Development of the industrial market in Slovakia in the first quarter of 2011
4 May, 2011, Bratislava
Even though a new construction of industrial space for lease has started in Kosice region and another new Built to suite projects are planned in Zilina region, there was no new finished construction or development of new industrial property for lease recorded over Q1 2011 in Slovakia. The vacancy rate in this first quarter dropped on the level of approx. 3,7% in Slovakia, which is historically the lowest vacancy rate. This is caused by the fact that the leasing of existing space is not stagnating and on the other hand no new vacant premises are coming to the market.
In Q1 2011 approx. 22,000 sqm of modern industrial space for rent was leased in Slovakia. Developer ProLogis dominated the market in this quarter – they were responsible for almost 74 % of all space transacted. These trends are confirmed by statistic analysis prepared by Cushman & Wakefield.
Since the construction of speculative modern industrial space is still stagnating, the construction of the first Built to suite projects appear on the market in Eastern and Northern Slovakia. Since the vacancy rate is rapidly decreasing, we can expect more built to suite projects dedicated to logistics providers, distributors or production companies. There have still been vacant speculative development halls left on the market since the years 2007 - 2009; however, with decreasing vacancy rate, we can expect that pre-leases can be signed by tenants and developers and this fact might start the partly speculative construction where developers build larger spaces than the ones with already contracted tenants.
“We expect that some built to suite developments will be finished by the end of Q2 and new developments might start by the end of Q2-Q3. Since no speculative construction has started in Q1, we expect that the existing and vacant space will be leased in following months and the vacancy rate will go down. “ says Martin Balaz from Industrial Department at Cushman & Wakefield.
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