The vacancy rate in logistics and industrial grade A properties in the Czech Republic has decreased sharply in Q3 2010. After culminating one year ago in Q3 at more than 18% it dropped to sub 12% in Q3 2010.
There is currently 409,000 m² of modern class A warehouse space vacant in the Czech Republic. The sharpest decreases were recorded in West Bohemia from 20% to 10% and Moravia Silesia from 31% to 21%. However Moravia Silesia still has the second highest vacancy rate after Central Moravia. In Greater Prague the vacancy rate decreased from 17% to 14%.
Total stock of modern developer-led logistics and industrial space amounted to 3.43 million m² at the end of Q3 2010. New supply in Q3 2010 reached 74,000 m². Completed projects included Logistics Park Lovosice (42,000 m²) by HB Reavis, which is fully leased to ČD Cargo and CTPark Ostrava building 13.2 (28,400 m²). There is currently ca. 93,000 m² of modern class A warehouse space under construction.
Gross take-up reached 206,100 m² in Q3 2010, this is the same as last quarter but almost double compared to Q3 2009. Net take-up amounted to 139,900 m², 21% down on the quarter and representing an annual increase of 121%.
"Overall occupational activity was the highest in the Greater Prague area, however 62% of gross take-up was due to renegotiations of existing leases. On the other hand West Bohemia dominated for the second consecutive quarter in net take-up with 32% of new leases signed as tenants were attracted to this area by very favorable lease conditions," comments Lenka indelářová, analyst at DTZ.
The largest new lease in Q3 2010 was signed in CTPark Ostrava by brakes manufacturer Brembo (25,000 m²), followed by spare parts distributor Trost in Nýřany Orange Park (22,500 m²) and a lease to logistics provider Sumitomo in CTPark Plzeň (16,000 m²). Overall the largest transaction in Q3 2010 and in 2010 was the renegotiation of the logistics provider HOPI in Pointpark Prague D1 (45,800 m²).
End users (39%) were more active than third-party logistics providers (36%) in Q3 2010. Manufacturing companies signed 26% of new leases. "The types of new tenants show that the companies in many sectors are expecting positive future developments and that they are already prepared for commitments, signing long term lease agreements," adds Martin umera, Senior Industrial Agent at DTZ.
Average deal size increased to 7,360 m² in Q3 2010 compared to 5,871 m² in Q2, this is due to a few large deals within the quarter. Median deal sizes reached only 3,400 m² as opposed to 4,500 m² in Q2 2010.
Headline rents for modern logistics space have remained stable q-o-q at 3.6-4.3/m²/ month in Prague, and vary between 3.6-4.25 in the regions. The decrease of vacant space in West Bohemia also had an impact on rental levels. DTZ records that after rents dropped as low as 3.20/m² in this region last year, they have now increased to around 3.60-4/m². In locations with higher vacancy landlords still offer attractive incentives to tenants. It is forecasted that prime rents will start increasing during 2011.