The Current State of Czech Construction Permitting

A recent CEEC Research survey highlights critical issues with the Czech Republic’s digital construction permitting system. City representatives have rated its functionality at a mere 3.40 out of 10, indicating a widespread lack of effectiveness. This digital transformation, intended to streamline processes, is instead proving to be a substantial hurdle to development across the country.

Direct Impact on Commercial Real Estate Development

The sluggish permitting process has tangible consequences for the commercial real estate sector. Approximately 43% of survey respondents reported minor delays due to the system, while a significant 22% stated it actively hinders key projects and territorial development. For businesses looking to rent or develop new office buildings or warehouse facilities, these delays translate into longer lead times for new constructions, potential hold-ups in fit-outs, and a tighter supply of modern, readily available spaces. This can directly impact business expansion plans and operational readiness.

Broader Economic Repercussions

The ramifications extend beyond project timelines. Dušan Kunovský, Chairman of the Board of Central Group, emphasized that the problematic launch of the new construction law and digitalization is actively damaging the Czech economy. It is impeding general development, exacerbating the existing housing crisis, leading to significant tax losses, and complicating the overall business environment. These broader economic challenges can influence investor confidence and the overall stability of the commercial real estate market.

Navigating the Permitting Landscape: What Businesses Need to Know

Despite the current challenges, there is a clear understanding of what is needed to improve the situation. Officials are largely seeking clear step-by-step methodologies (61%) and practical training (44%) to enhance the process, which affects all management phases. For businesses, this means strategic planning is paramount. When considering new office or warehouse space in the Czech Republic, it is crucial to factor in potential permitting delays for new builds or significant renovations. Engaging with local real estate experts who possess deep knowledge of the permitting process and local market conditions can help mitigate risks and identify suitable, available properties more efficiently.

Source: property-forum.eu