News Article Colliers Hungary industrial
by Ákos Budai | Industrial

This more intense activity observed on the Hungarian industrial property market is fuelled by an increased number of leasing and sales transactions that resulted in the net absorption rate outpacing the new supply. From a development perspective the market is experiencing a new turn, as a number of speculative projects were initiated again, which was not the case for many years, as since the economic downturn, developers were almost exclusively focusing on build-to-suit type of projects.


Recent transactions outline that there is an increased activity in the industrial property market both in the Budapest region and in countryside locations. The range of tactive market players has become wider and there are new companies arriving as well - especially from the automotive supplier and the electronics sectors. Investments from the automotive industry reached a new record this year representing close to 70% of total foreign direct investments, with the domination of German companies, totalling the investments of €1.5 billion.
 
Hungary’s important role in the regional automotive industry is unquestionable, and it is believed, that this increasing activity, together with the positive market atmosphere is expected to result many more automotive companies to arrive to Hungary and the region.
 
Sona BLW, a German-Indian automotive supplier company can be mentioned as one of the examples. They only had manufacturing locations in India, U.S. and Germany, but their 10 year lease agreement for 4,200 sqm (with an expansion of further 4,200 sqm by Q3 2017) in Polgár Industrial Park, with the investment of HUF4.2 billion, was the first in the CEE region. 
 
Another example for the increasing interest towards Hungary is the sale transaction of the Samsung Electromechanics Industrial site – including a 12 ha plot and a 13,000 sqm building – located in Szigetszentmiklós, Leshegy Industrial Park, adjacent to the M0 ring road. The transaction was closed in 2016 Q3, following a less than one year of intensive marketing activity. The buyer was a Chinese based production company called Express Luck, a well know brand in the television production / assembly sector.
 
As a further industrial site sale transaction, the Unicredit Leasing owned – used by Europapier – warehouse and office building in Törökbálint, Budapest suburban area has been sold recently. The 4,900 sqm building was bought by a German based trading company specialized for promotional gifts. 
 
Colliers acted as an exclusive agent to the owners in all three transactions.
 
The share of industrial type deals from the total investment volume has almost doubled in the first half of 2016 compared to the whole year of 2015. This is mainly the result of the number of portfolio transactions realized in the sector during H1 2016. CTP acquired some 135,000 sqm of warehouse space through a number of transactions, while Blackstone took over the entire Hungarian logistics portfolio of Immofinanz accounting for approximately 100,000 sqm. Colliers also witnessed a gradual increase in average deal sizes for a number of years now in each sector.