New discovery: There is life in the warehouse market outside of Budapest
The industrial properties examined by the Budapest Real Estate Consultants Coordination Forum (BIEF), which brings together the largest domestic and international real estate agencies, are located in Budapest and Pest County, after 1995, due to leasing. Their useful area is a minimum of 2,000 square meters for urban logistics and 5,000 square meters for logistics parks. The land used by the owner is not included in the surveyed industrial property stock.
However, the BIEF has now announced that it has begun and will continue to survey the real estate portfolio outside the capital so that it can publish data on the total domestic portfolio in the future. Currently, 106 buildings have been identified, covering 1,191,340 square feet. Of this, 73,880 square feet are vacant, providing a vacancy rate of 6.2 percent.
So far, so much has been reported, but it is known that the total non-Budapest or agglomeration stock could be as much as two or three times as much. There are still countless unused halls, warehouses, dilapidated factory buildings or neglected areas in the county capitals that could be used with varying degrees of expenditure.
Most of the affected property, up to millions of square meters, is privately owned, smaller parts of the municipality. Most of the latter certainly don’t have the money right now to develop these and then rent them out. So far, more in line with its industrial parks, it has been able to generate a nice income by relocating a larger, usually foreign manufacturing company. The government also supported the establishment of such parks in a separate program.
Until there is an even more accurate picture of the industrial real estate available, the manufacturing, logistics and commercial companies that account for the bulk of the demand will be forced to catch up with the current stock, which is otherwise gaining weight. BIEF has recently released data for the third quarter of this year in Budapest and the vicinity of the capital.
Well, in the third quarter of 2021, the speculative stock of the agglomeration of Budapest and the Budapest area expanded by two buildings, a total of 14,210 square meters. The East Gate Business Park was handed over in Fót and the Login Business Park in Dunakeszi. By the end of the quarter, total modern industrial / logistics leased space had grown to 2,567,510 square feet.
Teqball rents a warehouse in Biatorbágy
Teqball Kft., Which has domestic roots, has signed a 10,000 square meter lease agreement in the CTPark Budapest West industrial park in Biatorbágy. The investment by the ltd. its manufacturing processes take place continuously at one location. The main product of the rental company, the Teq table, was developed by Gábor Borsányi, György Gattyán and Viktor Huszár. The 202,000-square-meter CTPark Budapest West property is located next to the M1 motorway, near the M0 ring road, 19 kilometers from downtown Budapest. From a logistical point of view, it is an ideal location for businesses doing business in Hungary and the Central and Eastern European region.
With its latest development handed over in Biatorbágy, the CTP company, which deals with the development of industrial real estate with an international background, is increasing its portfolio to a gross leasable area of 64,000 square meters, and logistics real estate has gained a market-leading position in Hungary. Work on the company’s 235,000-square-foot new building in the company’s industrial parks is currently underway, and construction work on the 322,000-square-foot new building will begin in the near future.
HelloParks, part of the Futureal Group, is developing a 400,000-square-meter logistics park in Páty, in the western part of Budapest. With this, the total leasable area of its planned developments around the capital reaches 900 thousand square meters. The company is also making good progress in developing its warehouse base in Fót and Maglód.
The proportions in the graph above have not changed this year either. Logistics providers continue to be the largest tenant companies, which explains the boom in e-commerce and the growing need for warehouses for companies. For example, a few days ago, MediaMark announced that it had expanded its seasonal warehouse to 70 in preparation for Black Friday.
In the third quarter, total tenant demand in the metropolitan and surrounding markets was 143,530 square feet, down 19 percent from the same period last year. Demand without contract length was 6,690, a final value of 47 meters for connection registered in the same period last year. In demand, extensions took the prime with a share of almost 54 percent. Pre-leases were 26 percent, while new contracts accounted for 17 percent. The remaining 3 percent of total quarterly demand came from expansions.
The number of contracts was moderately strong, with a total of 23 leases with an average transaction size of 6,240 square feet in the third quarter of 2021. Five of the transactions exceeded 10,000 square feet. The vast majority of contracts are still concluded in ‘big-box’ logistics parks, while the urban-logistics stock has registered only two agreements. The biggest deals of the quarter were extensions: a 27,820-square-meter building in the Prologis Park Budaörs building and the GLP Üllő Logistics Center building. 17,030 square meters.
One of the most important measures of this market is also the proportion of vacant space. Industrial and logistics companies are still in full swing, so occupancy is up again from the previous quarter, with most at 0.5 and high reaching 96.5 percent. At the end of the now-completed quarter, 89,710 square feet of industrial-logistics space was vacant, and more than 5,000 square feet of vacant space was available in three buildings. Net absorption was 36,220 square meters.