Logistics real estate company Prologis released its report on its activity in Central and Eastern Europe in 2017, listing nine new developments started and 15 buildings delivered. Prologis also reported an occupancy rate of 97.4% in the region, a press release sent to the Budapest Business Journal reveals.
As of December 31, 2017, Prologis owned or had investments in properties and development projects expected to total approximately 64 million square meters in 19 countries, on a wholly owned basis or through co-investment ventures. Prologis leases distribution facilities to a diverse base of approximately 5,000 customers across two major categories: business-to-business and retail/online fulfillment, the press release said.
The company leased 1.6 million sqm in the CEE region in 2017. New lease agreements accounted for just over 500,000 sqm, and lease renewals for more than 1 million sqm, with the balance in short-term agreements. The CEE portfolio occupancy rate was a record 97.4%. At yearʼs end, the Prologis CEE operating portfolio amounted to 4.4 million sqm.
Notable new leasing activity in Hungary included 19,600 sqm with a leading clothing and homeware retailer in Gyál near Budapest, the press release noted.
In 2017, Prologis began construction of nine buildings totaling 170,200 sqm in the CEE - 32% of this being built-to-suit and 68% speculative development. This activity is part of what Prologis says is a selective development strategy in key markets with strong demand amid low vacancy rates. Also last year, Prologis delivered 15 buildings totaling 275,000 sqm; among those, three buildings were started and completed in the same year. All completed buildings were 95% leased.
In Hungary, the company leased a record 316,300 sqm and closed out the year with a record 99.5% occupancy. Prologis delivered two new buildings in Hungary totaling 21,000 sqm.
“Demand for our properties was strong in 2017, and we were able to record continued rental level increases, mainly due to lack of new supply,” said László Kemenes, senior vice president and country manager at Prologis Hungary.