Almost 500,000 sqm Rental Logistics Real Estate Inaugurated in 2022

Last year, 482,000 sqm of new industrial and logistics properties developed for renting were inaugurated in Hungary, with 30% of developments in rural areas, the Association of Hungarian Logistics Service Centers (MLSZKSZ) said on Thursday, according to a report by state news wire MTI.

The total stock of industrial and logistics real estate properties developed since 2005 for renting exceeds 4.5 million square meters, of which 1.4 million are located in rural areas, the association said.

Milla Kalmár, a senior associate at 108 agency, said international trends are influencing domestic growth. To ensure smooth production and customer service, companies store 20-30% more goods locally than before the pandemic, requiring significantly more warehouse space, she said.

The industrial and logistics real estate market was also driven by foreign direct capital investments and one of the biggest winners of this in Europe was Hungary, she added.

Growth is set to continue, in Budapest 380,000 sqm of rental logistics real estate is under development, and in rural areas 130,000 sqm. A significant part of developments uses a lot of green solutions, increasing construction costs, as well as already record-high rents.

The vacancy rate for properties is just 4% nationally. The share of pre-lease contracts is at 50% in the capital and 75% in rural areas. Tenants should think at least 9-12 months ahead, because the leasing process can take up to 6-9 months, Kalmár said.

MLSZKSZ includes almost 90% of Hungarian logistics service centers.