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Loading - Czech Industrial Bulletin Q1 2010

At the end of the first quarter of 2010, total stock in the Czech industrial and logistics market totaled 3.355 million m2. This figure contains all the modern logistics and industrial buildings, defined as Class A, in the Czech Republic. Further, they are owned by the developers or investors and leased to third parties.

The decline in new construction across the industrial sector reached its lowest possible level, when, in the first quarter of 2010, not single warehouse or manufacturing facility was completed. There is now a trend to only construct after securing pre agreed tenants. Only 69,000m2 of new warehouse space was under construction in April 2010, with the majority of these spaces having pre-lease contracts signed. Although demand is reviving slightly, it is still not strong enough to allow speculative construction on a large scale. There are two exceptions – VGP is building approx. 7,000m2 in Hradec Králové and Outulný, a development company, is preparing 30,000m2 in Velká Bíteš.

In 2009, there was more than 443,000m2 of new modern industrial space completed. The graph below illustrates the decline in the Czech logistics and industrial market through the first half of 2008, when the market reached a peak, till the end of the first quarter of 2010, when no new space was completed.

Estimating the total amount of space to be completed throughout 2010 is difficult. Numerous developers have available, and serviced, land ready to construct units within a 6 month timeframe. Therefore, until Q3 2010, we will not be able to accurately predict this figure. However, we expect, that the total amount of space that will be delivered to the market throughout 2010 will be at half of 2009 (443,000m2). The increasing level of demand is expected to be predominantly satisfied in the existing vacant stock.

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Contacts

Milan Korbelář
Head of Industrial Agency, Prague Office
+420 224 234 809
Milan.Korbelar@kingsturge.com

Ondřej Novotný
Head of Research, Prague Office
+420 224 234 809
ondrej.novotny@kingsturge.cz

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