The lack of
labor force in the construction industry has an effect of increasing the labor
costs, as well as the overall construction costs, and the construction time of
a bigger project can exceed even 8 months. Additionally, there is a shortage of
supply in terms of so called ’plug and play’ development lands, that are
immediately ready to develop. Currently rents are up to EUR 3.6 - 3.9
/sqm/month for big box-logistics and up to EUR 4.5 - 5.5 /sqm/month for city
activity showed significant increase in H2 2016 and H1 2017 as five new
projects – 50,000 sqm in total – were handed over so far and an additional
50,000+ sqm (Inpark Páty, East Gate Business Park and Budapest Dock
Szabadkikötő) is expected to be handed over until the end of the year. These
speculative buildings are typically pre-leased by the end of the construction,
thus they do not appear in the supply as vacant spaces.
strength of the market is perfectly reflected by the fact that the new leases,
expansions and pre-lease transactions were decisive elements, however due to
the low number of new developments realized, market activity was still driven
by lease renewals (65%).
“Similar to the
rental market, sales market follows the same trend, where assets with
reasonable pricing and good quality can change hands even within a few months.
Colliers’ major selling successes this year were the sale of the 35,000 sq m
building of Jacobs Douwe Egberts in Budapest XV. district, and the sale of
Scanfil’s 15,450 sq m industrial site in Biatorbágy.” – added Tamás Beck.
International’s latest market report of the industrial market can be downloaded here.
Source: Colliers International, BRF