Budapest Research Forum 2010 Q 1 industrial report

Members of the Budapest Research Forum include CB Richard Ellis, Cushman & Wakefield, DTZ, GVA Robertson, Jones Lang LaSalle and King Sturge. The Forum decided to monitor the industrial market on a quarterly basis as from Q1 2010 and has collated all information and now reports the industrial market data for Q1 2010.

According to its methodology the BRF analyses modern industrial properties located in Budapest and Pest country, completed after 1995 for letting purposes, comprising minimum 2,000 sq m space in terms of city-logistics or minimum 5,000 sq m space in terms of big-box warehouses. The industrial stock excludes owner occupied buildings.

 The total stock of the Budapest industrial market reached 1,774,020 sq m by the end of March. BRF differentiates the industrial properties upon two conditions: location and technical specification and categorizes them as so called big-box type and city-logistics type. Big-box warehouses are typically located outside of Budapest along the highways and comprise of minimum 5,000 sq m space. The total area of these larger sheds reached 1,604,600 sq m at Q1 2010. City-logistics warehouses are located in Budapest, comprise a minimum of 2,000 sq m space and represent 9% of the total industrial stock with 169,440 sq m space.

New supply of modern industrial properties was low in Q1 2010 as only two warehouses were completed on 21,800 sq m. While the expansion of Európa Center accounts for a city-logistics property, in Dunakeszi Industrial Park a big-box warehouse was handed over.

Due to the limited new supply, the average vacancy rate stands at 19.4%. In big-box warehouses the rate is at 17.7% while in city-logistics schemes it stands at 35.1%

In the first quarter of 2010 36,500 sq m was let. Most of the take-up was generated by new agreements and out of this volume lease renewals represented only 4%. The largest transaction was a pre-lease agreement on 17,000 sq m, signed by Oriflame in Üllő Airport Logistics Centre for a built-to-suit hall. Due to this transaction pre-leases represented 47% of the total leasing activity. Further larger transactions were signed in WestLog DC on 5,400 sq m for Retz Bútor and in Rozália Park on 2,750 sq m for Prista Oil. Out of the total leasing activity 9.4% was registered in city-logistics projects and 90.6% in big-box warehouses, meaning that the distribution of demand was similar to the ratios of the property types in the total stock.