Bratislava City Report Q4 2013
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At the end of 2013, the A class industrial stock (excluding ancillary office space and owner occupiers) in the Slovak Republic totalled 1.22 million sqm. As seen in previous quarters, Greater Bratislava remains the largest industrial region with 68.4% of the total stock, followed by Western Slovakia (24.8%). Compared to Q3 2013, construction activity has decreased. However, the construction of 14,400 sqm in VGP Park Malacky was completed and potential tenants should be able to occupy the premises within 2 months. PointPark in Žilina continues to develop its second building (6,000 sqm), out of which, 2,400 sqm is already pre-leased to Geis and 3,600 sqm is being developed speculatively.
In Q4 2013, we recorded a gross take-up volume of 86,610 sqm and a net take-up volume of 18,135 sqm. Both values increased, yet gross take-up marked a significant change when compared to the 11,000 sqm in the third quarter. The largest transactions in Q4 included the contract renewal of Samsung in Prologis Park Galanta for a total area of 58,000 sqm and a renewal of 10,475 sqm in Bratislava Logistics Park owned by Falcon Fund. The fourth quarter also brought new expansions of existing tenants in: Autologistics Park Lozorno (6,500 sqm), Prologis Park Bratislava (7,435 sqm) and Logistics Center Prešov (1,700 sqm). We also recorded one new contract signed for 2,500 sqm in Logistics Park Rača. The ratio between net take-up and renewals in Q4 was in favour of renewals (18,500 sqm of new leases/expansions and 68,475 sqm of renewals).
Approximately 31% of the gross take-up was leased in the Greater Bratislava region while the Samsung renewal secured a 67% share for Western Slovakia. As interest in new premises continues, we assume an increase in future demand and also for built-to-suit facilities.
The vacancy rate at the end of 2013 marked a slight decrease to 5.54% compared to 6.3% in Q3. Current vacant space in the Slovak Republic is equal to 67,800 m2. Industrial parks in the Greater Bratislava region still possess the largest volume of available space (43,300 m2), followed by Western Slovakia (15,000 m2), Eastern Slovakia (8,500 m2) and Central Slovakia (1,000 m2). Similarly as in Q3 2013, there are 3 premises with more than 10,000 m2 of warehouse space available and 3 industrial buildings with an area availability of over 5,000 m2.
Prime headline rents achieved in Bratislava are at €3.30 - 4.20 m2 / month and at €3.80 - 4.20 m2 / month in Košice. For speculative development with partial pre-leases in the Bratislava region, rents are between €3.60 to 3.90 m2 / month, supported by rent free periods which are in the range of 6 to 9 months for new 5 year lease contracts.
Demand for new industrial premises will remain strong in the upcoming months. As the vacancy rate recently dropped again, we expect new construction activity from developers to fulfil clients′ demand for expansion possibilities. As proved in the fourth quarter of 2013, the renewals of lease contracts will be taking place, mainly due to the lack of possibilities for relocation at the present time.