Greater Budapest

Industrial properties, warehouses, logistic parks

The Central Hungary region holds 42% of Hungary’s total modern industrial stock (ca. 8.3 million sq m), which is the highest concentration amongst the three major regions. This stock is further concentrated across Budapest’s agglomeration area, predominantly along the M0 ring road or in its vicinity. Only a handful of city logistics schemes and smaller production facilities fall within the city’s administrative border. Compared to the other two regions Central Hungary also has a towering ratio of developer-led stock, as 58% of its stock fall under this category. Largely due to proximity to the capital city, most properties in the region were built purposely for the leasing market as opposed to the dominance of owner-occupied schemes in the countryside.

In terms of new development, the late 2000’s can be considered the peak years. In the five-year period from 2005 to 2009, two-thirds of countrywide industrial development activity took place in Central Hungary, involving all significant international and local developers present in the country. In the post-crisis years development shifted to the countryside, as the market for speculative projects contracted to extremely low volumes by 2011. Since then, the vast majority of new developer-led projects have catered to build-to-suit orders.

2016 brought a turning point in development in the region, as a result of the preceding years’ strong demand and continuously declining vacancy. Consequently, the first half of 2017 saw 61,500 sq m of new industrial space handed over, notably in the form of two buildings in Prologis Park Budapest - Sziget (21,000 sq m) and two buildings in Budapest Dock Szabadkikötő (20,000 sq m). Of the 3.5 million sq m total stock in the region, 1.9 million sq m of developer-led stock in the agglomeration area is monitored by the Budapest Research Forum (BRF) on a quarterly basis – this essentially forms the so-called speculative industrial stock.