TAKE-UP AND VACANCY RATE IN GREATER BUDAPEST (Q1 2017 – Q1 2023)
In 2023, despite economic uncertainty partly as a result of the Russian-Ukrainian conflict, high inflation, financial costs, decreasing household and corporate demand, GDP is expected to expand, albeit at a low rate. According to Colliers expectations this year to grow by 0.5–1.5%, but in 2024 and in 2025 predicted GDP growth will be around 3–4% on an annual average. In parallel with the slowing economic performance, industrial production decreased by 2.4% year-on-year in the first two months, but at the same time, with an increased role in the countryside industrial real estate market, car production, and manufacturing of EV car parts (e.g., battery production) were able to expand by 13% and 35% respectively.
Market summary
In Greater Budapest 5 new industrial buildings were added to the inventory for lease and 4 were handed over in the countryside for Q1 2023. The two largest developments are related to HelloParks in Maglód and Fót, with 46,273 sqm and 25,952 sqm respectively. A total of 111,328 sqm was handed over in Budapest and its surroundings.
Overall, inventory in Greater Budapest is 3.24 million sqm, while the total Hungarian inventory is 4.73 million sqm. Currently, there are nearly 667k sqm of industrial properties under construction, of which 316k sqm can be realized for rent in Greater Budapest by the end of 2023.
Net absorption continues to move in positive range, with occupied area inventory increasing by 40k sqm. In terms of demand breakdown, contract renewals accounted for the largest share with 46%, followed by expansion with 22%, while prelease and new contracts accounted for 17% and 15% of total demand. The largest new lease transaction in this quarter was a pre-lease agreement for nearly 14k sqm at HelloParks in Páty.
The vacancy rate in Budapest and its surroundings was 5.9% at the end of the quarter. In countryside, the rate was slightly (with +0.5 pps) higher than in Budapest at 6.4%.
In Greater Budapest the average rental rates were around 5.3–6.0 EUR/sqm for big-box and 5.5–7.0 EUR/sqm for city logistics.
1 Stock 3,241,152 sqm Vacancy 5.9% Net Take-up 58,002 sqm Rent – Big-box 5.3–6.0 EUR/sqm/mth Rent – City log. 5.5–7.0 EUR/sqm/mth Industrial
Snapshot Q1 2023 Completions 111,328 sqm Source: Colliers, BRF Development Pipeline (2023 Q2-Q4)
sqm
Market
316,307
City logistics take-up Sqm in 1000s 200 180 160 140 120 100 60 0 Big-box take-up Big-box vacancy rate % 2017 2018 2019 2020 2021 2022 2023 City logistics vacancy rate % In % 14 12 8 6 2 0
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10 20 40 80
Greater Budapest
Q1
Macro
Industrial Market Snapshot Q1 2023
We expect stronger demand for industrial/ logistics properties than for other types of real estate, but also anticipate increasing vacancy due to expected significant new deliveries. There is a growing focus on green warehouses, driven by increasing investor and tenant demand for long-term sustainable operations and energy-efficient functioning. Developments are supported by the expected strengthening of EUR/HUF exchange rate and a moderation in general construction industry demand, which may slow the growth rate of construction costs that was prevalent in previous years.
About us
KATA MAZSAROFF Managing Director, Hungary
Kata.Mazsaroff@colliers.com
Tamas.Beck@colliers.com
Kristof.Toth@colliers.com
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0 500 1000 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
International Group Inc. Source: Colliers, BRF Source: Colliers, BRF 1 500 1 700 1 900 2 100 2 300 2 500 2 700 2 900 3 100 3 300 2 0 20 40 60 80 100
Colliers
TAMÁS BECK Director, Head of Industrial, Hungary
KRISTÓF TÓTH Head of Research, Hungary
Outlook COMPLETIONS AND STOCK (Q1 2017 Q1 2023) Completions Stock Sqm in 1000s 2017 2018 2021 2023 2019 2020 2022 TYPES OF TRANSACTIONS (Q1 2023) In % New Pre-lease Expansion Renewal Big-box Q1 2023 City logistics Q1 2023 12 % 49 % 21 % 18 % 27 % 58 % 2 % 13 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
