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REAL ESTATE review
INDUSTRIAL MARKET GROWTH LIMITED BY LOW AVAILABILITY The limited availability of contiguous industrial space in the Budapest area and rising demand has resulted in a record low vacancy rate of 2.4% in a market with an estimated total stock of 2.18 million sqm, according to Cushman & Wakefield.
Goodman Üllő Airport Logistics Center.
By Gary J. Morrell Despite rising demand, further development of the Budapest industrial market is continuing to be impeded by a limited supply of space and take-up is dominated by renewals.
more than nine million sqm as of the end of 2018. Of that, 3.16 million was developer-led and generally operates on a lease basis, while the rest was owneroccupied stock. The majority of the developer-led stock (some 2.18 million sqm) is located in the Budapest area.
A further obstacle to market growth is that developer-led logistics projects are mainly limited to the greater Budapest area. However, there are signs of demand in regional cities, stimulated in particular by the automotive industry. Against this background, developers are now considering the speculative development option.
“Last year brought the highest completion volume in a decade with 127,000 sqm of new space handed over. However, in terms of absolute volume as well as the nature of the delivered supply, this must still be considered rather conservative in the current market environment,” comments Gergely Baka, head of industrial and logistics at CBRE.
CBRE estimates that modern industrial stock across Hungary totaled a little
The Central European industrial and logistics market is continuing to record
high demand, reflecting the indicators in wider European industrial markets. Total Central European industrial stock has surpassed the 27 million sqm threshold and most of the region has low vacancy at 5% or less. Poland and Czech Republic continue to be the dominant markets, with 2018 supply at around 2.2 million sqm and 735,000 sqm respectively, compared to 127,000 sqm for Hungary, according to Cushman & Wakefield. Andrea Pusztai, associate director of industrial agency at Colliers International Hungary, estimates the 2019 industrial pipeline for Hungary at 180,000 sqm. A significant proportion of this is pre-let.
