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 International, 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 supported by the Royal Institute of Chartered Surveyors (RICS).
The Industrial Research Forum is pleased to announce the final Industrial Market figures for Q1 2017.
New Supply in Q1 2017
In Q1 2017, industrial space totalling 162,400 sq m was completed within 10 industrial parks across the Czech Republic. Major completions include an additional hall at CTPark Bor totalling 40,700 sqm which was delivered partly on a pre-let basis (Weltbild), an extension of P3 Prague D11 of almost 39,000 sq m, partly pre-let to multiple tenants, and the first building of a brand new scheme CTPark Planá nad Lužnicí for Yanfeng Automotive Interiors (24,400 sq m). Speculative construction accounted only for 15% of all developments completed in the first quarter of 2017.
Total stock of modern industrial and logistics space increased to 6.47 million sq m.
Projects under construction
There was 396,500 sq m of storage and industrial space under construction at the end of Q1 2017. One third of that space is located in the Greater Prague area. Approximately 39% of the industrial construction pipeline is due for delivery in Q2 2017. The share of speculative development under construction decreased to 17% (down from 29% at the end of 2016).
Prime headline rents achieved in the Czech Republic remained stable during Q1 2017 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.
Total modern developer-led warehouse stock in the Czech Republic currently totals 6.47 million sq m. Approximately 161,200 sq m was newly delivered to the market in Q1 2017.
At the end of Q1 2017, the vacancy rate in the Czech Republic reached 4.7%, having decreased marginally by 4 bps since Q4 2016. This represents a total of 304,100 sq m of modern industrial premises ready for immediate occupation. Vacancy in Prague is in line with the country average at 4.7%, which represents an increase of 121 bps q-o-q.
During Q1 2017, gross take-up, which includes renegotiations, reached 305,300 sq m showing a decrease of 40% on the Q4 2016 figures. In comparison to the same period of last year, gross take-up decreased by 3%.
Net take-up in Q1 2017 totalled 238,800 sq m, representing a decrease of 22% compared to the previous quarter. Year on year it increased by 13%. Net demand in Q1 2017 was driven by manufacturing companies that were behind 59% of all new deals.
The share of renegotiations represents 22% of the Q1 2017 gross take-up.
Major Leases within Take-up
The largest new transaction in Q1 2017 was a new lease of 30,500 sq m for Sony DADC in Panattoni Pilsen Park West. The largest renegotiation of Q1 2017 was concluded by Flextronics, prolonging their 15,000 sq m lease in Starzone Pardubice.