Record high demand for industrial space in Budapest

17th July 2017 | Ákos Budai

Total demand on the Budapest industrial property market amounted to 212,750 sqm in Q2 2017, which is the highest quarterly volume ever on record. The Budapest Research Forum published its quarterly industrial market analysis.

In the second quarter of 2017 two buildings were added to the industrial stock with a total size of 20,380 sqm. BILK Logistics Park was expanded by a new 8,790 sqm warehouse, whereas BRF added an 11,590 sqm warehouse to the Greater Budapest industrial stock, which was recently bought by M7 Real Estate. The modern industrial stock in Budapest and its surroundings stands at 1,953,790 sqm at the end of Q2 2017.

Total demand amounted to 212,750 sqm in Q2 2017, which is the highest quarterly volume ever on record. Renewals accounted for 75% of the total take-up, while the share of new lease agreements made up 19%. Two pre-leases were signed during the quarter, totalling 10,980 sqm and representing 5% whereas the remaining 1% was generated by expansions.

BRF registered 24 industrial transactions in the second quarter, out of which five lease agreements were signed for more than 10,000 sqm. The average transaction size was 8,865 sqm in the quarter which is significantly larger than the typical deal size.  
 
98.5% of the leasing activity was recorded in logistics parks where the average deal size was 11,030 sqm. The average deal size in city logistics schemes equated to 631 sqm.
 
The largest transaction of the quarter was a renewal on 95,000 sqm in BILK in addition to which a 5,730 sqm pre-lease agreement was concluded by the same occupier.  The largest new lease was signed in Prologis Park Budapest – Harbor Park on 13,640 sqm.  

The vacancy rate declined by 0.4 percentage point q-o-q reaching a record low of 5.5% at the end of Q2 2017. In total 108,240 sqm is currently vacant and there is no scheme which offers more than 10,000 sqm available adjacent space. 
 
Net absorption remained positive in Q2 2017 and amounted 27,300 sqm.