Delog Kft, a unit of logistics group Transped, recently inaugurated a HUF 1.3 billion warehouse in Debrecen, in eastern Hungary. The 10,000 sqm facility uses an air-sourced heat pump system to generate heat, provide hot water and also take care of cooling. According to Zsolt Fülöp, the company’s managing director, installing the system took up about 10% of the entire budget and was approximately twice as expensive as a traditional heating system. But, considering the increasing price of fossil energy sources, it’s worth it, he said.

Besides being environmentally conscious, the heat pump system allows for heating or cooling the different units in the warehouse according to precise needs, thus making operation of the system entirely economical.

Delog calculates a ten-year return on investment, and has further plans for using other renewable sources. Currently, the heat pump requires electricity, which the company is planning to provide from its own resources in the future. The roof structure of the warehouse has been constructed in a way that solar panels can be installed on them at any time, and once it’s done, they will deliver the necessary power for the heat pump system.

But this is only a future option, Fülöp said. “The return on investment would not be economical at the moment. But with the development of the technology, initial costs of installing those solar panels might be lower, so we can go ahead and generate our own power for the heating-cooling system.”

Changing the mindset

Delog’s warehouse base is a refreshing exception on a market where there are hardly any new developments and developers with ongoing logistics projects try to keep building costs as low as possible.

As in any other segment of the real estate market, logistics developments can save significant amounts on operating costs in the long-run by implementing renewable energy sources. However, such investments are costly, and not surprisingly, only developers of built-to-suit projects will consider it as an option.

There are only a limited number of logistics centers that use some sort of renewable energy source, Koppány Ajtony Bíró, general secretary of the Association of Hungarian Logistics Service Centers told the Budapest Business Journal. The most common solution applied is the implementation of solar panels on building roofs, but even this is considered only at new developments. “Installing complex green systems boosts development cost to an extent which is difficult to incorporate in the sales price or in rents,” Bíró said.

However, increased cost in the development phase is only one factor that hinders such developments; another is the general mindset of industry players. “I think making more information accessible for developers on these green technologies, e.g. on initial costs and return on investment, would facilitate the spread of renewables in the sector,” the expert said.

According to him, it will take a further 3-4 years before renewables can be widely used at logistics developments. “The increasing price of traditional energy sources will definitely contribute to this process,” Bíró added.

Real estate agency DTZ Hungary is also optimistic about the future. “Companies will be increasingly aware of the importance of renewables in the future,” Éva Tamás, industrial properties consultant at DTZ Hungary told the BBJ. “We have already seen some clients whose basic requirements include the use of renewable energy when looking for industrial properties,” she noted.

However, tenants are price sensitive in today’s hectic economic and business environment, and price still rules when it comes to renting or buying industrial sites, Tamás added.