Industrial market analysis Q4 2012 (BRF)

Budapest Research Forum (BRF, of which Eston International is a member) reports its freshest industrial property market report on the 4th quarter of 2012.

By the end of 2012 modern industrial stock in Greater Budapest reached 1,822,933 sq m following the handover of three new buildings with a total area of 16,448 sq m. Two of these had been pre-leased partially or entirely before the completion already.

After the record-breaking statistics of Q3, last quarter’s demand remained quite modest. Total leasing activity (TLA) registered 22,181 sq m – the lowest on record this year. 52% of TLA was made by new leases or expansions, while renewals accounted for 48%, down from 62% last quarter.

With the exception of Waberer’s renewal, there was no lease signed for space above 5,000 sq m in last quarter, creating a remarkable change compared to the previous quarter. Average deal size went down from 6,400 sq m in Q3 to 1,300 sq m in Q4.

For the first time this year, total stock increased in Q4 when three parks expanded, each by adding a new building. Airport City’s was 6,884 sq m, South-Pest BP’s was 5,817 sq m and Europa Center’s was 3,747 sq m. The latter remains vacant at present.

Average vacancy rate in logistics parks did not change in Q4, remaining at 19.1% following the sharp decrease seen in Q3. In case of city logistics the rate increased to 21.7%. Measured against the total industrial stock in Greater Budapest, the rate stands at 19.4% with 353,350 sq m space being vacant at the end of 2012.

Total leasing activity on an annual level reached 354,743 sq m, up by 8% on 2011. However renewals’ share increased further, making take-up in 2012 short on the previous year’s level. In the first half 2012 net absorption was negative but it turned strongly positive in H2. Annual net absorption reached 40,652 sq m.

Download full report in PDF.