According to statistics gathered by global property adviser DTZ, only 8,100 m² of logistics space was completed in Q4 2009, representing a 90% drop y-o-y in developers' activity mainly caused by reduced demand from manufacturing and logistics companies. During 2009, ca. 432,000 m² of new industrial and logistics space was completed, which was a 37% drop as compared to 2008.
Gross take-up (including renegotiations and relocations) reached ca. 108,000 m² in Q4 2009, which corresponds to a 40% y-o-y decline. The most significant transactions in the last quarter of 2009 included: 10,600 m² leased by an unnamed manufacturing company in VGP Park Dobrenice at Hradec Kralove, the LGI lease in ProLogis Park Jirny (ca. 9,000 m²) and the Kwesto lease of 7,100 m² at CTPoint Jihlava. Overall 2009 total gross take-up amounted to 380,200 m², which is a 51% decrease as compared to 2008.
"Net take-up excluding renegotiations and relocations reached 77,000 m² in Q4 2009, a 16% increase compared to Q3 2009. In 2009 the total net take-up reached 275,000 m²," adds Lenka Hartmanova, Consultant at DTZ.
During 2009, the Greater Prague area dominated gross take-up with more than half of the total volume (60%), followed by south Moravia (17%). End-users dominated demand for logistics premises, followed by 3PL's.
"This year we expect, as compared to last year, increased activity from foreign investors and in particular manufacturing companies. FDI inflow will primarily concentrate into regions with good accessibility and higher unemployment, with investors showing more interest at leasing properties as opposed to buying them, as has been the case in the past," comments Martin Sumera, Senior Industrial Agent at DTZ who predicts further stabilization in 2010.
Total stock of modern developer-led logistics and industrial space amounted to almost 3.5 million m² in the Czech Republic at the end of Q4 2009, of which nearly half is located in the Greater Prague region. There is currently ca. 64,000 m² of modern class-A warehouse space under construction, the only significant project is the fully pre-let Logistics Park Lovosice (42,000 sq m) developed by HB Reavis.
The overall national vacancy rate decreased slightly to 17.3 % in Q4 2009. The highest vacancy rate of modern newly developed warehouse space remains in West Bohemia (26%) and MoraviaSilesia (21%). The vacancy rate in Greater Prague is at ca. 18%.
"The vacancy rate remains high at the end of 2009 despite an almost complete halt of development activity. This is primarily caused by low levels of new demand and the exit, relocation or decrease of rented space by some tenants," adds Lenka Hartmanova.
Headline rents for modern logistics space have remained stable q-o-q at 3.6-4.3 per sq m/ month in Prague, in the regions rents vary between 3.2-4.25 per m²/ month. The year on year comparison of headline rents indicates a 6.5% decrease. DTZ forecasts that headline rents will remain stable during 2010.