That said, some analysts express concerns over moderating demand, notably in the logistics segment of the sector. All players at the higher end of the market are developing in line with the demand for more highly-specified and sustainable spaces.
“The industrial and logistics sector in Hungary and across Central and Eastern Europe has been experiencing strong growth for several years, primarily driven by e-commerce expansion and nearshoring,” says Máté Szoboszlay, business development and investment director at Faedra Group.
“While economic uncertainties and rising costs have introduced a degree of caution among occupiers, the overall demand for modern, well-located facilities remains robust. At Faedra Group, we see a slight shift in the pace of inquiries, but not a fundamental drop-off, especially from companies prioritizing quality infrastructure and proximity to major transport routes,” he notes.
“This resiliency is partly due to supply chain reconfigurations and a sustained push toward more efficient operations. Businesses are recalibrating their logistics networks, often opting for flexible solutions that allow them to respond to a rapidly evolving market. Budapest and other regional hubs in Hungary stand out as highly competitive locations, attracting both local and international players seeking to optimize their distribution strategies,” Szoboszlay adds.
Last year, close to 500,000 sqm of industrial and logistics space was completed in Hungary, according to consultancy CBRE. Strong occupancy has resulted in an overall vacancy rate of 7.6%. New construction is slowing, although there is still a forecast pipeline of 314,000 sqm in the Hungarian countryside and 144,000 sqm in Greater Budapest in 2025.
There is now more than 5.5 million sqm plus of modern logistics and industrial space in Hungary, with 3.7 million sqm in the Greater Budapest area and 1.8 million sqm in provincial centers, according to the Budapest Research Forum (consisting of CBRE, Colliers, Cushman & Wakefield, Eston International, iO Partners and Robertson Hungary).
Cushman & Wakefield has traced a pipeline of 318,000 sqm for Greater Budapest, due to be completed by the end of 2026. CTP, HelloParks and Prologis are the dominant industrial landlords. Around 70% of modern industrial and logistics facilities are concentrated in Greater Budapest, predominantly along the M0 orbital motorway, with a 6.8% vacancy. Speculative development in Greater Budapest is expected to decelerate as developers take a more cautious approach to mitigate the perceived risk of oversupply.
“The demand shift is nuanced. While speculative demand has slowed slightly in some areas, built-to-suit projects remain strong, and there is a continued push for energy-efficient, well-located spaces,” comments Zsuzsanna Hunyadi, director of leasing and customer relations at Prologis Hungary.
“Demand for high-quality industrial and logistics spaces remains solid. Nearshoring and the reshuffling of global supply chains continue to drive interest, even if economic uncertainty has made some customers more cautious,” she explains.
“What we are seeing is that right now, industry players are following a calm, steady ‘wait and see’ strategy, and I think this mentality will dominate the first two quarters. Growth is now mainly about optimizing costs,” Hunyadi adds.
Countryside locations are becoming increasingly important due to the significant inflow of FDI from the likes of BYD (in Szeged) and BMW and CATL (in Debrecen). Colliers says this will likely increase demand for warehousing and manufacturing space. Even so, Greater Budapest continues to attract developers as the country’s largest industrial and logistics hub.
“In 2025, I expect stable demand in Hungary and an increased focus on regional [provincial] markets, especially in the south. At CTP, we already see a healthy prelease ratio for our 2025 pipeline and even more for the years beyond. This is driven by nearshoring trends and increasing manufacturing demand,” comments Ferenc Gondi, managing director and country manager at CTP Hungary.
With some cooling in the market, where overall availability has risen to 8-9% from a low of 2-3%, the BTS development option has become the preferred option.
“Developers and landlords increasingly need to develop in accordance with tenant-specific solutions, although this provides less flexibility […] concerning future lettings. For example, developing a facility for a car manufacturer or supplier is very tenant-specific,” says Valter Kalaus, managing partner of Newmark VLK Hungary, on development strategies.
Panattoni has handed over a BTS 28,000 sqm warehouse for the drug chain Rossmann in Üllő, about 30 km southeast of central Budapest, relatively close to the capital’s airport, in partnership with the owner OTP Real Estate Investment Fund. The warehouse includes a 4,000 sqm, three-story semi-automated racking system and a 4,000 sqm office building, is due for full completion in the third quarter of 2025.
“This project posed a highly complex challenge, and we consider it a remarkable achievement to reach this phase on schedule, allowing Rossmann to commence the installation of its technological systems,” said László Kemenes, managing director of Panattoni Hungary.
Ádám Székely, co-owner of the Hungarian industrial developer InnoVinia, says that regional locations are growing in importance across the country with rising demand. The company has a portfolio of more than 200,000 sqm of industrial facilities across Kecskemét, Polgár, Miskolc, Debrecen, Tiszaújváros and Karcag. Further projects in Szeged and Pécs are under preparation.
CTP, meanwhile, has signed a 10-year lease agreement with Zoomlion to relocate its operations to CTPark Tatabánya. Zoomlion will invest EUR 100 million in technology in the factory, while CTP will tailor the 35,000 sqm TBN5 logistics building to meet the Chinese manufacturer’s needs. In addition, the tenant will be able to utilize outdoor areas, newly constructed service facilities, and a 20,000 sqm testing zone.
The location of CTPark Tatabánya was a critical factor in the decision. Almost 70 km west of Budapest by road and near the M1 highway, the park has access to major transit routes linking Eastern and Western Europe. Additionally, its proximity to the “golden triangle” of capital cities Budapest, Bratislava, and Vienna ensures access to the company’s partners across the region, according to CTP.
In another industrial delivery, the Belgian-Hungarian WLP (Weerts Logistics Parks) and RaktárAD have topped out a 40,000 sqm logistics and production plant in Vecsés, close to the M0 and the airport, for Canada’s Magna, the world’s fourth largest supplier of automotive parts.
Although the industrial and logistics sector is generally regarded as an attractive investment destination, availability is limited as developers tend to hold onto assets. One route in, however, is via industrial parks developed by independent players. An example is the Faedra22 logistics, sold to a Swiss-German investor.
The 16,600 sqm development concept was tailored around high building specifications with a strong ESG focus, including heat pumps, solar panels and insulation, contributing to Breeam “Very Good” and “A+” energy ratings, according to Szoboszlay.
This article was first published in the Budapest Business Journal print issue of April 4, 2025.
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