Industrial Research Forum Announces Preliminary Industrial Market Figures for Q3 2014
About the Industrial Research Forum
The Industrial Research Forum was established by CBRE, Colliers, DTZ and JLL with its aim to provide clients with consistent, accurate and transparent data about the Czech Republic Industrial Market. The members of the Industrial Research Forum share non-sensitive information and believe the establishment of the Industrial Research Forum will enhance transparency on the Czech Industrial market.
The Industrial Research forum is pleased to announce the preliminary Industrial Market figures for Q3 2014.
New Supply in Q3 2014
According to the Czech Industrial Research Forum, the strong levels of construction activity, which has been typical for the Czech industrial real estate market since the last year, were maintained during Q3 2014. The number of new projects delivered to the market amounted to 102,100 sq m in Q3 2014 and the total developer-led industrial stock in the country increased to 4,773,400 sq m.
For the first three quarters of 2014, new supply reached almost 271,200 sq m which is 17% stronger than the same period in the record year of 2013 and 58% higher than Q1 – Q3 2012 levels. The market is still driven by non-speculative construction, although the number of speculatively built spaces is increasing. Out of all of the premises delivered between January and October 2014, approximately 77% were leased prior to completion.
For the year end, it is expected that new deliveries will reach over 300,000 sq m which will surpass the record levels of 2013 (269,000 sq m) and will make 2014 the strongest year, in supply terms, in the post-crisis period.
Among the major newly built projects completed throughout the quarter, are the fourth building of D+D Park Kosmonosy (26,000 sq m) by D+D Real, partially let to Škoda, and new premises for Johnson Controls in CTPark Bor, comprising 12,400 sq m of industrial space. On the owner-occupation side, which is not accounted for in the developer-led industrial stock, the completion of a 26,300 sq m industrial building for Steelcase in Panattoni Park Stříbro is worth mentioning. On the refurbishment side, Charnwood delivered the first phase of Westgate Park Rudná (23,800 sq m).
Projects under construction
According to the data gathered by the Industrial Research Forum, the total of industrial space under active construction in the Czech Republic during Q3 2014 increased to over 221,300 sq m. Almost 83% of the projects are built non-speculatively. One of the few officially speculative projects is currently the first building of Prologis Park Prague Airport with a total size of 29,900 sq m.
For Q4 2014, the Industrial Research Forum estimates that out of all the schemes under construction, the number of completions will reach only 35,000 sq m and the remainder of the space will be delivered in the first nine months of 2015. The largest project to recently commence construction is a new warehouse for Amazon which is being built near to Prague Airport and will comprise about 100,000 sq m.
In the course of Q3 2014, the number of projects on hold amounted to 38,000 sq m. These are the schemes where construction had started and had then been stopped until a tenant is secured.
Prime headline rents achieved in the Czech Republic remained stable during Q3 2014 and currently stand at 4.25 EUR/sq m/month. The rents for mezzanine office space stand between 8.00-9.00 EUR/sq m/month. Service charges typically reach around 0.50-0.65 EUR/sq m/month.
Further market data including take-up and vacancy will be published by the Industrial Research Forum in two weeks’ time.