development of the industrial market in slovakia q4 2013 - vacancy rates are decreasing again

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The industrial market at end of 2013 was influenced mainly by prolongations of existing leases. This is positive in that it signals a longer term commitment of these occupiers to Slovakia. On the other side, only a small number of companies decided to open new operations or expand existing ones. On the whole market approx. 85,549 sqm was leased of which new leases constituted only 14,020 sqm with the rest being extensions of existing leases. The numbers are comparable to the end of 2012 when approx. 99,000 sqm of industrial space was leased.
Overall, 2013 with a gross take up of 229,642 sqm was more active compared to 2012 when 198,164 sqm of industrial space was leased.

While the leasing activity in 2013 was more active, development companies delivered only limited numbers of new industrial buildings to the market. Only 31,560 sqm of new industrial premises were delivered to the market by developers which is a very significant decrease compared to 82,000 sqm in 2012. The slower construction activity was caused mainly by the fact that development companies decided not to start a speculative construction on a larger scale as the market was still absorbing the speculative construction that was completed at the end of 2012. Most of the industrial construction delivered to the market in 2013 was therefore built for tenants on a build to suit / pre-lease base.
The combination of increased leasing activities and reduced speculative construction resulted in a significant decrease in the vacancy rates. The vacancy rates decreased sharply to a level of 4,1% at the end of 2013 compared to 7,5% in Q4/2012. The vacancy rate has therefore decreased to the levels
last recorded in 2011. In the Bratislava region, the vacancy rate is even lower – at 3,8%. Since there is only limited construction activity on the market today it is expected that the vacancy rate will go down even more. This means that both new entrants to the market and existing companies will have only limited options for their expansion in the Slovak market.
"It is positive that the leasing activity remains active. Companies from the wholesale, production and logistics sectors were the most active in 2013. Development companies such as Point Park Properties and Immorent were active in construction, however, industrial construction decreased significantly in 2013. The negative effect of this combination will be reduced opportunities for companies to expand. The availability of warehouse space will be significantly reduced in the Bratislava region, compared to 1 year ago," says Martin Balaz, head of the industrial team at Cushman & Wakefield Slovakia.
These trends were derived from statistical analyses collected and prepared by Cushman & Wakefield.

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Zuzana Gurova

Senior Marketing Executive

Bratislava, Slovakia

Phone +421 2 59 209 366

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