Q4 2020 Market in the Czech Republic
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Real Estate for a changing world RESEARCH AT A GLANCE INDUSTRIAL & LOGISTICS REAL ESTATE Q4 2020 MARKET IN THE CZECH REPUBLIC • Record volume of leasing activity in Q4 2020 • The Pilsen and Greater Prague Regions are dominating industrial construction SUPPLY & VACANCY NEW SUPPLY, VACANCY RATE (sq m, %) In the Czech Republic, the total volume of modern logistics and industrial space increased to 9.2 million sq m by the end of 2020. 250 000 6 In 2020 a total of 650,000 sq m was constructed, which represents 200 000 5 a year-on-year decrease of 12%. In Q4 2020, 138,000 sq m logistics 4 space was completed. Compared to the same period of the previous 150 000 year, this is a 34% decrease. 3 100 000 The largest project completed in Q4 2020 was the hall in CTPark 2 Ostrava with 46,300 sq m. A hall of 16,000 sq m was built in CTPark 50 000 1 Blatnice and a new production and warehouse complex of 14,000 sq 0 0 m was delivered in Archan Park Zápy. The vacancy rate reached 4.8% at the end of 2020, an increase of 0.1 percentage point compared to the previous year. New supply Vacancy rate Source: BNP Paribas Real Estate KEY FIGURES 9.2 m sq m 138,050 sq m 341,470 sq m 4.8% TOTAL STOCK NEW SUPPLY Q4 2020 UNDER CONSTRUCTION VACANCY RATE Real Estate for a changing world 1 AT A GLANCE Q4 2020 INDUSTRIAL & LOGISTICS REAL ESTATE IN THE CZECH REPUBLIC ECONOMIC OVERVIEW • According to a preliminary estimate published by the Czech Statistical Office, the Czech economy shrank by 5.6% in 2020. The development of the economy was affected by a deepening decline in household consumption, investment expenditures and a drop in foreign demand. • Unemployment in the Czech Republic rose slightly to 4% 1.7% 3.2% 4.0% in December 2020. The unemployment rate is the highest CONSUMER UNEMPLOYMENT since 2017, nevertheless, the Czech Republic still has NOMINAL WAGE the lowest unemployment rate of all EU countries. GROWTH PRICE INDEX RATE • The average inflation rate in 2020 increased to 3.2%, which Q3 2020 12/2020 12/2020 was 0.4 percentage points more than in 2019. Prices rose mainly for food, tobacco and housing. According to analysts, this year's inflation could reach around 2%. GDP AT CONSTANT PRICES UNEMPLOYMENT RATE (%, y/y) (%, y/y) 8% 14% 6% 12% 4% 10% 2% 8% 0% 6% -2% 4% -4% 2% -6% -8% 0% Czech Republic Eurozone Czech Republic Eurozone Source: BNP Paribas Real Estate, Oxford Economics Source: BNP Paribas Real Estate, Eurostat VACANCY & RENTS €3.50-4.90 PRIME HEADLINE RENTS (per sq m per month) 5.0% Source: BNP Paribas Real Estate PRIME YIELD Real Estate for a changing world 2 AT A GLANCE Q4 2020 INDUSTRIAL & LOGISTICS REAL ESTATE IN THE CZECH REPUBLIC DEMAND MAJOR NEW LEASES SIZE Q4 2020 Y/Y Q/Q TENANT PROPERTY DEAL TYPE TAKE- U P (sq m) Contera Park Gross: 459,760 sqm +64% +67% Confidential 74,000 Pre-lease Ostrava D1 Net: 309,070 sq m +33% +99% GLP Park Confidential Chrášťany 36,000 Pre-lease 2020 Y/Y Panattoni Park Gross: 1,368,790 sq m -1% Confidential Stříbro 28,000 Pre-lease Grupo Antolin P3 Liberec 22,600 Renegotiation Net: 731,540 sq m -22% Bohemia YEARLY TAKE-UP Q1 – Q4 2020 NET TAKE-UP BY REGION (sq m) (%) 1 600 000 3% 2% 1% Plzeň Region 1 400 000 6% Greater Prague 1 200 000 10% 27% South Moravian Region 1 000 000 Moravia-Silesia Region 800 000 Ústí nad Labem Region 600 000 Karlovy Vary Region 13% 400 000 Central Bohemia 200 000 Olomouc Region 0 Vysočina Region 24% 14% Gross take-up Net take-up Source: BNP Paribas Real Estate Source: BNP Paribas Real Estate QUARTERLY TAKE-UP SUMMARY & OUTLOOK (sq m) • Almost 27% of logistics space under construction is located in the Pilsen Region, 23% is being located in Greater Prague 500 000 and 19% in the Ústí nad Labem Region. At the end of 2020, 450 000 a total of 341,500 sq m of industrial space was under 400 000 construction. 350 000 • The vacancy rate remained stable compared to the previous 300 000 year, reaching 439,200 sq m (4.8%) at the end of 2020. 250 000 Developers are now more cautious in planning new projects, most begin construction only after having secured tenants. 200 000 150 000 • Gross take-up reached a record volume of 459,760 sq m in Q4 2020, which is 64% more than in the same period last 100 000 year. This is the largest quarterly volume since 2016. 50 000 • E-commerce and distribution were the main drivers of de- 0 mand in 2020. • Rents remain stable compared to the previous quarter. In regions with a limited supply of logistics space, we can Gross take-up Net take-up expect a slight increase in rents. Source: BNP Paribas Real Estate Real Estate for a changing world 3 AT A GLANCE Q4 2020 INDUSTRIAL & LOGISTICS REAL ESTATE IN THE CZECH REPUBLIC GREATER PRAGUE • The Capital City of Prague is the economic centre of the country and as for economy, has a unique position within the Czech Republic. Its economic output consistently contributes roughly a quarter of the national GDP. Prague is the largest regional labour KEY INDICATORS market in the Czech Republic and influences also the rest of the country, especially Central Bohemian Region, where the unemployment rate continuously drops. • At the end of Q4 2020, the unemployment rate was 3.5%. 3,241,970 sq m 1.6% • Prague is a central point of all highway routes and is also TOTAL STOCK VACANCY RATE an important international railway junction. Air transport including freight is provided particularly by the Václav Havel Airport Prague. 77,510 sq m €4.10 – 4.90 • Greater Prague is the largest warehouse market in the Czech UNDER PRIME HEADLINE RENTS Republic. It accounts for 35% of the country‘s total stock. CONSTRUCTION (per sq m per month) • During Q4 2020, two new halls with a total area of 18,700 sq m were completed in Greater Prague, both located in the Archan Park - Zápy complex. • In Q4 2020, the total demand amounted to 123,400 sq m, out of which net take-up represented 75%. About 27% of the total national demand was concluded in Greater Prague. EXISTING WAREHOUSE SPACE 32 1. Airport Logistics & Service Center 10 34 2. Areál Letov 3. Areál Zdiby 4. Big Box Horní Počernice 5. Business Park Prague Chrášťany 6. Business Park Průmyslová 11 7. CPI Park Vestec 21 8. CTPark Prague Airport 9. CTPark Prague East 10. CTPark Prague North 45 3 11. Čestlice Business Park 3 12. GLP Jažlovice Logistics Centre 23 36 13. Jažlovice PPL 2 14. KSF Jažlovice 26 20 8 1 17 30 15. Contera Park Říčany 16. Karlovarská Business Park 22 4 17. Letňany Business Park 25 27 35 18. Life Point Čestlice 24 37 19. P3 Prague D1 33 16 44 20. P3 Prague D11 6 21. P3 Prague D8 39 38 40 22. P3 Prague Horní Počernice 42 40 23. P3 Prague Letňany 5 24. Panattoni Park Prague Airport I 31 25. Panattoni Park Prague Airport II 26. Penny Market Radonice 15 27. Prologis Park Prague Airport 11 28. Prologis Park Prague D1 East 18 9 29. Prologis Park Prague D1 West 7 30. Prologis Park Prague Jirny 41 31. Prologis Park Prague Rudná 43 14 12 32. Prologis Park Prague Úžice 13 28 33. Segro Logistics Park Prague 29 19 34. Tesco DC Postřižín 35. VGP Park Jeneč 36. VGP Park Tuchoměřice 37. Warehouse Jeneč 38. Business Park Prague Zličín 39. CTPark Prague West 40. Eastgate Prague 41. Komerční Park Dobřejovice 42. City Park Hostivař 43. Prologis Park Prague D1 West II 44. Emporium Ruzyně 45. Archan Zápy Real Estate for a changing world 4 AT A GLANCE Q4 2020 INDUSTRIAL & LOGISTICS REAL ESTATE IN THE CZECH REPUBLIC CENTRAL BOHEMIAN REGION • The Central Bohemian Region is the area that surrounds the Capital City of Prague. Its area, number of municipalities, and population make it the largest region of the Czech Republic. The KEY INDICATORS Region is an important source of labour force for Prague. • At the end of Q4 2020, the unemployment rate was 3.5%. • The Central Bohemian Region has the second densest (after sq m % Prague), but also the most overloaded, transport network 732,070 5.0 TOTAL STOCK VACANCY RATE in the Czech Republic. Main railway and road transit networks lead over the territory of the region to the Capital City. The region benefits also from river transportation. • The biggest car manufacturer in the country, Škoda Auto, is also 0 sq m €3.90 – 4.80 the biggest company in the region. It is based in Mladá Boleslav. UNDER PRIME HEADLINE RENTS This is one of the reasons almost 69% of all warehouses CONSTRUCTION (per sq m per month) in the Central Bohemian Region are located in Mladá Boleslav and its surroundings. • No new warehouse space was delivered to the market in Q4 2020. • Total demand amounted to 11,600 sq m in Q4 2020. EXISTING WAREHOUSE SPACE 12 9 10 1. Brandýs nad Labem 13 Continental 14 2. C-Mec Kladno 6 3. CTPark Divišov 7 4. CTPark Kutná Hora 5. CTPark Lysá nad Labem 8 6. CTPark Mladá Boleslav 7. CTPark Mladá Boleslav II 8. D+D Brodce 9.