Czech industrial market development in 1+2Q 2008
5 Aug, 2008, Czech Republic
As expected, the Czech Republic is experiencing a slight slowdown/market stabilisation by mid 2008, according to the results for the first six month of 2008. From January to June 2008, approximately 333,000 sqm of modern industrial space for rent were built in the Czech Republic, while 315,000 sqm were rented and handed over to occupiers. In the first six month of 2007, 427,000 sqm of facilities were developed and 385,000 sqm were rented and handed over.
This represents a 22% year-to-year drop in construction and a 18% year-to-year drop in renting.
"If the current trend doesn't change in the second half of 2008, we can label 2007 as a record year in the industrial real estate market.The market stabilisation has been driven by several factors including the improving local currency and the higher level of prudence on the real estate market.Developers face problems with getting credit from banks, new tenants think more about whether they want to place operation in Czech or another Easter European country," says Ferdinand Hlobil, Head of the CEE industrial team at Cushman & Wakefield.
In the first half of 2008, the vacancy increased to 11% (country-wide average), while by the end of 2007, only 6% of the space for rent was vacant. The highest vacancy rate growth was reported in Prague-East and Plzen regions (up to 17%) due to massive and speculative developments. In those two localities, over 170,000 sqm were built which is slightly above half of the total developments in the Czech Republic in the previous six month.
See graphs on the following page.
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