Industrial Research Forum Announces the Final Industrial Market Figures for Q2 2014
The Industrial Research Forum was established by CBRE, Colliers, DTZ and JLL with the 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 final Industrial Market figures for the second quarter of 2014.
Industrial Stock & New Supply
The final figures compiled by the Industrial Research Forum show the total of 103,000 sq m of modern production and warehouse space been supplied to the Czech industrial real estate market during Q2 2014. This level of new completions is 55% above the Q1 supply levels and represents a 70% increase year-on-year. Together with the Q1 2014 completions, industrial premises totalling 169,000 sq m were completed during the first six months of 2014 showing an improvement of 57% y-o-y and bringing the total developer-led industrial stock in the Czech Republic to the current level of 4,637,200 sq m.
As was already reported by the Industrial Research Forum few weeks ago, another 160,000 sqm of modern industrial space is currently under active construction across the Czech Republic with speculative developments representing 15%.
The largest industrial facility intended for lease, which was completed so far this year was the research and development centre for FEI delivered by CTP in Brno (33,000 sq m). Considering the buildings in the construction pipeline this facility is likely to remain the largest development of 2014, unless the distribution centre for VF Corporation (39,000 sq m), which is being built in PointPark Prague D8 is completed ahead of schedule.
Prevailing portion of the Czech industrial stock remains housed in the Greater Prague area (1.81 million sq m), followed by the South Moravia region (773,000 sq m) and the Pilsen region (647,000 sq m).
Based on the data gathered by the Industrial Research Forum the gross take-up, which also includes renegotiations, amounted to almost 241,000 sq m in Q2 2014. This is 8% below the Q1 2014 gross take-up and 7% down compared to the demand recorded in the Czech Republic during the same period last year.
Almost half of the Q2 2014 gross take-up was made up by renegotiations of existing lease contracts. In exact figures, renewals represented 49% (117,000 sq m) and 64% of these renegotiations were signed by 3PL / logistic services providers.
Net take-up in Q2 2014 totalled nearly 124,000 sq m, showing only a 4% decrease compared to the previous quarter and 21% annually. Net demand in Q2 was driven by distribution companies (70%) mostly from the e-commerce sector.
During the first six months of 2014, the overall leasing activity (gross take-up) reached 502,000 sq m with net take-up representing 50%.
The largest leasing transaction of Q2 2014 as well as the entire H1 2014 is the pre-lease signed by VF Corporation for custom-built premises at PointPark Prague D8 (39,000 sqm). The second largest deal and the largest lease renewal of H1 2014 is Trost Auto Service Technik prolonging their contract at Panattoni Pilsen Park West in Nýřany (24,000 sqm), which was already concluded in Q1 2014.
Q2 saw the signature of two more significant lease renegotiations – DHL renewed their lease at CTPark Nový Jičín (20,000 sq m) and Sony DADC in Prologis Park Pilsen-Štěnovice (18,000 sq m).
The countrywide vacancy rate remained almost stable at 8.1% having increased only by 0.13 b.p. since Q1 2014. This represents 374,000 sq m of modern industrial premises ready for immediate occupation. Vacancy in Prague almost aligned with the country average, also reaching 8.0% at the end of Q2 2014.
The largest portion of the vacant premises (39%) is found in the Greater Prague area, which is not surprising given the largest inventory of industrial space in the country. Other Czech regions with high volume of existing vacant industrial premises are South Moravia (57,000 sq m) and Pilsen (44,000 sq m).