The Hungarian industrial property market has shown signs of recovery in the third quarter after a low level of development activity in the first half of the year, according to a report by property advisor CB Richard Ellis.
The Hungarian industrial property market has shown signs of recovery in the third quarter after a low level of development activity in the first half of the year, according to a report by property advisor CB Richard Ellis.
Almost 38,000 m2 of modern warehouse space has been added so far this year - of which 32,000 m2 is speculative and only 6,000 m2 is 'built to suit'. 'The high ratio of speculative developments coupled with strong Q3 take-up signifies a renewed confidence in the market,' CB Richard Ellis said. As a result of robust take-up vacancy rate has decreased by 24 basis points to 11.05%. However, prime rents have remained stable over the course of the third quarter of 2006 with an average lease length of five years.
The industrial property market in Hungary continues to be focused on the greater Budapest areas. Noting the 30-kilometre radius around the capital has seen remarkable growth in term of space for logistics, warehousing and light industrial manufacturing in the last six years, the report said the high rate of speculative development is a sign of confidence among developers in the Budapest region.
The percentage of built to suit new development was about 16% in Q3 2006 but should reach 24% for the whole year. CB Richard Ellis said the quarterly gross take-up level reached 55,340 m2 in Q3 2006, significantly ahead of take-up in the first quarter (37,000 m2).
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