Industrial Research Forum Announces the Final Industrial Market Figures for Q1 2020
Both global and local real estate markets are affected by the Covid-19 pandemic and the adopted measures. The situation is changing dynamically and currently no predictions can be treated as accurate. While Q1 2020 seems to be a slightly weaker quarter in terms of take-up volumes, however, we expect the true impact to be visible during Q2 and beyond.
Total Stock & new supply
Total modern developer-led warehouse stock in the Czech Republic currently accounts for almost 8.62 million sq m. Approximately 211,100 sq m was newly delivered to the market in Q1 2020 within 12 industrial parks across the Czech Republic, showing a 37% increase compared to the same period in the previous year and increase by 31% in comparison with the previous quarter.
Major completions include a 61,000 sq m building in P3 Lovosice which was at the time of completion 44% leased. The second largest completion was in Ostrava Airport Multimodal Park (48,900 sq m) which was partly pre-leased by 3PL company GEIS. The third largest completion includes an additional building in Prologis Park Prague-Úžice (21,300 sq m) which was delivered on a speculative basis.
Projects under construction
At the end of Q1 2020, the total stock under construction in the Czech Republic amounted to 541,300 sq m. Approximately 24% of that space is situated in the Moravia-Silesia region and 23% is located in the Pilsen region. During Q1 2020 development works commenced on 84,200 sq m of industrial space. The share of speculative floor space under construction has decreased to 28% during the quarter.
During Q1 2020, gross take-up, which includes renegotiations, reached 270,400 sq m showing a slight decrease of 5% compared to Q4 2019 figures. In comparison to the same period of the previous year, gross take-up decreased by 25%. During Q1 2020, the share of renegotiations accounted for 65% which is a significant increase compared to the previous quarter (12%).
Net take-up in Q1 2020 totalled 93,600 sq m, showing a significant decrease of 63% q-o-q and y-o-y. Net demand in Q1 2020 was driven mainly by distribution companies (39% share on net take-up).
Major Leases within Take-up
The largest new transaction in Q1 2020 was a new lease of 25,100 sq m in P3 Lovosice, signed by an undisclosed distribution company. The second largest transaction was a new lease of 7,900 sq m in CTPark Žatec, signed by an undisclosed manufacturing firm. The largest non-confidential transaction includes a new lease of 6,900 sq m in P3 Prague Horní Počernice, signed by 3PL company DB Schenker. The largest renegotiation in Q1 2020 was a prolongation of 20,900 sq m in Prologis Park Prague D1 West, signed by an undisclosed 3PL company.
During Q1 2020, the vacancy rate in the Czech Republic reached 5.5%, showing an increase of 144 bps in comparison with the previous quarter. This represents a total of 476,400 sq m of modern industrial premises ready for immediate occupation. Vacancy in Greater Prague reached 3.9% at the end of Q1 2020.
Prime headline rents achieved in the Czech Republic remained stable during Q1 2020 at 4.6 EUR/sq m/month. The rents for mezzanine office space stand at between 8.50-9.00 EUR/sq m/month. Service charges typically reach around 0.50 – 0.65 EUR/sq m/month.