Firms trust the economy and prolongs leases in industrial halls
The second quarter of 2014 in the Czech industrial market was characterised by the lease extensions. On a national average, existing lease extensions accounted for more than one half (56 per cent) of all take-up. In Prague, the figure is more than 66 per cent. Such are the findings of Cushman & Wakefield’s Industrial Team.
“The fact that companies prolonged their leases in currently leased premises reflect their trust in the Czech economy. Both manufacturers and logistic operators expect that their goods and services will continue being in demand,” says Ferdinand Hlobil, Head of Cushman & Wakefield’s CE Industrial Team.
The development of modern industrial space is gaining momentum. More than 120,000 sq m of industrial units were built in the first half of the year (this was 108,000 sq m in the same period last year). Out of that, more than one half were built in equal parts by three developers – PointPark Properties, Prologis, and Panattoni (each about 23,000 sq m). Several projects are currently in the pipeline, slated for completion by the end of the year.
The two biggest facilities completed and commissioned in Q2 are a unit for DHL (18,000 sq m) at CTPark Mlada Boleslav and a unit for Ideal Automotive (17,000 sq m) at Panattoni Park Stribro.
570,000 sq m was leased in the Czech Republic in the first half of this year (of which 220,000 sq m were in Prague), 100,000 sq m up from the same period last year (472,000 sq m).
“For regions outside of Prague, we are seeing take-up increase primarily in Ostrava where 120,000 sq m was leased, and in the Plzen region where 95,000 sq m has been occupied. We are most happy about the increasing demand for Ostrava, which started growing in the latter half of last year. Ostrava has a lot to offer, be it in terms of the proximity of the Polish and Slovak markets or in terms of the available workforce and a number of technology-oriented universities,” says Ferdinand Hlobil.
The vacancy rate in the Czech Republic has decreased slightly to the current 6.5 per cent. This means that, out of the existing 4.7 million sq m of modern space for lease, just 305,000 sq m is vacant. The Liberec region differs greatly from the average, with the vacancy rate being currently at zero. This is why we expect new development – including speculative – to start fairly soon in the region.
“We expect this year to slightly lag behind last year in terms of take-up and development. That being said, last year broke records in terms of take-up – it was the first time in history that more than one million sq m was leased. We rate today’s volume of development and take-up as very active,” Ferdinand Hlobil says.
GRAPH: TAKE-UP IN THE OSTRAVA REGION
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