The third quarter of 2013 was one of the most active quarters on the industrial market since Q1 2012 in terms of take up and supply of new industrial space. Compared to more passive previous quarters, tenants were making decisions and signing new lease contracts on industrial and warehouse space and developers were able to finish new construction. The gross take up (which includes also prolongations of existing tenants’ lease contracts) was recorded at the level of 28, 106 sq m that is almost double compared to the previous quarter. From this, the net take-up, meaning the absorption of space that was previously vacant was at a level of 22,696 sq m - more than double compared to the second quarter of this year.
In addition to increased leasing activity, 19,560 sq m of new construction was completed. New developments were finished in the Bratislava region where development companies J&T and PointPark Properties built industrial space and also in the Kosice region where the company Immorent finished the construction of the second building of Immopark Košice. These projects were mainly turn-key developments, developed for specific tenants; however, the development in Košice was partly built as speculative construction that provides new vacant space in Košice region.
The vacancy rate in Q3 2013 decreased slightly to 4, 5 % from 4, 8% in Q2 2013. Even though the leasing activity in Q3 2013 was active, developers were able to satisfy this demand by newly completed constructions. The decreasing vacancy rate, however, is not a good sign on the market for occupiers and indeed, the vacancy rate in Slovakia is the lowest among the countries in Central Europe.
These trends were confirmed by statistical analyses prepared by Cushman & Wakefield.
"As we expected, tenants made decisions in Q3 2013 and signed lease contracts for 28,106 sq m of industrial space. The main leasing activity came from the production sector as well as wholesalers and logistics operators. This increased leasing activity was followed by the developers in terms of new industrial construction mainly in Bratislava and Košice regions. We expect that the vacancy rate will decrease further in the upcoming quarters which may motivate developers to start new speculative construction next year, " says Martin Balaz, head of the industrial team at Cushman & Wakefield Slovakia.