Published 15. 5. 2014

Industrial market keeps up the pace set last year

The statistics for the first quarter confirm the positive industrial space trend that started last year. Almost 300,000 sq m of industrial space was leased in the first quarter of 2014 alone. Last year, less than 200,000 sq m was leased in the first quarter. Such are the findings arising from the statistics which Cushman & Wakefield’s Industrial Team prepares on a regular basis.

The vacancy rate has increased by almost one per cent – it is now about 6.8 per cent whereas at the end of 2013 it was 6 per cent. The vacancy rate has increased primarily as a result of larger spaces being vacated in the Plzen and Hradec Kralove Regions.

“At 6.8 per cent, the vacancy rate is lower than Central European average, where this indicator is about a healthy ten per cent. We see room for new development primarily in the regions where vacancy rates are lower in general,” says Martin Baláž, Head of Industrial Letting at Cushman & Wakefield.

Development
New development slightly exceeded 78,000 sq m in the first quarter. This indicator was at 27,000 sq m in the same period one year earlier and almost 300,000 sq m of space was built in the full year 2013. “Developers are very agile. The first quarter figures confirm our expectations of development growing this year. By our estimate, new development this year will be almost comparable to 2013,” says Martin Balaz.

Active developers
Developers are more open to new development and new projects – examples include Technology Park Olomouc, Letnany Business Park, and Panattoni Park Stribro.
Other active developers such as Prologis, PointPark, Contera, Segro, VGP, and CTP have focused on the expansion of the existing projects and/or on acquisition.

Take-up
Since the beginning of the year, almost 300,000 sq m of space in modern halls has been leased, more than half of which (173,000 sq m) is attributable to new lease agreements. Prague accounted for the greatest portion of take-up in the first quarter (136,000 sq m) and has been a very stable market in the long-term perspective. The Plzen Region followed with 60,000 sq m, followed by Ostrava and Brno where take-up amounted to 40,000 sq m in either case.

Ostrava – an attractive region
Industrial space take-up in the Ostrava area grew to 42,000 sq m in the first quarter, primarily as a result of prolonged leases of major tenants. The trend in take-up in the Moravia-Silesia Region is illustrated in the graph below.

GRAPH – INDUSTRIAL SPACE TAKE-UP IN OSTRAVA REGION

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