Published 14. 5. 2012

Vacany has grown for the first time since 2009

The percentage of vacant industrial space available for lease amounted to 8.2 per cent in the first quarter of 2012. This is the first time it has grown since the second quarter of 2009. Despite that, it remains quite far from the limit of 10 per cent, which is where supply and demand is deemed to be in balance. The percentage of vacant space has grown across the board, and most notably in Brno.

“The South Moravian Region is the only region in the Czech Republic where the percentage of vacant space has exceeded 10 per cent. Approximately 140,000 sq m of new industrial space was built in Brno in last year alone. This means an increase in the amount of modern industrial space in the region by 26 per cent within the space of a single year. And vacant space has been leased successfully on an ongoing basis. Development in the vacancy rate in the Czech Republic this year will depend primarily on the stability on the demand side,” says Jaroslav Kaizr, Head of the Industrial Lettings Team at Cushman & Wakefield in the Czech Republic.

New development
New development amounted to almost 17,000 sq m in the first quarter. Compared with the last quarter of last 2011 this is a major drop (approximately 130,000 sq m was built in Q4 2011). However, there was no fluctuation in year-on-year terms, with almost 14,000 sq m built in the first quarter of 2011. Approximately 11,000 sq m came from CTP in Teplice and in Plzen, and the remaining 6,000 sq m came from VGP in Horni Pocernice.

“At this point, the developer CTP is building a new hall for ABB in Ostrava, and other projects are in the pipeline in Olomouc, Brno and Plzen. Their developers plan to launch the projects by the end of the year, but this of course depends on pre-lease agreements being in place. We do not expect them to start development on a speculative basis. We believe the development of cutting edge industrial space this year will be lower than in last year,” says Jaroslav Kaizr.

Take-up
The amount of take-up was similarly stable. More than 155,000 sq m of modern industrial space was leased in the first quarter of this year. In the same period last year, it was more than 159,000 sq m, and in 2010 this was a comparable 141,000 sq m.

“The greatest take-up was in Prague where about a third of all deals took place. The situation in Plzen was similar, and the demand for other regions was lower. For the second quarter, we do not expect the take-up to be as high as it was in the same period last year. The stability of the economic environment in our country and in Europe will determine a lot in the rest of the year. If the economic situation is stable, the take-up realised might amount to last year’s levels, but we believe that amount is the limit and we do not expect it to be outperformed,” says Jaroslav Kaizr.

“The activity in the market for land is of some interest. There have been several major deals on the industrial property market after several years. The developer Goodman bought industrial land in Mlada Boleslav and is building a new hall of approximately 21,000 sq m based on pre-lease with a manufacturer SAS. Along the same lines, the developer VGP has purchased land in Plzen,” Kaizr says.

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