Companies present in Central Europe showed keen interest in taking space at modern industrial properties during the first six months of 2011, according to a new research report issued by Cushman & Wakefield (C&W).

Strong demand and few new developments have resulted in fairly limited alternatives faced by parties interested in leasing them. The industrial stock vacancy rate in Central Europe (Czech Republic, Hungary, Poland and Slovakia) today stands at 11.8% on average. In some places, however, it has dropped under 5%. At the same time, vacancy rates between 10-12% are considered as healthy.

'On a well operating market, such undersupply would motivate developers to quickly launch new development projects,' said Ferdinand Hlobil, head of the CE Industrial Team at C&W. 'The Central European market, however, still suffers from the restrictive financial policies applied by banks and their cautious positions in respect of financing new development projects. This has resulted in the distortion of the market - for example, Slovakia and its 2.5% vacancy rate represents an absolutely unique situation within Europe.'

Even in the Czech Republic the industrial stock vacancy rate has dropped under the 10% mark. Apart from an increase in rents, this phenomenon may discourage new manufacturing and logistic companies from entering the market in certain selected locations.

In all Central European countries with the exception of Hungary, the vacancy rate has been declining gradually ever since 2009. Hlobil: 'This decline can be expected to continue in the months to come as well. In the developed economies, such a situation would attract the attention of politicians and communities aimed at improving their business environments. Their involvement may thus help cause a drop in unemployment in the given region, bring about new construction and other orders for the local firms, and recruit new tax payers.'