In the Czech Republic, the total area of modern industrial premises intended for rent in the Czech Republic increased to 9.49 million square meters in the third quarter of 2021. A total of 176,600 square meters of warehouse space in 12 industrial parks was completed. Compared to the same period of the previous year, this is a 16 percent increase, with 68 percent more areas being completed quarter-on-quarter. At the time of its completion, approximately 94 percent of the projects had already been pre-leased.
The largest newly opened industrial hall is a building with a total size of 62,100 square meters, located in the CTPark Bor complex. At the time of completion, the hall was fully occupied by an unpublished manufacturing company, as well as the second and third largest completed buildings: a 21,400 square meter hall at Prologis Park Prague - Úžice and a 16,300 square meter hall at Panattoni Park Stříbro.
Construction is running
At the end of the third quarter of 2021, nearly 897,300 square meters of warehouse and manufacturing space was under construction, up 33 percent from the previous quarter. Of the total volume of areas under construction, 25 percent is located in the Olomouc Region, 19 percent in the Moravian-Silesian Region and another 12 percent in the South Moravian Region. In the third quarter of 2021, construction began on halls with a total area of 344,900 square meters, of which 186,700 square meters in the Olomouc Region, where Amazon's new distribution center is growing. The share of industrial premises under construction without a pre-secured tenant, ie the share of speculative construction, rose to 26 percent in the third quarter.
Gross realized demand, including renegotiations, totaled 495,500 square meters in the third quarter of 2021, which represents a 6.5 percent decrease compared to the previous quarter. This is a significant increase of 60 percent in the year-on-year comparison of third quarters.
Compared to the previous quarter, the share of renegotiations fell by 17 percentage points from 27 to 10 percent, a year-on-year decrease of 36 percentage points.
Net demand reached 447,800 leased square meters in the third quarter of 2021, up 15 percent from the previous quarter. Compared to the same period last year, there was an increase of even 171 percent. The main driver of new demand in the third quarter of 2021 were distribution companies, mainly from the e-commerce industry, which accounted for 46 percent of the volume of newly signed contracts, followed by logistics companies with a 21 percent share.
The largest transaction in the third quarter of 2021 was the pre-lease of the hall for the e-commerce distribution center of the giant Amazon in Panattoni Park Kojetín with a total size of 186,700 square meters. The second largest lease transaction was the renegotiation with a total size of 30,500 square meters in the Euroform Trmice park, which was concluded by the production company StanleyBlack & Decker. The third largest lease was realized in CTPark Cheb, where the future tenant will be the logistics company DHL with a size of 22,800 square meters.
The vacancy is falling…
In the third quarter of 2021, the vacancy rate fell again to an average of 2.5 percent, a decrease of 37 basis points from the previous quarter and a decrease of 209 basis points compared to the same period last year. At the end of the third quarter of 2021, there were a total of 234,800 square meters of modern industrial space on the market, ready for immediate occupancy. The vacancy rate of industrial premises in Prague and its immediate vicinity rose by 64 basis points to 2.0 percent. However, if we excluded office space from vacancy and also space rented for a short period (up to one year), the vacancy rate would be lower. In some regions, such as Prague, very significantly.
And rents are rising
The highest achieved rent of industrial and logistics real estate, the so-called prime headline rent, in the Czech Republic during the third quarter of 2021 rose again to the level of 5.20 euros / square meter / month, in Prague and its surroundings to 5.50 euros / square meter /Moon. The amount of rent for office buildings reached 8.50 to 9.00 euros / square meter / month. The usual amount of service fees ranged from 0.50 to 0.65 euros / square meter / month.