|
 |
Commercial property market overview
Economic Overview
The Czech Economy continues to perform very well in 2007. GDP growth in the first quarter of 6.1% was driven primarily by investment activity and increased consumer spending, and particularly the manufacturing sector showed a very solid performance.
The unemployment rate fell to 6.4% at the end of July. Inflation stood at 2.1% while interest rates increased from 2.5% to 3%. The Czech Republic still has the lowest interest rates in the European Union, but experts forcast an increase up to 3.5% later this year.
It is anticipated that inflation will reach 2.3% in 2007, whereas in 2008 the projected increase of the lower VAT rate from 5% to 9% will cause inflation to increase to a forecasted 3.4%. All the forecasts foresee the proposed public finance reform that is needed in order to accept the Euro. The deficit of the state budget, approaching 4% of GDP in 2007, is currently the main obstacle for the entry into the Euro zone.
Office Market
Total office stock in Prague now stands at 2,103,000 sq m, and comprises 68% Class A offices, and 32% Class B offices. The highest levels continue to be accommodated in Prague 4 (509,500 sq m), followed by Prague 1 (395,600 sq m), whilst the lowest stock levels can currently be seen in Prague 9 (55,800 sq m).
The new supply of 83,200 sq m in the first half of the year is almost the same figure as was delivered in the first half of 2006. Major completions in 2007 included BB Centrum Building E (14,600 sq m) and CS Technical Centre (15,000 sq m) in Prague 4, CSOB Headquarters in Prague 5 (37,700 sq m), The Park Building 9 in Prague 4 (7,600 sq m) and the Kolbenova City Development Building 13 in Prague 9 (2,840 sq m).
In 2007 the total new supply is anticipated to reach just under 250,000 sq m.
Following 2006's record take-up, 2007 has seen a more steady pace of leasing activity, with total take-up after Q2 reaching 70,200 sq m – a 56% decrease when compared to the same period in 2007. The most significant office leasing transactions to date in 2007 have been Generali Insurance acquisition at City Element (8,400 sq m) in Prague 4, Vegacom taking 5,200 sqm in KCD 4 in Prague 9, Ness Technologies acquiring space in The Park Building 9 (2,700 sq m) in Prague 4, and TNT Post CR taking office accommodation in the Zirkon Office Centre (2,000 sq m) in Prague 8.
The overall vacancy rate decreased further to 5.5% by the end of the second quarter 2007, with the vacancy rate in the City Centre standing at 6.1%, and in the Inner City and Outer City at 5.8% and 4.6% respectively.
Office headline rents in Prague have remained stable during the last 4 years. Prime Grade A buildings typically achieve headline rental levels of between ?17.5 – ?19.5 per sq m per month in the central locations, whilst in the Inner City area achievable headline rents range from ?14.5 – ?15.5 per sq m / month. In the Outer City submarkets, prime rents remain at between ?13 – ?15 per sq m per month. The high volume of supply expected over the next few years in Prague is expected to counterbalance increasing construction costs, and therefore we anticipate continued stability of prime headline rents in the Inner and Outer City, whereas net effective rents could decrease slightly in the short term due to higher incentive packages offered by developers to secure tenants in districts with high development pipelines.
Regional Czech office markets continue to develop. Ostrava´s supply pipeline for 2007 is approaching 40,000 sq m, driven primarily by construction of offices at The Orchard, and in Brno supply will reach 80,500 sq m this year with the completion of IQ Buildings C and D in the Spielberk Office Park (13,300 sq m). In Plzeň, the Avalon Office Centre's completion in 2007 has added 10,700 sq m of modern A Class office stock.
Headline office rents remain stable in the regional cities, ranging from ?7 – ?9 sq m / month for existing Grade B stock and up to ?10 sq m / month for new builds in Plzeň, with headline rents in Ostrava at ?9 – ?10 sq m / month for edge of centre business parks, and ?11–?13 sq m / month for more central Grade A office schemes.
Investment
The investment market in the Czech Republic continues to attract high demand from international and domestic investors. Due to limited investible stock regional, secondary markets such as Brno, Plzeň, Ostrava and other smaller cities witness from 2007 onwards increasing importance.
Results from the first half of the year 2007 show that the completed year is due to outperform the year 2006, with approximately ? 1.3 billion transacted already compared to the same amount for the whole year 2006.
Dominating investors on the Czech market traditionally come mainly from the UK, Austria, Germany and USA. By contrast to 2006 the first half of the year 2007 demonstrated a large share of mixed-use and retail transactions.
A major transaction in the first quarter of 2007 was the purchase of a mix of projects in Prague and Brno by the Austrian fund Immoeast, one of the most active funds in the Czech Republic. Immoeast acquired one office project in Prague, two office buildings as a forward purchase in Brno and two retail projects, one in Prague and one in Brno from Lordship for 210 million EUR
Another important transaction was the purchase of the Palladium shopping centre in the centre of Prague, which is due for completion this Autumn. The transaction was agreed off market between the purchaser Hannover Leasing GmBH and the developer of the project EPD for reported 530 million EUR.
Prime yields stand at 5% - 5.25% for offices, 5.5% – 5.75% for retail and 6.5% for industrial as at the end of the first half of the year 2007. It can be expected that these yields have largely stabilised.
Retail Market
Since the mid-1990’s the retail sector has developed extensively in the Czech Republic. Particularly strong has been the growth of hypermarket anchored retail schemes all over the Czech Republic. The top three retail chains, ranked in terms of turnover, are Dutch Ahold, Makro C & C and British retailer Tesco.
Currently there are more than 1,300 outlets operated by major retail chains. Multinational chains dominate the Czech retail market. The total turnover of the 10 strongest companies reached approximately ? 8.4 bn. in 2006.
The retail sector is being driven by increasing income levels. Wages rose by 7.8% nominal and 6.2% real in the first quarter of the year. Retail sales grew by 7% in May 2007. Household consumption is expected to increase by 6.6% in 2007, due to rising wages and indebtedness of the households and also the anticipation of the lower VAT rate increase in 2008.
Total shopping centre stock in Prague now stands at 725,000 sq m, while stock in the regions has reached 860,000 sq m. In 2007 and 2008 the retail market in the Czech Republic will continue to expand. The largest development pipelines in Prague are expected in Prague 9, Prague 6 and Prague 4, and DTZ expects that Liberec, Brno, Plzeň and Ostrava will also see substantial growth over the course of the next two years.
In October 2007 the long awaited Palladium shopping centre (39,000 sq m) in the City Centre of Prague will be completed. The Outlet Airport Praha (31,000 sq m) and Prague Outlet Centre (18,000 sq m) are due for completion also in the second half of 2007.
In the regions Olympia Brno is currently being extended and will add 23,000 sq m to the existing 55,700 sq m in 2007. Other anticipated completions in 2007 are: Plzeň Plaza (19,500 sq m) and Bondy Centrum Mladá Boleslav (15,000 sq m). In Ostrava the first phase of New Karolina has started, the largest redevelopment scheme in the Czech Republic, which will include a large shopping mall. In smaller regional cities, retail activity is particularly strong in Liberec, with 3 new schemes slated for delivery between 2007-2010.
There is a number of new tenants that are likely to enter the Czech market in due course such as the fashion brands Adessa and AbOriginal, other international tenants are observing the market and considering the entry.
Stronger competition will increase the need for new concepts and alternative formats of retail schemes such as retail outlets, Stop.Shops and multifunctional projects with a large proportion of leisure and sports components.
The high supply pipeline for the coming years is expected to have an impact on rental levels with an increasing rental gap between the successful and the struggling centres.
The Prague Golden Cross of Na Příkopě and Wenceslas Square continues to be the most attractive for retailers and commands the top rents in the Czech Republic. High street prime rents continued to increase to approximately ?165 – ?170 sq m / month. Further rental growth of high street rental levels is anticipated.
Shopping centre average rents (including FMCG-Electro and major anchors) in Prague are: for prime shopping centres ?21 – ?26 sq m / month, Inner City shopping centres ?13 – 20 sq m / month, Outer City shopping centres and retail parks ?10 – ?14 sq m / month, and retail warehouse rents vary between ?6 – ?10 sq m / month. For smaller units between 40 sq m- 200 sq m, rents in Inner City shopping centres stand at ?40 – ?60 sq m / month, Outer City shopping centres ?20 – ?30 sq m / month. Small units in retail parks quote ?15 – ?25 sq m / month plus service charges.
Prime headline high street rents in Brno reach between 35 EUR and 60 EUR per sq m per month and in Plzeň between 25 to 35 EUR per sq m per month.
In the regional cities prime shopping centre rents vary between 17 – 19 EUR per sq m per month. However, in Brno rents in average prime shopping centres vary between 19 – 20 EUR / sq m per month (including Electro, hypermarkets and all major tenants). Rents strongly depend on the city, location within the city and type, quality of the shopping centre and the size of the unit. In retail parks average rents range between 6.5 – 12 EUR / sq m per month.
Due to the high pipeline for the coming years it can be expected that the prime headline rents should stay stable, and in locations with a particularly high supply pipeline, this will cause introduction of incentives to tenants. However, other locations where there is no pipeline planned this may result in a slight rental growth during the mid-term.
Industrial and Logistics Market
Total modern industrial stock in the Czech Republic has reached 1.9 million sq m. New supply in the first half of the year climbed to more than 413,000 sq m. Of the total new supply approximately 11% was completed in the Greater Prague area, 62% in the secondary and 27% in the tertiary markets.
The Czech market continues to witness increasing speculative development all around the country, the highest development pipeline will be concentrated in Plzeň and Ostrava. Apart from that all the regional cities that are well linked to major transport routes drift to the focus of developers.
The first half of the year witnessed completions of the SEGRO´s Tulipán Logistics Park phase IIa (14,800 sq m) and the first two buildings in the project West Business Centre, Chrášťany (15,000 sq m) and West Business Centre in Křimice (15,000 sq m), of the developer Amesbury. VGP have also delivered a building in the Park Nepřevázka in Mladá Boleslav for DHL (13,000 sq m) and the H1 Building in the Industrie Park Sever in Prague (10,000 sq m). High levels of new supply were added to the stock in Plzeň and Ostrava CTP Parks. Developer Panattoni completed the first part of the D5 Logistics Park in Plzeň (28,000 sq m).
For the second half of the year DTZ expects a high supply pipeline, particularly in Plzeň, Ostrava, Hranice, Pohořelice, Bor, Krupka and Louny.
New projects to come to the market are Orange Park Nýřany from the developer Mayfield (40,000 sq m), D8 European Park Kozomín (20,000 sq m) from Africa Israel and VGP Park Liberec (10,000 sq m).
In Prague we will see completions in the VGP Industrie Park Sever (approximately 30,000 sq m), Tulipán Park (20,500 sq m), Northpoint D8 Distribution Park (13,500 sq m), Rudná Logistics Park (12,500 sq m), ProLogis Jirny (62,700 sq m), ProLogis East (9,000 sq m).
Take-up in the first half of 2007 reached almost 454,000 sq m. However, a large proportion of short-term leases in the Greater Prague area is included in this figure. Major deals included the sale and lease back of DHL in Pohořelice (45,000 sq m), 25,000 sq m lease to DHL in ProLogis Park Jirny in the greater Prague area; in CTP Bor Tech Data extended its lease by 16,200 sq m, and Nippon Express also occupied 16,200 s q m in the same logistics park.
Total vacancy rate is around 5.7% in the Czech Republic, whilst in Prague the vacancy rate is slightly lower at 5.6%. It can be expected that the vacancy rate will be increasing in locations with the highest development pipeline, in particular Plzeň.
Headline rents for modern logistics space have remained and will remain stable in 2007, mainly due to high levels of speculative development. In Prague prime headline rents remain stable at ?4.80 per sq m / month, however average headline rents vary between ?4.50 – ?4.60 for a 5,000 sq m lease. In the regional logistics parks headline rents range between ?4.20 – ?4.50 per sq m / month. Landlords offer incentives to tenants, representing on average a 3-month rent-free period.
Source URL: www.cijjournal.com
Have a look at this:
| Today at 9 am Sonae Sierra officially opened the new shopping center Gli Orsi, in Biella, Italy, to the public. With a GLA of 41,100 m², Gli Orsi implied a total investment by Sonae Sierra of ˆ105 million, which will create 850 jobs after the opening. The center hosts 120 shops, including 18 restaurants and bars, with an innovative and complete commercial and leisure offer.
There are seven large shops, including a 13,700-m² Ipercoop hypermarket, owned and ... |
| Retailers and developers from across the Baltic States clashed yesterday at a conference organised by the International Council of Shopping Centers (ICSC)'s Baltic States National Committee in Vilnius.
After a 10-year period of rapid retail growth across Latvia, Estonia and Lithuania, retailers and shopping centre managers are facing an uncertain future as customers reduce their spending in the current difficult economic climate.
With fewer customers ... |
| Forum Duisburg, labeled the greenest shopping center in Europe thanks to its unique energy concept, opened its doors for the first time. The center encompasses about 57,000 m² of retail floor area, making it the largest inner-city retail project in North Rhine- Westphalia at the current time. Forum Duisburg is an attractive and modern inner-city regeneration project.
The concept puts an emphasis on the integration of the building into the urban structure. ... |
| Sonae Sierra, the international specialist in shopping and leisure centers, has presented three new projects for future Shopping and Leisure Centers in Leiria, Maia and Caldas da Rainha, representing a total investment of ˆ212 million. The three new shopping centers - Maia Jardim (Maia), Centro Bordalo (Caldas da Rainha) and LeiriaShopping (Leiria) - will create about 3,000 new jobs.
Sonae Sierra will thus become present in the Leiria and Caldas da Rainha regions, and will also reinforce ... |
| Desert Dream Real Estate & Investments, one of the fastest growing developers in the region, will launch Dream Harbour, a new AED 1.7 billion (ˆ290 mln.) residential development at Waterfront, a community by master developer Nakheel, on August 14 2008. Dream Harbour will be a 48 floor tower designed with a unique feel of Modern Arabia and luxury in mind.
The launch of Dream Harbour, already surrounded by predictions of high value sales, will be celebrated with ... |
| On July 3rd, 2008, Multi Turkmall celebrated the groundbreaking ceremony for a new project in Turkey. Forum Gaziantep Shopping and Lifestyle Centre is located in the city of Gaziantep in South East Anatolia. It comprises 44,000 m² of retail area and is scheduled to open in the third quarter of 2009. Forum Gaziantep will become the new shopping and leisure attraction in Gaziantep. The scheme is being developed for an investment subsidiary of Multi Corporation bv.
... |
| The S.I.T. Tower features an unparalleled combination of excellent business location at Dubai Silicon Oasis, world-class amenities and attractive payment schemes that make it highly attractive among investors and property buyers. Other key features of the S.I.T. Tower are a number of high-end retail shops and a full range of café's and restaurants.
Muhammad Nasir Muhammad Iqbal Falak, in collaboration with Sherwoods Independent Property Consultants and First ... |
| Institutional investors worldwide are being urged to engage with property fund managers to embed the UN-backed Principles for Responsible Investment (PRI) in their decision-making.
The call is being made today by the UNEP FI Property Working Group, whose European members include: AXA Investment Managers, Caisse des Dépôts, F&C Asset Management, Hermes Real Estate, Morley Fund Management, PRUPIM, and WestLB AG, amid concern that the property industry is moving far too slowly ... |
| The International Council of Shopping Centers, Inc. (ICSC) has announced that Jaap Gillis, Chief Operating Officer of Redevco and Chair of the ICSC European Board has been elected to its board of trustees.
“Behind every strong association is a strong board of trustees,” said Michael Kercheval, ICSC’s president and CEO. “Jaap Gillis has a strong background in the retail and real estate industry and I, along with the current board members, look forward to working with him during his ... |
| As Kyivans’ salaries grow, the demand for quality apartments is increasing and development companies are responding by building mixed-use real estate complexes that combine residential and commercial space in compact communities.
Among the biggest mixed-use development projects under construction is Holosiyevo, a 219,000 square-meter project at 13 Holosiyevska Street being developed by Miskzhytlobud, a private Ukrainian construction company.
“This ... |
| It is the third edition of the trade fair for commercial and industry properties and real estate investments which will take place from 27 to 29 May, 2008 at Vienna’s exhibitions ground Messe Wien. The name Real Vienna stands for a successfully established trade fair platform which especially scores internationally with its clear concept – the focus on the CEE and SEE regions (Central, Eastern and South-Eastern Europe).
Whereas in 2007 248 exhibitors attended ... |
| The world’s top ten most expensive office locations saw rents, a large component of occupancy costs, increase by an average 40 per cent last year, according to Office Space Across the World 2008, a global report by real estate services firm Cushman & Wakefield.
In this year’s ranking, London retains its title as having the most expensive office occupancy costs in the world, with one square metre of prime space in London’s West End at ˆ2,277 a year, or ... |
| A report, published by property international consultants GVA Worldwide, reveals that markets in Central and Eastern Europe, where economic growth is robust, will see stronger rental growth throughout 2008 compared to Western Europe.
The report, European Office Market Review Spring 2008, details how commercial investment property markets across Europe have suffered, highlights that occupier markets have remained relatively unscathed and reveals that many ... |
| The 111,690 m² Manufaktura shopping center in Lodz, Poland (developed by Apsys) took home the 2008 ICSC European Award for the best new development of very large centers. Winners of all the 2008 ICSC European Shopping Center Awards were announced on 17 April at the 2008 ICSC European Conference in Amsterdam.
Every year since 1975, ICSC has recognized excellence in new and refurbished shopping centers throughout Europe with the presentation of these ... |
| The fall-out of the credit crunch continues to impact the Central London commercial property investment market which saw just £2.83 billion (aprox. ˆ3.35 bln.) transactions take place during the first quarter of 2008, according to the latest Central London investment market figures from global property consultant Cushman & Wakefield. The figure is significantly down on the same quarter last year during which a total of £3.9 billion worth of transactions were traded ... |
| The appearance of the first professional shopping and entertainment centers several years ago helped Muscovites discover shopping as a leisure activity, while rising incomes of economically active residents made this form of recreation not only popular with them, but also pleasant and affordable. Developers in turn have been actively building and opening new shopping complexes for some time now, making them ever larger, higher quality, and more varied in concept in order to keep up with ... |
| The plot of real estate at Leipziger Platz generally referred to as the Wertheim site has come another step closer to development. It is one of the major properties in the heart of Berlin remaining to be constructed upon. In September of 2007, ORCO Germany and the Berlin Senate Administration for Urban Development initiated an urban design competition for a master plan for this prestigious and well-known property. On 18 March, 2008, the jury awarded first prize to the design by the ... |
| Not a single large property emerged on St. Petersburg's hospitality market in 2007, though many investors announced future plans for development. Meanwhile, a record-breaking number of properties are preparing to enter the market in the years 2008 and 2009. At the moment, 137 projects with more than 11,000 rooms are in various stages of completion.
Stormy Response
The latest large hotel to enter the St. Petersburg market is Kempinski, Moika, 22, which ... |
| Dawnay, Day Sirius Limited announces that it has acquired two freehold business parks located in Offenbach and North Berlin for a combined total of ˆ37 million, to be satisfied by cash from existing resources. The Company believes both acquisitions will be earnings enhancing, and represent an opportunity to increase NAV capital growth through further development and transformation of the sites.
In line with the Company’s strategy, both sites are well suited for rebranding, ... |
| Moscow is ranked as the top real estate market in Europe for both investment and development prospects according to the highly regarded real estate forecast, Emerging Trends in Real Estate® Europe 2008. The report, published today by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, covers 27 markets in countries throughout Europe and is based on surveys and interviews with nearly 500 of the industry’s leading authorities.
Survey respondents point to ... |
Documents: 1-20, 21-40, 41-60, 61-80, 81-100.
|
|
click the text
Voting results
