Panattoni Enters Hungarian Logistics, Industrial Park Market

Industrial

Panattoni Park Gorzow Wielkopolski in Poland by international developer Panattoni.

Panattoni, one of the largest regional and European logistics and industrial park developers, which has had a significant presence in the Czech Republic and Poland in recent years, has announced the opening of an office in Hungary.

Previously a notable absence in the Hungarian market, the company has already secured two projects in the Budapest area. This adds to other regional industrial developers and park operators such as Prologis, CTP, and VGP. Additionally, national operators such as NIPÜF (the National Industrial Park Operator and Developer), Wing, CPI, ConvergenCE, and HelloParks, are active in an increasingly attractive Hungarian industrial market with strong demand and the lowest vacancy in Central Europe.

“As with other countries of the region, the global pandemic has had little impact on the Hungarian real estate warehouse and industrial sector. The country is also set to benefit from new trends that were strongly evident last year, including the growth of e-commerce,” explains Robert Dobrzycki, CEO of Panattoni.

“It could also benefit from the fact that many Asian companies are looking for alternative locations for warehouses and production plants since many automotive companies are now located in the country. In addition to that, Chinese finance is being used for the construction and modernization of a high-speed railway between Budapest and Belgrade, which will connect the Balkans with a special transport route to the now Chinese-owned Piraeus seaport in Athens,” he points out.

“Thus, Hungary is becoming an increasingly important bridgehead for the Chinese in Europe and a gateway into Western countries. Upon the completion of this project, the country will be in a strong position to be able to compete with major logistics hubs across Europe,” Dobrzycki adds.

The total modern industrial stock in the Budapest area stands at over 2.4 million sqm, according to the Budapest Research Forum, consisting of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL, and Robertson Hungary. There are few, if any, logistics buildings with more than 5,000 sqm of available contiguous industrial space and an overall vacancy rate of 2.6%.

Development Revival

“In response to the high demand levels seen in 2020, a revival of development activity is in evidence, and an improved amount of new space will be delivered in 2021/2022 amounting to nearly 300,000 sqm of industrial space; 37% of the 2021 pipeline is already pre-let,” comments Cushman & Wakefield Hungary in its Industrial Snapshot for the first quarter.

By way of comparison, Poland has 2.3 million sqm of industrial space under construction with a vacancy rate of 7%. The Czech Republic has more than 9 million sqm of class “A” industrial space across the country, with an overall vacancy rate of 3.6%, according to JLL. 

Panattoni has delivered 12 million sqm of space in Europe over the past 15 years, including its first BREEAM “Excellent” accredited building at Panattoni Park Sosnowiec, in Poland. The company also achieved BREEAM “Outstanding” accreditation for its park in Cheb in the Czech Republic. The company aims to achieve emission neutrality for all its buildings by 2025. Sustainability has become a central concern for industrial developers and park operators. 

The Hungarian branch of Panattoni is headed by László Kemenes, the former country manager at Prologis in the country and an industrial consultant at CBRE. He will be responsible for the whole development process, from site acquisition and investment to the commercialization of the projects and transfer to tenants.

This article was first published in the Budapest Business Journal print issue of June 4, 2021.

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