According to the latest Big Box Hungary report of CB Richard Ellis (CBRE), the modern industrial property stock in Hungary exceeded 1.3 million square meters (sq.m.) in Q3 2008, CBRE said in a press release.
New supply in Q3 reached 51,700 sq.m. which is almost three times as high as in the same quarter of 2007. However the new supply throughout 2008 is already twice as much as the total completion for the whole of 2007. Global recession, however, will most probably make its mark on the real estate sector: previously planned developments and handovers will likely to be delayed.
It is already clear to see that 2008 will top every record ever experienced in the Budapest industrial market both in terms of supply and demand, CBRE said. Demand reached a record level of 90,000 sq.m. in Q3, which means that by only October 2008 more industrial space was let than in 2007. Since the majority of the demand was mainly provided by new deals (95%), coupled with a relatively low completion, it resulted in a high net absorption and a decreasing vacancy.
Adrienne Konthur Managing Director of CBRE Budapest said the average vacancy level decreased by 270 basis points and currently stands at 14.3%. However, taking the high future pipeline for Q4 2008 and Q1 2009 into consideration, we expect the average rate to increase again. At the beginning of 2008 many developers announced large new industrial projects, especially around the airport.
By now, it is obvious that their realization and completion date is uncertain. Instead of new projects the supply will be generated by the expansion of already existing fully let parks, whose developers tend to start speculative schemes. The Budapest South submarket will undergo the fastest growth by H1 of 2009. (press release, Napi Gazdaság)