Bratislava City Report Q4 2013

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Industrial Market

 
Supply

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. 

Demand

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.

Vacancy

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.

Rents

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.

Forecast

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.

 
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Industrial Market

 
 
Why Tri-City? 
Improving transportation network and good connectivity 
Access to the A1 motorway, the expanding ring road 
Regular and frequent flight connections with Polish and major and secondary European cities 
Improving railway connections with the major Polish cities, the urban fast railway, and the modernisation of the E65 railway line from Gdynia to Warsaw (by 2014) 
Developing seaports in Gdańsk and Gdynia 
 
Strong economy 
The Tri-City’s population is 748,000 people and the metropolitan area is home to more than 1.2 million people 
19,600 registered unemployed, which equates to a 6% unemployment rate 
Economy geared towards high technologies: outsourcing of business services, finance and IT in particular 
 
High quality labour force 
One of the major academic centres in Poland (28 higher education institutions, numerous research and development centres) 
Developing research, science and innovation centres 
95,000 students in theTri-City 
23,000 graduates per annum, including 6,000 finance and 900 IT graduates 
In addition to fluent English, which is a market norm, 68% of students speak German, 30% one of the Scandinavian languages, 15% Spanish and 12% Italian (according to a Hays Poland survey) 
 
Support from the municipal authorities and other institutions 
Investor Assistance Centre 
Special Economic Zone 
Gdańsk Scholarship Scheme 
Numerous institutions supporting the business sector locally, e.g. the Pomerania Development Agency, InvestGDA 
 
High quality of living 
Seaside location 
A city of vast cultural heritage and significant leisure facilities 
Developed residential and office markets, a variety of shopping and leisure centres, as well as a wide hotel base 
Planned road, seaport and airport infrastructure improvements 
 
 

Demand

447,000 m2 of distribution facilities were leased in Warsaw and its suburbs in 2012 (33% of total take-up in Poland), down 28% on 2011. Net take-up (excluding renewals) amounted to 264,000 m2. The major share of demand was focused in the suburbs of Warsaw with almost 229,000 m2 of space leased, whereas in Warsaw’s inner city, occupiers signed deals for 34,000 m2 (net take-up)..

Supply

The total existing warehouse stock in the Warsaw area amounts to over 2.5 million m2. Consequently, this is the leading region in terms of stock (35% of warehouse space in Poland), of which the majority of warehouse parks are located in the Warsaw suburbs (1.98 million m2). Parks built within the Polish capital city amount to 542,000 m2.

Vacancy

Warsaw and its suburbs are characterised by a relatively high vacancy rate. Within the city, approximately 91,000 m2 remained unoccupied and vacancy stood at 16.8%. In the suburban zone, the vacancy rate was slightly lower and reached 14.2% (281,000 m2 of non-leased space). In 2011, these rates stood at 12% and 17% respectively.

Rents

Warsaw and its suburbs create a diverse market in terms of rents. Warsaw’s city market is dominated by small business units (facilities combining warehouse and office space) where effective rents range from €3.60 to 5.30/m2/month. Significantly lower rents are recorded for parks in suburban areas with typical big-box warehouses at between €2.20 and 2.80/m2/month.

 



 
       

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Contacts



Mateusz Iłowiecki

mateusz.ilowiecki@eu.jll.com
+48 668 282 616
 
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