Developers Drawn to Booming Logistics Sector



In a very positive environment for the logistics and industrial market, developers who have traditionally been active in other sectors, such as office and retail, are now undertaking industrial projects.

They are drawn by the Budapest agglomeration, but also Hungarian provincial cities and even the possibilities of a regional Central European role. Further, regional industrial developers and investors who have not been active in Hungary are showing interest in extending their activities to the country. 

“The COVID pandemic brought the logistics sector into the global spotlight. Indeed, we see that COVID has had no negative effects on the Hungarian industrial and logistics market, proven by the record high demand and tight vacancy levels measured during 2020,” says Gábor Halász-Csatári, head of industrial at Cushman & Wakefield Hungary.

“We see that the accelerated shift to e-commerce together with a forecasted improved level of consumption will fuel current demand levels even further. There is a very healthy speculative and semi-speculative pipeline in Budapest; new market players along with those who have an established portfolio are as active as ever,” he adds.

The Czech-based developer CTP claims it is the largest industrial park owner and developer in Hungary, with around 600,000 sqm of almost fully let space. By the close of 2021, it plans to have 750,000 sqm across the country, rising to one million by the end of 2022.

The company has eight projects under construction in the Budapest area, and also Debrecen (232 km east of Budapest), Győr (121 km west of the capital), and Szeged (175 km southeast). Of the 235,000 sqm currently under construction, 60% is pre-let; from the 322,000 sqm of upcoming pipeline projects, 9% is already spoken for.

It is the potential offered by this sort of market that has attracted the originally U.S.-based Panattoni, which has now opened an office in Hungary and already secured two projects in the Budapest area. A prominent developer across the Central and Eastern European region, it had been a notable absence in the Hungarian market.

The newcomer thus joins other regional industrial developers and park operators such as CTP, Prologis, and VGP, in addition to national operators like ConvergenCE, CPI, HelloParks, the National Industrial Park Operator and Developer (NIPÜF), and Wing. All are active in this increasingly attractive market sector.

Prologis Park Budapest-Harbor.

New Trends

“As with other countries in 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.

He says the country 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. 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.

Prologis, meanwhile, has completed a land acquisition for the development of 60,000 sqm of space on a 13-hectare site at Prologis Park Budapest-Sziget in the Szigetszentmiklós area in south Buda.

“Our key focus is on the greater Budapest area,” says Máté Szoboszlay, director of capital deployment at Prologis Hungary. The developer has 630,000 sqm of industrial space in five fully-let parks.

The Hungarian developer and asset manager ConvergenCE has also moved into the industrial market with the preparations for a ready-made product in Tárnok (26 km by road from central Budapest, at the junction of the M7 motorway). The firm says construction of an 8,000 sqm logistics or light industrial facility can be started immediately once a tenant has been sourced.

The newly established Hungarian industrial developer HelloParks, a member of the Futureal Group, is continuing its expansion with the development of HelloParks Maglód, 30 km east of the Hungarian capital.

The first 46,000 sqm facility is being built on a 46-hectare site. The EUR 40 million industrial and logistics center has the capacity for a total area of 193,000 sqm of BREEAM-accredited space. This follows the start of development at HelloParks Fót on a 76-hectare site adjacent to the M0 highway, providing the potential for 330,000 sqm of warehouse and industrial space.

Highly Competitive

“HelloParks aims to increase Hungary’s regional competitiveness with highly competitive and efficient mega parks that also focuses on sustainability,” comments Rudolf Nemes, CEO of HelloParks. 

“HelloParks aims to become one of the key players in the dynamically growing industrial and logistics market, first in Hungary and later in the region. The rapid development of e-commerce and the relocation of production capacities have started a new trend of establishing regional EU centers. We are constantly exploring further expansion opportunities in the Budapest agglomeration as well as the catchment area of large rural cities,” Nemes adds.

When it comes to development outside the capital, the state-owned NIPÜF has a development land bank covering most secondary cities across Hungary. The company says it aims to deliver logistics parks in areas not currently provided for by the market and has around 20 parks in strategic locations across the country.

NIPÜF has completed its latest warehouse development in the Pécs industrial park (238 km southwest of Budapest), a long-term lease for an 11,000 sqm facility. The total area of logistics space developed by NIPÜF nationwide is 168,000 sqm.

Another European-wide logistics and industrial park developer and operator, VGP, has undertaken construction of its second park in Győr, the VGP Park Győr Béta. Building B will deliver 30,000-37,000 sqm of spaces with canopies, delivered according to demand.

VGP describes Győr as a logistics hub, close to the M4 motorway connecting with Vienna and Bratislava. This is the fifth VGP development in Hungary. It has a 21,000 sqm speculative logistics park in Kecskemét (92 km southeast), and a new project in the Budapest region is due to start in the second half of the year, according to Karen Huybrechts, head of marketing at VGP.

This article was first published in the Budapest Business Journal print issue of July 30, 2021.

ÁKK Sells HUF 82.5 bln of Bonds at Auction, Above Plan Debt

ÁKK Sells HUF 82.5 bln of Bonds at Auction, Above Plan

EC Puts Hungary 2024 GDP Growth at 2.4% EU

EC Puts Hungary 2024 GDP Growth at 2.4%

HU-rizon Program: HUF 8 bln Funding for International Resear... Science

HU-rizon Program: HUF 8 bln Funding for International Resear...

Marcelito Pomoy to Perform in Budapest Next Week Music

Marcelito Pomoy to Perform in Budapest Next Week


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.