About the Industrial Research Forum
The Industrial Research Forum was established in 2010 with its aim to provide clients with consistent, accurate and transparent data about the Czech Republic industrial real estate market. The members of the Industrial Research Forum, CBRE, Colliers, Cushman & Wakefield and JLL, 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 Q4 2015.
New Supply in Q4 2015
In Q4 2015, industrial space totalling 153,300 sq m was completed within sixteen industrial buildings across the Czech Republic. Major completions include the built-to-suit (BTS) construction in Panattoni Park Stříbro for Kion Group (27,000 sq m), another BTS construction in VGP Park Plzeň for Faiveley Transport (21,700 sq m) and speculative construction of building 4 in “Logistické centrum Zelená Louka” (16,600 sq m) in Pardubice region. Speculative construction accounted for 22% of all construction completed in the final quarter of 2015.
In 2015, new supply totalled 563,000 sq m and represents the highest amount of new supply in a single year since the global financial crisis of 2008. This amount, however, remains over 400,000 sq m less than the record supply delivered in 2007. The total stock of modern industrial storage space increased to 5.69 million sq m.
Projects under construction
There was 303,500 sq m of storage and industrial space under construction at the end of Q4 2015. Of the space currently under construction 31% commenced in Q4 2015. Almost 40% of the stock under construction is due in Q1 2016. The share of speculative development increased to 38%.
Prime headline rents achieved in the Czech Republic remained stable during Q4 2015 and currently stand at 4.25 EUR/sq m/month. The rents for mezzanine office space stand at between 8.00-9.00 EUR/sq m/month. Service charges typically reach around 0.50-0.65 EUR/sq m/month.
At the end of Q4 2015, the vacancy rate in the Czech Republic reached 5.1%, having decreased by 56 bps since Q3 2015. This represents a record-low vacancy rate level, previously recorded in the pre-crisis period. There is currently 292,200 sq m of modern industrial premises ready for immediate occupation. Vacancy in Prague dropped below the country average reaching just 4.8% at the end of Q4 2015.
During Q4 2015, gross take-up, which includes renegotiations, reached 444,700 sq m in Q4 2015 showing an increase of 30% on the Q3 figures. In comparison to the same period of last year, gross take-up increased by 2%. The whole year gross take-up amounted to 1,394,300 sq m in 2015 and surpassed 2014 record level (1,383,900 sq m).
Net take-up in Q4 2015 totalled 201,700 sq m, which is 10% below the previous quarter. Year on year, it dropped significantly, while net take-up recorded 47% decrease compared to the same quarter last year. For the entire year, net take-up reached 875,600 sq m which is almost the same result as in 2014. Net demand in Q4 was driven by logistics companies (44%).
Share of renegotiations accounted for 37% in 2015, almost exactly the same share as in 2014 (36%).
Major Leases within Take-up
The large volume of renegotiations in Q4 2015 was encouraged by renegotiation of DHL Solutions in Prologis Park Prague Jirny (106,000 sq m). DHL Solutions also accounted for the largest new transaction in Q4 2015, while additionally extending their space in the same logistics park by another 30,900 sq m. The second largest new transaction was concluded by confidential client, who leased 21,900 sq m in CTPark Plzen. The third largest transaction of the quarter was represented by pre-lease of Okay in Velka Bites (15,000 sq m).