IRF market figures - Q1/2016
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 Q1 2016.
New Supply in Q1 2016
In Q1 2016, industrial space totalling 84,300 sq m was completed within seven industrial parks across the Czech Republic. Major completions include the built-to-suit (BTS) construction in Prologis Park Prague Jirny for Globus (33,500 sq m), another BTS construction in CTPark Kvasiny for an undisclosed manufacturing company (10,600 sq m) and BTS construction as well in CTPark Modřice for MEGATECH Industries Hlinsko (10,500 sq m). Speculative construction accounted only for 6% of all construction completed in the first quarter of 2016.
Projects under construction
There was 255,600 sq m of storage and industrial space under construction at the end of Q1 2016, most of it in the Greater Prague area. Of the space currently under construction 8% commenced in Q1 2016. 82% of the stock under construction is due for delivery in Q2 2016. The share of speculative development increased to 41%.
Prime headline rents achieved in the Czech Republic remained stable during Q1 2016 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 Q1 2016, the vacancy rate in the Czech Republic reached 4.2%, having decreased by 96 bps since Q4 2015. This represents a record-low vacancy rate level, previously recorded in the pre-crisis period. There is currently 240,900 sq m of modern industrial premises ready for immediate occupation. Vacancy in Prague dropped below the country average reaching just 3.1% at the end of Q1 2016.
During Q1 2016, gross take-up, which includes renegotiations, reached 313,600 sq m showing a decrease of almost 30%
on the Q4 2015 figures. In comparison to the same period of last year, gross take-up increased by 29%.
Net take-up in Q1 2016 totalled 210,900 sq m, which is 5% above the previous quarter. Year on year it increased by 8%. Net demand in Q1 2016 was driven by retail companies (45%).
The share of renegotiations reached 33% of quarterly gross take-up.
Major Leases within Take-up
The largest new transaction in Q1 2016 was concluded by a confidential client, who signed a pre-lease 73,100 sq m in Panattoni Park Cheb. The second largest new transaction was represented by a pre-lease of an undisclosed manufacturing company in a brand new logistics park CTPark Aš (22,400 sq m). The largest renegotiation of Q1 was concluded by Grupo Antolin Bohemia, renewing its 21,700 sq m lease in P3 Liberec.