Industrial Market Developing in Cities Across Hungary
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HelloParks Fót logistics park.
Total stock in the Hungarian industrial market had reached 4.7 million sqm as of the end of the first quarter, according to the Budapest Research Forum (BRF), consisting of CBRE, Colliers, Cushman & Wakefield, Eston International, JLL, and Robertson Hungary. Total stock in the Greater Budapest area stands at 3.3 million sqm, while in the provincial countryside, it has reached some 1.4 million sqm.
In the first quarter of the year, the Greater Budapest speculative stock increased by five buildings, totaling 111,000 sqm, while in Hungary’s region, four new buildings were handed over, totaling 45,800 sqm.
The largest new industrial/logistics delivery in Greater Budapest was in Maglód, on the eastern boundary of the capital, with some 46,000 sqm of space developed by HelloParks, part of the Futureal group. The developer and park operator Prologis also delivered the 18,600 DC2A building to the south in Prologis Park Sziget II.
The most significant new delivery in provincial Hungary was Cordys Capital Miskolc P2, adding 20,000 sqm to the regional stock. Another notable addition was the 10,900 sqm Inpark Nagykanizsa, some 207 km by road southwest of Budapest.
The total industrial stock for Hungary of 4.7 million sqm compares to almost 11 million sqm in the Czech Republic, according to Cushman & Wakefield. The largest delivery in that country in the first quarter was the 48,000 sqm Panattoni Park Cheb South, in the Karlovy Vary region.
The Czech market has a further 1.2 million sqm under construction, including the 61,000 sqm Panattoni Park Pilsen West II. Notably, the most significant deliveries and pipeline projects are in regional industrial hubs away from the capital.
The overall industrial vacancy rate in the Czech Republic stands at just 1.3%. In Hungary, the figure at the end of the first quarter was 5.9% in Greater Budapest and 6.4% outside of the capital. On the national average, the rate stands at 6%.
HelloParks Páty construction.
Demand (Slightly) Down
Total demand in Greater Budapest amounted to 107,000 sqm, indicating a decrease of 15% year-on-year, according to Cushman & Wakefield. The largest transaction outside Budapest was a pre-lease agreement of 25,000 sqm at VGP Park Győr Beta, while in Greater Budapest, the largest lease agreement was a renewal for 23,000 sqm at Prologis Park Gyál. Renewals accounted for 45% of gross take-up.
In Q1, 25 leasing transactions were registered in Greater Budapest, with an average transaction size of 4,280 sqm, although three were for more than 10,000 sqm. The majority of leases continued to be concluded in big-box logistics parks, while eight agreements were registered in city logistics parks, according to BRF.
Cushman & Wakefield have recorded 157,000 sqm of new supply in Hungary in the first quarter of 2023. The consultancy has traced 544,600 sqm of industrial space that is under construction and due to be completed in 2023-2024, 418,000 sqm of which is in the Greater Budapest area. From this, 30% of the space is pre-let.
The most significant planned completion is the 118,400 sqm CTPark Sziget, in addition to the 58,400 sqm HelloParks Páty-PT1 and the 45,300 sqm HelloParks Fót. Outside of the capital, VGP is due to deliver the 30,400 sqm VGP Győr Beta II, and CTP is developing the 33,600 sqm CTP Tatabánya. Notably, CTP and VGP have projects both in the Greater Budapest area and in the provincial hubs.
The prime Hungarian industrial yield has moved out by 75 basis points to 6.25%. This compares to 5% for the Czech Republic.
This article was first published in the Budapest Business Journal print issue of May 19, 2023.
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