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Prologis Hungary Portfolio Grows to 580,000 sqm

International logistics park operator and developer Prologis had a Hungarian portfolio of 580,000 sqm as of the turn of the year with an occupancy of close to 100% according to the company.

Prologis Park Budapest Harbor.

This is part of a wider Central European portfolio (also including Czech Republic, Poland and Slovakia) of four million sqm of logistics and industrial space with an overall vacancy rate of around 95% at the turn of the year. The most notable activity was in Poland, where the portfolio consisted of 1.8 million sqm and leasing activity reached 723,000 sqm in 2018.   

Reflecting the strong demand and low vacancy, Prologis is developing a 11,000 sqm speculative facility at Prologis Harbor Park in greater Budapest. This was the only development start undertaken by Prologis in Hungary last year.

In the wider Central European region, Prologis began the development of nine speculative buildings and four built-to-suit (BTS) facilities totaling 250,000 sqm of space in 2018. In total, Prologis completed 250,000 sqm of space in 13 buildings.

In Prague, Prologis has delivered an additional 38,000 sqm of space at Prologis Park Prague-Airport, 27,000 sqm of which is built-to-suit and 11,600 sqm is speculative. The company has also undertaken development of a 40,000 sqm speculative facility at Prologis Park Brno in Czech Republic. László Kemenes, country manager at Prologis Hungary, puts the development period of a speculative project at six-to-nine months.

With regard to leasing, Prologis recorded 109,000 sqm of activity and 32,000 sqm of new leases in Hungary. This compares to a total of 750,000 sqm of leases in its CEE portfolio and 477,000 sqm of new leases.

The strong momentum in the European logistics markets causing rental increases is predicted to continue this year.

“It is no surprise that expansion of the European logistics market continued in 2018, with another strong year for occupier demand, the lowest vacancy rates and long-anticipated rent growth beginning to materialize,” said Prologis research on the prospects for European logistics real estate in 2019.

Market fundamentals are seen as strong with positive customer sentiment, robust demand, disciplined supply, land scarcity and historic low vacancy rates. Kemenes sees possible development in the Budapest market in the growth in urban or city logistics, following the market trend in some of the larger European cities.