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The supply of warehouse space in Central Europe is decreasing

According to a Cushman & Wakefield report, the further growth of interest in the modern warehouse space in Central Europe could be observed in the first half of the year. Heavy demand and few new investments reduced the possibility of choosing the space to let.

Vacancy rate of warehouse space in Central Europe (Czech, Hungary, Poland and Slovakia) is now 11.8 percent at average; however, at some locations it dropped below 5 percent. Vacancy rate at the level of 10-12 percent is believed to be stable.

“On a prosperous market, insufficient supply motivates developers to start new investments quickly. However, restrictive banks’ financial policy and their careful approach to financing new investments still have negative impact on the Central European market. It has disturbed market equilibrium – for instance Slovakia with its 2.5-percent vacancy rate is an exceptional situation in Europe,” says Ferdinand Hlobil, head of the Central European industrial department at Cushman & Wakefield.

The amount of newly developed warehouse space in the first six month of the year remains far behind the long run average. This year, Central Europe witnessed construction of 198 000 sqm of new warehouse space to let. Within the last five years, the average annual supply exceeded 1.5 million sqm.

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