Budapest’s Logistics and Industrial Boom Continues


CTPark Budapest West.

With industrial and logistics demand remaining high and vacancy at record lows, the boom in the sector is continuing. Analysts say the Greater Budapest area is in a favorable position given the growing demand for logistics, e-commerce and light industrial space.

The industrial and logistics market is increasingly the sector of choice for developers, attracting both specialist industrial park operators and those previously focused on other fields such as offices or hotels.

Ongoing developments indicate ever-more sophisticated tenant requirements, with sustainability-accredited product being delivered in response. The sector’s challenges include increasing development costs, rising rents and a lack of workforce, according to consultancy Cushman & Wakefield.

Total industrial stock in Hungary has reached 4.7 million sqm, of which 3.2 million sqm is located in the Greater Budapest area as of the first quarter of 2023, according to CBRE. The area around the capital continues to dominate the logistics market as developers and park operators establish complexes at locations with direct access to the MO orbital motorway, providing a direct highway connection to the city, Ferenc Liszt International Airport, major regional Hungarian hubs and international road links.

The logistics market is expanding at pace, with forecast completions for the Greater Budapest area this year at 446,000 sqm, according to CBRE. Vacancy has increased to 6% on the back of strong supply. The regional industrial developer and operator CTP has started a 120,000 sqm project at CTPark Szigetszentmiklós. The firm says it currently has more than 200,000 sqm of space under construction in Hungary.

More than 600,000 sqm of logistics space is under construction across Hungary, Cushman & Wakefield estimates, with a pre-let proportion of 30%.

“Leading developers are Prologis, CTP, Hello Parks, VGP, Wing and Biggeorge/Logstar, in no order of significance. Logicor is the most active developer,” says Gábor Halász-Csatári, head of industrial agency at Cushman & Wakefield.

“Others such as Panattoni and Weerts are making their first marks on the market and have ambitious growth plans. There are some regionally active local players, too, who have a significant presence in their respective submarkets, such as Infogroup or Xanga,” he adds.


Prologis sees Hungary as lacking a strong secondary industrial market in its provincial cities; therefore, it concentrates on the area around the capital.

“All Prologis buildings in Hungary are located in the Budapest area, close to the M0 ring road. We believe demand is highest for distribution centers close to the city center, with easy access to airports and international transport routes,” comments Zsuzsanna Hunyadi, leasing and customer experience director at Prologis Hungary.

“These attributes also make our warehouses more sustainable, aligning with our environmental goals. In the current market situation, we are focusing more on BTS developments in order to provide the best possible service to our customers. At the same time, our latest speculative development was handed over just a few months ago in Szigetszentmiklós, at Prologis Park Budapest-Sziget II,” she added.

Generally, the Budapest-based stock tends to be more speculative-led, while in the countryside, developers prefer BTS projects due to the higher investment risk involved. In 2022, just 29% of all developments around Budapest were BTS-based, compared to 63% in the countryside, Halász-Csatári notes.

The prolific European industrial park operator and developer Panattoni had been a notable absence from the Hungarian market in recent years but has now secured two 100,000 sqm sites in the Budapest area.

The company has developed its first 17,000 sqm of speculative space across four buildings at Panattoni City Dock Törökbálint. It is also developing two speculative “big box” projects in Greater Budapest, one with a development potential of 74,000 sqm in Herceghalom, the other a 65,000 sqm project in Gyál.

Big Box Projects

“We still see strong demand for both big box warehouses as well as for last mile space. We are also pitching on BTS projects connected to the car and battery production/ manufacturing industries,” says László Kemenes, managing director of Panattoni Hungary.

“We have a good balance between logistics and light industrial at about 50-50. In terms of the location, most of the logistics requirements are for the Budapest area, notably the Western part, while production is focused around eastern Hungary,” he explains.

Another increasingly seen trend identified by Halász-Csatári is the demand for so-called “puffer,” or short-term, space. The Budapest market offers many options for these requirements as sub-leases, or 3PL (third-party logistics) services, at a slight premium due to the shorter-than-average contractual period and the occasional services included.

Kemenes adds that Panattoni is looking to add energy-efficient solutions to its products, such as solar panels, electric vehicle charging facilities and heat pump systems. He believes that these will soon become standard. The company has Breeam “Excellent” New Construction accreditation as a standard for its products in Hungary. New demands from tenants tend to be related to ESG, and many require energy-efficient solutions.

CTP is similarly committed to developing Breeam-accredited buildings across its Central European logistics portfolio, while Prologis is developing its parks to at least the “Very Good” standard.

HelloParks was only founded two and a half years ago as a member of the Futureal Group but is currently one of the most active developers in Hungary. The 46,000 sqm MG3 in Maglód is the first Breeam “Outstanding” accredited logistics building in Hungary, according to the company.

“Since our establishment in 2020, we have been developing our warehouses exclusively to the highest categories of the Breeam sustainability standards,” says CEO Rudolf Nemes. “Currently, all of our developments under construction are already built to the highest ‘Outstanding’ certification criteria and EU Taxonomy requirements. HelloParks wants to set a forward-looking green industry benchmark in the country and the region.”

This article was first published in the Budapest Business Journal print issue of July 14, 2023.


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