CURRENT REAL ESTATE MARKET AND OUTLOOK FOR 217 Richard Curran Managing Director CBRE 7 th March 217
PRAGUE OFFICE MARKET
PRAGUE OFFICE HUBS Prague is divided into 9 main office locations. 1 City Centre 7 9 4a Pankrac-Budejovicka 6 4b Chodov-Opatov 1 8 5a Smichov-Andel 5a 5b Butovice-Stodulky 5b 4a 6 7 Dejvice-Evropska Holesovice 4b 8 9 Karlin Vysocany-Prosek- Letnany 3
Thousand sq m STOCK IN PRAGUE OFFICE HUBS Holesovice Most of the space U/C is in Pankrac-Budejovicka and Butovice-Stodulky office hubs. Development of Prague office stock in office hubs Existing space 216 New supply 217 (U/C) New supply 218 (U/C) 8 7 6 5 4 3 2 1 Source: CBRE Research, PRF, data as of Q4 216 4
2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 (f) 218 (f) New supply (in thousand sq m) Total stock (in milion sq m) STOCK Limited new supply with only 33,4 sq m in 216. Development of Prague office stock 35 3 25 2 15 1 5 3,21 mln sq m of office space 4 3.5 3 2.5 2 1.5 1.5 Total stock New supply Pre-crisis Avg. New supply Recession Avg. New supply Source: CBRE Research, PRF, data as of Q4 216 5
21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217(f) In thousand sq m Vacancy rate (%) PRAGUE OFFICE MARKET TREND The vacancy rate decreased by the end of the year to 1.6%. Trends on Prague office market Dejvice - Evropsk a 35 Take-up (excl. Renegotiations) New Supply Net Absorption Vacancy Rate 18 3 25 2 15 1 5 City Centre Karlin 16 14 12 1 8 6 4 2-5 Source: CBRE Research, PRF, data as of Q4 216 6
Thousand sq m Vacancy rate (%) DEMAND IN 216 Net take-up in Prague office hubs Take-up (excl. reneg.) 216 Vacancy rate Q4 216 Prague vacancy rate Q4 216 7 6 5 4 3 2 1 18 16 14 12 1 8 6 4 2 Source: CBRE Research, PRF, data as of Q4 216 7
DEMAND IN 216 Net take-up according to sectors Breakdown of total leasing activity IT 25% 3% 3% 5% 6% 8% 17% 13% 12% 8% Professional Services Pharmaceutical Manufacturing Finance/ Banking/ Insurance Construction / Transportation Advertising / Media Consumer Goods Legal 1% 26% 1% 2% New occupation Renegotiation Expansion 52% Pre-lease Sublease Other Source: CBRE Research, PRF, data as of Q4 216 8
EUR/sq m Months LANDLORD INCENTIVES Average incentives for new leases of an average size with a 5 year term. 18 Fit-out contribution Rent-free period 12 16 14 1 12 8 1 8 6 6 4 4 2 2 Source: CBRE Research 9
AVERAGE ASKING RENTS City Centre 12.8 Pankrac-Budejovicka 12. 12.4 Chodov-Opatov 17.2 14.4 Smichov-Andel Butovice-Stodulky 13.2 15.1 Dejvice-Evropska Holesovice 14.9 14.2 Karlin Vysocany-Prosek- Letnany Source: CBRE Research 1
OFFICE MARKET Outlook 217 Strong demand will continue (expansions, consolidation, relocation) Further slight decrease of vacancy rate increase of prime rent and average headline rents (in most in demand locations) The market will be still considered as tenants market (level of incentives remain still high). 11
RETAIL MARKET
RETAIL MARKET Stock development Total stock (thousands sq m) 2,5 2.3 sq m New supply (thousands sq m) 25 2, 1,5 Pre-crisis avg. new supply 2 15 1, Recession avg. new supply 1 5 5 26 27 28 29 21 211 212 213 214 215 216 217 (f) Total stock New supply Under construction Pre-crisis avg. new supply Recession avg. new supply Source: CBRE Research, Q4 216 13
CBRE SHOPPING CENTRE INDEX What is the added value? AIM OF THE INDEX To provide a benchmark based on which the performance of the shopping centres can be judge 1 REGIONAL SHOPPING CENTRES 83 RETAILERS VISITED BY 42 MILLION CUSTOMERS 7 OUT OF 12 REGIONAL CITIES COVERED 27, SQ M GLA IN TOTAL 14
CBRE SHOPPING CENTRE INDEX Key variables AVERAGE TURNOVER CZK/ sq m/ year AVERAGE RENT EUR/ sq m/ month 52,8 19. 19.2 49,8 48,3 46,9 46,7 18.5 18.1 17.9 211 212 213 214 215 211 212 213 214 215 CUSTOMER FLOW 45 4 35 3 Total 214 -.4% y/y Total 215 +3.7% y/y 25 1.1.214 1.4.214 1.7.214 1.1.214 1.1.215 1.4.215 1.7.215 1.1.215 42.5 42 41.5 41 4.5 4 Source: CBRE Research, Shopping Centre Index 216 15
RETAIL MARKET Shopping centre density in regional cities Purchasing power EUR/ obyv. 1,5 1, 9,5 Praha Average = 8,9 Average w/o Prague = 7,9 Average = 665 Average w/o Prague = 728 9, 8,5 8, 7,5 Pardubice Jihlava Brno Plzen Hradec Králové České Budejovice Zlin Karlovy Vary Olomouc Liberec 7, 6,5 Ústí nad Labem Ostrava 6, Source: CBRE Research, GfK, Q4 216 2 4 6 8 1, 1,2 1,4 1,6 Density sq m/ 1, pop. 16
RETAIL MARKET High street market PALLADIUM KOTVA FLORENTINUM Celetná MYSLBEK SLOVANSKÝ DŮM NA PŘÍKOPĚ 14 MY QUADRIO Mass Market High street Tourist focus Luxury Market High street Main shopping centre Secondary shopping centre expansion 17 Source: CBRE Research
RETAIL MARKET Outlook 217 Retail sales are forecasted to grow by 2.7% Increase of total stock volume mostly through expansions Refurbishment and repositioning prime locations remain the most attractive for newly entering brand (Centrum chodov) Further grow of prime rents (SC - 9% / HS - 8%) 18