Central Europe industrial real estate market has stabilised, says Cushman & Wakefield
The industrial real estate market in Central Europe has reached equilibrium, according to the latest annual study on the region by Cushman & Wakefield.
Availability of space has maintained a healthy 10.5 per cent for two years and the volume of new construction amounted to 740,000 square metres last year, with new construction taking place in Poland in particular.
“The capacity of the market with regard to new construction in Central Europe is estimated at between 500,000 to one million square metres a year. Such an amount of modern logistic and production halls needs to be built every year. Only then will there be a natural renewal of the premises offered, and companies that are newcomers to the market or that expand their operations will have premises to choose from when they want to lease,” says Ferdinand Hlobil, head of CEE industrial team at Cushman & Wakefield.
In 2012, new construction was concentrated mainly in Poland (514,000 sq m) and partly in the Czech Republic (106,000 sq m) and Slovakia (82,000 sq m). In Romania and Hungary, new construction amounted to only about 20,000 sq m. The most active developers in the region were Panattoni, Goodman, Prologis, CTP, and SEGRO.
“The first five companies ensured 70 per cent of all new supply. With the exception of CTP, they are strong international players active in the majority of European countries,” says Hlobil.
In 2012, there were a total of 2.8 million square meters of modern industrial halls leased in the region (the Czech Republic, Hungary, Poland, Romania, and Slovakia), of which more than half were in Poland (1.5 million sq m) and roughly one-quarter in the Czech Republic (670,000 sq m ). The average for the past five years amounts to 2.7 million square metres a year, which means that last year was slightly above average. A record volume of leases was historically reached in 2011, when a total of 3.2 million square metres were leased in the region.
“With just under half of total modern stock in the region being located in Poland, the industrial market is continually expanding with new phases of existing parks as well as new locations opening up as a result of recent improvement in road infrastructure. Although leasing activity for 2012 fell short of figures recorded in 2011 it is important to note that new developments and space coming on to market last year was up by nearly 25% compared with 2011, a very positive sign that the major industrial developers see further growth potential in the Polish market and will look to continue to develop new warehouse schemes to satisfy tenant demand,” says Tom Listowski, partner, head of industrial in Poland & CEE corporate relations, Cushman & Wakefield.
In the region, there are over 15 million sq m of modern premises, of which 10.5 per cent remains available to be leased (approximately 1.6 million sq m). This is an average for the whole region, with the differences between the individual countries.
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