Solar power plant – illustrative photo.
Prague – The market for land for industrial use is experiencing a change. Developers are trying to push for a price reduction of 20 to 30 percent and are withdrawing from projects, on the contrary, the interest of investors in renewable energy sources is growing by tens of percent, which is being “charged” by the new, more liberal legislation. This follows from the information of the consulting company 108 Agency, which is available to ČTK.
Last year, the company 108 Agency mediated transactions of more than 500,000 square meters of development land for about one billion crowns. Michal Diviš from the investment department of the ČTK company said that the volume was at the same level year-on-year. “It is holding high. The first half of the year was great, but it broke in September and there was a noticeable weakening of demand from traditional buyers,” said Diviš.
The company reports that developers of industrial halls have started withdrawing from pending purchases or postponing them. The increase in the interest rate caused many of them to stop working on their economic plans. According to Diviš, the price of prepared industrial land varies depending on the location on average in the range of 1,500 to 2,500 CZK per square meter, while the premium group includes Prague, Brno, Pilsen and Ostrava, where the price can be significantly higher.
“Now there is a lot of pressure from developers to drop the price by 20 to 30 percent, which the owners don't want to hear about. So far, it looks like the transactions are on hold and waiting,” Diviš stated.
However, the lack of purchases by developers is beginning to replace the interest of investors in renewable energy sources, mainly photovoltaics. According to Diviš, interested parties are ready to buy plots of any size and practically anywhere where there is a sufficiently high-capacity transmission system with pre-approved loans or straight equity. The reasons lie, among other things, in state support caused by the energy crisis and the commitments of the European Union to increase the share of electricity production from renewable sources, Diviš added. According to him, the solar transaction will dominate the market this year.
At the same time, land prices for photovoltaics are cheaper than for the construction of industrial halls, which need more preparation. According to Diviš's estimate, prices range from 400 to 600 crowns per square meter. However, there are also more expensive offers on the market for 800 to 1000 crowns per square meter.
Regrouping on the side of buyers according to the company 108 Agency, which has been focusing on commercial real estate on the Czech, Slovak and Hungarian markets since 2009 , was also reflected in the size of purchased parcels. Developers aimed for areas from five to roughly 30 hectares, end users are most often looking for plots with an area of 5,000 square meters to three hectares.