party logistics solutions (3PLs) has signed for 19,000 sqm of space at CTPark Žatec in the north west of the Czech Republic just 30km from the German border. While an Asian manufacturer of IT components has taken 50,000 sqm of space at CTPark Blucina in the south of the country, close to the Austrian border.
Nearshoring has been driven by the pandemic and a changing geopolitical environment increasing supply chain risk and in turn demand for manufacturing closer to home, where products consumed in Europe are increasingly made in Europe. In a recent survey MAERSK identified the Czech Republic as a global top 10 hotspot with Poland ranked in first place and Romania in second.