Supply down on Czech Industrial market

This level of supply represents a 21 pct decrease compared to the same period of the previous year and a decrease of 3 pct in comparison with the previous quarter.

The total modern warehouse stock now stands at 7.97 mln sqm.

Major completions included a 56,300 sqm building in Ostrava Airport Multimodal Park, of which 65 pct has been already leased. The second largest building to be completed (23,500 sqm) is in the Goodman MladáBoleslav Logistics Centre, which is fully pre-leased by an undisclosed manufacturer. The second half of a building in PanattoniPark Prague Airport II, with 21,700 sqm, represents the third largest completion of the quarter. The building will be occupied by logistics provider Panalpina.

At the end of the quarter, the total new supply under construction in the Czech Republic came to 521,700sqm. Around 18 pct of that space is in the Greater Prague area. During Q1 2019, development work began on 42 pct (i.e. 220,400 sqm) of the total space that is currently under construction across the country. Around 39 pct of the industrial construction pipeline is due for delivery in Q2 2019. The share of speculative floor space under construction has currently increased to 56 pct.

Gross take-up over the period, which includes renegotiations, reached 384,700 sqm showing up by 24 pct on Q4 2018. In comparison to the same period of the previous year, gross take-up decreased by 6 pct. Over Q1 2019, the share of renegotiations came to 28 pct. Net take-up in Q1 2019 totalled 277,400 sqm, showing an increase of 48 pct on the previous quarter’s figures, while y-o-y net take up was up by 53 pct. Net demand in Q1 2019 was driven mainly by manufacturing companies (57 pct).

The largest new transaction in Q1 2019 was a pre-lease of 18,500 sqm by DB Schenker in the Finapra Mnichovo Hradiště park. The second largest transaction was a new lease of 16,200 sqm by DHL Supply Chain in Prologis Park Prague D1 West II.The largest renegotiation in Q1 2019 was concluded by an undisclosed logistics company, for 22,000sqm lease in Prologis Park Prague D1 West.

Over the period the vacancy rate came to 4.8 pct, an increase of 41 bps since Q4 2018. This represents a total of 380,300 sqm of modern industrial premises ready for immediate occupation. Vacancy in Greater Prague industrial market reached 4.1 pct at the end of Q1 2019. Prime headline monthly rents increased slightly over the period and currently stand at EUR 4.60 per sqm. Rents for mezzanine office space stand at between EUR 8.50 and 9.00 per sqm. Service charges typically reach around EUR 0.50 to EUR 0.65 per sqm.