Faurecia renegotiates its lease terms in Mlada Boleslav

The 5th largest supplier of automotive components in the world, the French company Faurecia, has renegotiated lease terms of its warehousing and production capacities in Mlada Boleslav, Czech Republic. Compared to the initial lease terms, the company achieves total savings exceeding 50%.

The supplier of plastic components for car interiors, Faurecia Interior Systems Bohemia, was represented by the international real estate consultancy company Colliers International based on a global mandate. The lease terms renegotiation concerned almost 6,500 sq m of warehouse space, 300 sq m of offices and additional outdoor areas usable for storage within the park of UNO in Mlada Boleslav. Faurecia uses these premises for the storage of supplies for a local plant of Skoda Auto.

The aim was to adjust the original lease terms so that they correspond with the current market situation. Failing which, it would have been more beneficial for Faurecia to move into new premises, even with relocation costs and penalty for early termination of the existing lease contract. “Faurecia started the negotiations with the landlord themselves and achieved an interesting level of savings. Using our market knowledge, we have managed to lower Faurecia’s occupancy costs by an additional 26%. The savings were obviously balanced so that the cooperation remained fair even for UNO. Faurecia for example offered an extension of their lease term as a form of compensation." describes Simona Cerna, Associate Director of Colliers’ Industrial department, who represented Faurecia in the negotiations.

According to Cerna, the renegotiation of Faurecia’s lease terms is a perfect example of situation, which is common for many of the production and warehouse space users in the Czech Republic. “Tenants should not delay the renegotiations. According to our analyses, the current favorable situation will last till the third quarter of 2010 at the latest. Czech industry is slowly recovering from the crisis and the relatively high vacancy rate within existing industrial premises is going down," says Karel Stransky, Managing Partner of Colliers International.

UNO, a member of UNO Group and the owner of the park, is an important local developer in the region of Mlada Boleslav. The company owns a number of new industrial projects as well as parks that have been reconstructed to a high quality. Their portfolio amounts to over 200,000 sq m of usable areas suitable for warehousing, logistics and light production. Most of the tenants supply the automotive industry, which dominates the entire region.