CBRE MARKET PRESENTATION PREPARED FOR PREPARED FOR Current trends - - PowerPoint PPT Presentation

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CBRE MARKET PRESENTATION PREPARED FOR PREPARED FOR Current trends - - PowerPoint PPT Presentation

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CBRE MARKET PRESENTATION PREPARED FOR PREPARED FOR Current trends and expectation on retail and industrial market February 2015 RETAIL MARKET Introduction to the 2014 overview Total stock: 2,313,000 sq m ( shopping centres ) + 1,100,000 sq m (

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PREPARED FOR PREPARED FOR

CBRE MARKET PRESENTATION

Current trends and expectation on retail and industrial market

February 2015

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2 CBRE | AMCHAM | MARKET PRESENTATION 2014

Total stock: 2,313,000 sq m (shopping centres) + 1,100,000 sq m (retail parks & outlets) New supply: 78,100 sq m Space under construction: 54,900 sq m Planned new supply: 50,700 sq m Average shopping centre density: 220 sq m/ 1‚000 pop. Prime rents: 190 €/ sq m/ month (high street), 100 €/ sq m/ month (shopping centre) Main trends:

  • Retailers who had been successfully operating on the market saw the opportunity to grow either via expansion or

consolidation of weaker retailers due to a general growth in sales.

  • The same trends have been appearing in the overall customer and trade confidence which has led to an increase

in footfall.

  • Prime shopping centres and the high street remained the most attractive locations in Prague.
  • Upward pressure on prime rents due to a lack of new supply.
  • Significant retail investment activity in the second half of 2014.

Introduction to the 2014 overview

RETAIL MARKET

*expect from total stock, ale figures are for shopping centres

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3 CBRE | AMCHAM | MARKET PRESENTATION 2014

Completion 2014 & Future development

RETAIL MARKET

GALERIE TEPLICE OC LUZINY OC PIVOVAR QUADRIO OC FRYDA City Teplice Prague Decin Prague Frydek-Mistek Completion Q1 2014 Q2 2014 Q2 2014 Q4 2014 Q4 2014 GLA (sq m) 21,800 16,000 17,500 8,000 14,800 Developer Dandreet Urban Developers and Investors LTD Settimo Development CPI TK Development CENTRAL NOVA PALMOVKA AUPARK CENTRUM CHODOV BORISLAVKA City Kladno Prague Hradec Kralove Prague Prague Completion Q1 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017 GLA (sq m) 26,000 8,000 20,900 40,700 10,000 Developer Crestyl Metrostav HB Reavis Unibail-Rodamco KKCG

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4 CBRE | AMCHAM | MARKET PRESENTATION 2014

Shopping centre density in Europe (sq m/ 1,000 pop.)

RETAIL MARKET

Source: CBRE Research, year-end 2014 *included shopping centres above 10,000 sq m up to 50 51-100 101-150 151-200 more than 200

CZ 206

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5 CBRE | AMCHAM | MARKET PRESENTATION 2014

Shopping centre density in regional cities

RETAIL MARKET

400 800 1,200 1,600 300,000 600,000 900,000

Density sq m/ '000 pop Total stock sq m

Total stock Density Under construcion

  • Avg. density

Average density in regional cities 690 sq m/ '000 pop

Source: CBRE Research, year-end 2014 *included shopping centres above 5,000 sq m

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Prime retail rents in Europe (EUR/ sq m/ month)

RETAIL MARKET

up to 100 101-200 201-300 301-700 more than 700 up to 50 51-100 101-150 151-200 more than 200

CZ 190 CZ 100

PRIME HIGH STREET RENT PRIME SHOPPING CENTRE RENT

Source: CBRE Research, year-end 2014 * PRIME RENT – typical ‘achievable’ open market headline rent for a unit of a size 100-150 sq m

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7 CBRE | AMCHAM | MARKET PRESENTATION 2014

What is the added value?

CBRE SHOPPING CENTRE INDEX

AIM OF THE INDEX

To provide a benchmark based on which the performance of the shopping centres can be judge

10 REGIONAL SHOPPING CENTRES 7 OUT OF 12 REGIONAL CITIES COVERED 230,000 SQ M GLA IN TOTAL 730 RETAILERS VISITED BY 38.5 MILLION CUSTOMERS

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8 CBRE | AMCHAM | MARKET PRESENTATION 2014

Fundamental outputs

CBRE SHOPPING CENTRE INDEX

2011 2012 2013 49,800

AVERAGE TURNOVER CZK/ sq m/ year AVERAGE RENT EUR/ sq m/ month

2011 2012 2013 48,400 47,100 19.0 19.2 18.5

Source: CBRE Research, year-end 2014 37.5 38 38.5 39 39.5 40 40.5 2.8 3.3 3.8 4.3 1.1.2011 1.1.2012 1.1.2013

Total 2012

  • 1.7% y/y

Total 2013

  • 2.8% y/y

CUSTOMER FLOW

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9 CBRE | AMCHAM | MARKET PRESENTATION 2014

Main trends:

  • Limited development across the Czech Republic with three pojects under construction and two with expected

completion in 2017 (three in Prague).

  • Future development will focus on smaller local projects, mainly on traffic intersections with high footfall, or as

extensions of well performing schemes.

  • In an effort to hold or improve their position on the market, existing shopping centres will be forced to increase their

quality via refurbishment, redesign, tenant mix or overall experience. Specialization of the shopping centres.

  • New way of shopping using the multichannel sale. The share of e-commerce will further increase.
  • We expect further consolidation of the market and expansion of well performing retailers.
  • Ongoing increase in services. The big potential lies in food and leisure activities, which enhance the shopping

experience.

  • The lack of prime space (especially on Prague high street) and increasing saturation in terms of retail concepts will

cause the growth of prime high street and shopping centre rents.

  • The prime rents in regions of the Czech Republic will remain stable or decline slightly.

Outlook 2015

RETAIL MARKET

*expect from total stock, ale figures are for shopping centres

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10 CBRE | AMCHAM | MARKET PRESENTATION 2014

Total stock: 4,899,900 sq m (Greater Prague: 1,926,000 sq m + Pan-regional Czech Republic: 2,973,900 sq m) New supply: 356,000 sq m (Greater Prague: 126,400 sq m + Pan-regional Czech Republic: 229,600 sq m) Space UC: 374,000 sq m (Greater Prague: 240,300 sq m + Pan-regional Czech Republic: 133,700 sq m) Vacancy: 401,200 sq m (Greater Prague: 136,100 sq m + Pan-regional Czech Republic: 265,100 sq m) Take-up: 827,500 sq m (Greater Prague: 417,900 sq m + Pan-regional Czech Republic: 409,600 sq m) TLA: 1,295,800 sq m (Greater Prague: 631,900 sq m + Pan-regional Czech Republic: 663,900 sq m) Vacancy rate: 8.2% (Greater Prague: 7.1% + Pan-regional Czech Republic: 8.9%) Prime rents: 4.25 €/ sq m/ month Main trends:

  • New supply in 2014 totalling 356,000 sq m, the highest level recorded since 2009.
  • New, record levels were also set for both net and gross take-up which makes 2014 the strongest year ever in the

market’s history.

  • Record demand was in line with net absorption and therefore the vacancy rate remained stable.
  • The structure of new demand was also significantly affected by large requirements of other distribution (e-

commerce and retail) companies throughout 2014.

Introduction to the 2014 overview

INDUSTRIAL MARKET

Source: CBRE Research, Industrial Research Forum, Q4 2014

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Czech Republic Industrial Market Trend

INDUSTRIAL MARKET

2 4 6 8 10 12 14 16 18 20 100 200 300 400 500 600 700 800 900 1,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 Vacancy Rate (%) Thousand (sq m) Take-up (excl. reneg.) New completions Net absorption Vacancy Rate

Source: CBRE Research , Industrial Research Forum, Q4 2014

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Growth of the Stock

INDUSTRIAL MARKET

Source: CBRE Research , Industrial Research Forum, Q4 2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

100 200 300 400 500 600 700 800 900 1000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 % of preleased new supply in thousand sq m Greater Prague Area Regions % Preleased Space

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Structure of Take-up

INDUSTRIAL MARKET

18% 54% 28%

3PL Distribution Producer

CZECH REPUBLIC

Source: CBRE Research , Industrial Research Forum, Q4 2014

11% 82% 7% GREATER PRAGUE

3PL Distribution Producer

25% 25% 50% PAN-REGIONAL CZECH REPUBLIC

3PL Distribution Producer

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Major Deals in 2014

INDUSTRIAL MARKET

Source: CBRE Research , Industrial Research Forum, Q4 2014

Pilsen park West Nýřany, renegotiation 23,600 sq m (Q1)

PointPark Prague D8, pre-lease 39,200 sq m (Q2) Prologis Park Prague Airport, pre-lease 29,500 sq m (Q3) Panattoni D5 Logistics Park, renegotiation 29,000 sq m (Q3) Panattoni Park Prague Airport 133,000 sq m (Q4) CTPark Bor 59,000 sq m (Q4) Prologis Park Jirny, pre-lease 29,000 sq m (Q4) Panattoni Park Stříbro, pre-lease 27,000 sq m (Q4)

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Ownership and Ownership Changes in 2014

INDUSTRIAL MARKET

Source: CBRE Research , Industrial Research Forum, Q4 2014

37% 18% 17% 3% 2% 2% 21%

Ownership Structure

CTP Invest PointPark Properties Prologis D+D Real NBGI Segro Others

CITY NAME PRICE

  • EST. (€M) PURCHASER

VENDOR

Various VGP Portfolio 523.00 PointPark Properties Tristan Capital Partners(80%); VGP (20%) Prague Business Park Rudna 95.00 Prologis Heitman Prague Panattoni Park Prague Airport 45.00 Blackstone Pramerica Prague Westpoint N/a Central Group Immofinanz Prague D8 European Park N/a CTP Invest AFI Prague Tulipan Park Hostivice N/a Segro Standard Life Koprivnice Bang & Olufsen facility N/a Palmer Capital Bang & Olufsen Prague CTP Park Prague East 9.50 CTP Invest Kilcullen Capital Partners Pardubice Technopark Pardubice 6.65 Conseq Bankruptcy administrator Modletice Prologis Park Prague D1 West II 6.50 Prologis Invista Kladno C-MEC Kladno building 6.00 Collis C-MEC

2014 Czech Republic Industrial CRE Transactions

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Outlook 2015

INDUSTRIAL MARKET

Source: CBRE Research

  • We expect a strong year in terms of new supply. The trend of very limited speculative

construction will continue.

  • New locations are currently in preparation across the whole country.
  • High leasing demand will continue. Market driver will be the rise of e-commerce sector.

Several large e-commerce projects are already under negotiations.

  • We expect the vacancy rate to stay around two-year average at the level of 8%.
  • Upward pressure on rental levels in core locations can result in increase of 5% in the

next 6-12 months.