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Budapest modern industrial stock at 1.96 mln sqm in Q1

At the end of the first quarter of the year, the stock of modern industrial real estate in Budapest and its surroundings stood at 1,961,480 sqm, the Budapest Research Forum (BRF) reported today in its Q1 2017 industrial market snapshot.

Four developments were delivered in the first quarter of 2017,  increasing the new supply by 40,230 sqm. These included the Budapest Dock Freeport Phase II and III (19,200 sqm), and two buildings of Prologis Park Budapest-Sziget (21,030 sqm). One industrial park was deleted from the stock due to owner occupation. 

Total demand amounted to 71,600 sqm in Q1, which is slightly under the five-year average of first-quarter leasing activity (73,830 sqm). Renewals accounted for 34.5% of the total take-up, while the share of new lease agreements made up 30.8% and expansions 16.5%. Two large pre-leases were signed during the quarter, totaling 13,000 sqm and representing 18.1% of the total demand of Q1 2017. 

The BRF registered 25 industrial transactions in the first quarter, of which one lease agreement reached 10,000 sqm. The average deal size was 2,864 sqm, which is in line with the average level in the previous five Q1 periods. 

Some 96% of leasing activity was recorded in logistics parks, where the average deal size was 3,440 sqm. The average deal size in city logistics schemes amounted to 564 sqm.

The largest pre-lease was signed in CTP-Biatorbágy, for 10,000 sqm. The largest new lease was signed at the Mile Logistics Center, for 8,365 sqm. The largest renewal was a 9,760 sqm deal in Prologis Park Budapest-Gyál, while the largest expansion took place at the Akácliget Logistics Center on 3,550 sqm.

The vacancy rate declined 2.2 percentage points quarter-on-quarter, reaching a record low of 5.9% at the end of Q1 2017. In total 115,162 sqm is currently vacant and only one scheme offers more than 10,000 sqm available adjacent space. 

Net absorption remained positive over Q1 2017 and amounted to 67,346 sqm. 

The BRF comprises CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary.