by Ákos Budai | Industrial

Total leasing activity amounted to 84,600 sqm on the Budapest industrial market in Q3 2016, which marks a 9% decrease on the previous quarter and a 37% ascent on a yearly basis.  The Budapest Research Forum has published its quarterly industrial market analysis.


In the third quarter of 2016 one development was completed, the new building of the Prologis Park Budapest – Sziget offers 21,510 sqm modern industrial space in Szigetszentmiklós. In total the modern industrial stock in Budapest, and its surroundings stands at 1,909,310 sqm.  
 
Total leasing activity amounted to 84,570 sqm in Q3 2016, which marks a 9% decrease on the previous quarter and a 37% incline on a yearly basis. The demand was generated mostly by new lease agreements with 43% of TLA, while renewals made up 28% and expansions 16%. Due to limited available space several large pre-leases were signed during the quarter, totalling 11,560 sqm and thereby representing 13% of the total demand for the period. 

BRF registered 31 industrial transactions in the third quarter, out of which one new lease agreement exceeded 10,000 sqm. The average deal size was 2,728 sqm, 38% below the last quarter’s result. 
 
Approximately 95% of the leasing activity was recorded in logistics parks where the average deal size was 2,961 sqm. The average deal size in city logistics schemes equated to 1,155 sqm.

The largest lease was signed in K-Sped 17, a new lease agreement on 14,870 sqm. The largest pre-lease was signed in BILK on 5,960 sqm. The largest renewal was a 6,080 sqm deal in the Prologis Park Budapest - Harbor Park, while the largest expansion took place in a ProLogis Park Budapest – Gyál on 6,850 sqm.

The vacancy rate declined 0.7 percentage points q-o-q reaching 8.9% at the end of Q3 2016. In total 169,320 sqm is currently vacant with only three schemes offering available space above 10,000 sqm. After reaching a negative territory in Q2 2016, net absorption managed to recover and amounted to 13,340 sqm in this quarter.
 
The Budapest Research Forum (BRF) comprises CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary. BRF analyses modern industrial properties located in Budapest and Pest County, completed after 1995 for letting purposes, comprising a minimum of 2,000 sqm space in terms of city-logistics or minimum of 5,000 sqm space in terms of logistics park warehouses. The industrial stock excludes owner occupied buildings.