23. Februar 2012 Print
Industrial market in Central Europe exceeds 3 million sq m take-up in 2011
“Demand from organisations for high-quality logistics and manufacturing premises in Central Europe reflects the confidence in the market. Two to three years ago, the global market was overwhelmed with concerns and companies opted for postponing their plans for expanding or moving their manufacturing premises. The period of uncertainty has caused them to look for the most efficient solutions”, says Ferdinand Hlobil, Head of the CE Industrial Team, Cushman & Wakefield. “The Central European region has demonstrated a certain market stability; its other advantages undoubtedly comprise a relatively cheap labour force, geographic closeness to the stable Western European markets, and the consumer markets within this region, which may still grow”, Ferdinand Hlobil adds. The largest share of space leased in Central Europe was recorded in Poland, which made up almost 60% of the entire take-up last year. Growing interest was noted in all countries of the region, with the exception of the Czech Republic. The highest year-to-year increase in activities was seen in Slovakia where the take-up volume almost doubled as against 2010.
Last year’s development projects reflected a moderate revival; still the figure remains low as compared to the record-high years. While almost 2.5 million square metres were developed in the record-high year 2008, the figure was slightly over 800,000 sq m last year. Slovakia noted a higher activity rate as ten times more stock was developed last year (60,000 sq m) as against 2010 (5,000 sq m).
“All parties involved would welcome a revival of new development projects. There are only minimal available premises ready for immediate occupation in Slovakia, so those interested in their take-up faced limited options. The majority of new developments were reserved for pre-leases; however, for the first time since 2009, speculative development projects were also launched, and it even occurred in several locations at a time, including Eastern Slovakia”, says Martin Baláž, Head of the Industrial Letting Team in Slovakia.
Rent and its development
Rent volatility has been low over the past twelve months; the base rent today ranges between 3.5 and 3.7 Euros per square metre per month. In the most attractive locations, however, rent may grow faster as available premises are taken up. This applies especially to Slovakia where the ratio of available stock dropped under 5 per cent long ago. Where the vacancy rate is high, occupiers may enjoy various incentives from developers.
The vacancy rate had been declining in the region for the second year running and it reached an average value slightly in excess of ten per cent at the end of 2011. This figure represents a sound vacancy rate as supply and demand are balanced. “However, we are talking about average values for the entire region. The individual countries differ substantially with regards to this criterion”, says Ferdinand Hlobil, and he continues: “A drop under ten per cent should serve to stimulate new development projects. Developers have been waiting for that signal; however, the question remains whether those new development projects would find financial backing from the banks.”
While Hungary has more than one-fifth of premises available for rent vacant, the same figure has been fluctuating around the “unsound” five percent in Slovakia for the second year in succession. In Romania, the vacancy rate declined significantly by ten per cent, year-to-year, down to the current less than five per cent. The Czech Republic, too, has been heading towards such rates.
The Romanian industrial real estate market grew by approximately 100% in 2011, as total surface leased. “At the end of Q4 2011 we could have spoken of a transacted area of approximately 150.000 sq m compared to 75.000 sq m at the end on Q4 2010”, explained Gabriel Sfetcu, Head of Industrial Department at Cushman & Wakefield Romania. “In 2011 we had more requests from the production industry, in the same time we received requests from new-entry logistics’ operators, resultanting from mergers or separation of other operators already existing on the market.”
Outlook for 2012
“This year, we expect a continued moderate revival in new development projects, which has been stimulated especially by the low vacancy rate in the most attractive locations. On the demand side, the retail chains will probably further increase efficiency of their warehousing capacities, in order to ensure supplies for their shops. Also demand for manufacturing premises might continue, especially as regards automobile manufactures connected to the German economy. The market performance may remain approximately equal to the values recorded last year”, says Ferdinand Hlobil.