industrial destinations hungary 2014€¦ · koloman handler, wescast luk, bpw takata suzuki,...
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INDUSTRIAL DESTINATIONS HUNGARY 2014CBRE | RESEARCH | HUNGARY
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FOREWORDHungary is one of the major industri-al workrooms on the continent. Due to its strategic location in Central Europe, strong industrial heritage and highly educated but still affordable workforce the country has been very attractive for foreign direct invest-ments in the manufacturing and logis-tics sector for the past 20 years.
Despite the undoubted leading eco-nomic role of the capital city, some highly industrialised areas have lately emerged on the pan-Hungarian industrial scene as key regional sub-markets. Budapest’s share in national industrial output is only 15% which is comparable to what, some of the major regional hotspots have. Never-theless, the industrial property market has different characteristics in pan- regional locations compared to the capital city.
New investments since 2011 put more light on the pan-regional indus-trial market which had been off the radar of real estate researchers who limited their scope to the Greater Budapest area only. The regional markets have never been analysed as a whole and thus no publications were available which would have given an overall picture across differ-ent geographies.
WITH THIS REPORT, CBRE RESEARCH AIMS TO GIVE A BETTER UNDERSTANDING OF THE PAN-REGIONAL INDUSTRIAL MARKET, COMPARING VARIOUS LOCATIONS ON THE SAME BASIS AND EXPLORING MARKET TENDENCIES.
IND
USTR
IAL
DE
STIN
ATIO
NS
? Where are the major industrial hubs outside of Budapest?
? What core industries charactarise the Hungarian economy?
? Who are the biggest industrial occupiers?
? How did growth dynamics change across geographies?
? What real estate solutions are typical in various locations?
? What options do new occupiers have if they decide to move to Hungary?
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GENERAL INDUSTRIAL OVERVIEW
20% in 2009 2,090 in 201323% in 2012 1,056 in 2009
THE MANUFACTURING SECTOR ACCOUNTS FOR 23% OF TOTAL GDP WITH AN INCREASING SHARE IN RECENT YEARS.
The key drivers of manufacturing are the automotive sector (with a share of 23%); the electronics sector (12%) and the food industry (11%). Pharmaceutical production has an excellent reputation with a strong R&D background; however, its share from the total industrial production is only 3%.
MANUFACTURING: DOUBLE-DIGIT GROWTH IN 2014
Share of manufacturing sector in total GDP Trade surplus (billion HUF in nominal prices)
Hungary has a small and highly open economy. The country is strongly export oriented with solid ties to other countries of the European Union. The EU-28 has a share of 77% in the country’s export volume. The no.1 export destination is historically Germany which absorbs 26% of the total export. Since the economic slowdown of core European markets, the Hungarian
export increasingly targets other destinations where GDP growth is higher. Central-European countries, especially the members of Visegrad Group (Poland, Czech Republic and Slovakia); Eastern-Europe, Central-Asia and the Far-East are all registering increasing export shares. The government also aims to strengthen the trade with these regions.
COUNTRY’S ESSENTIALS
TOTAL POPULATION (2013) 9.909 million
EMPLOYED PEOPLE (end of 2013) 4.12 million (end of 2013)
EMPLOYED PEOPLE IN MANUFACTURING 0.83 million (21% from total)
UNEMPLOYMENT RATE (September 2014) 7.4%
GDP PER CAPITAL, IN PPS (2013) 67% (EUR 18,300)
GDP GROWTH RATE (Q2 2014) 3.9% (year-on-year)
SHARE OF MANUFACTURING FROM TOTAL GDP (2012) 22.7%
AVERAGE MONTHLY GROSS SALARY (Q1 2014) EUR 766
TRADE SURPLUS (2013) HUF 2,090 billion
Sources: Hungarian Central Statistical Office, Eurostat
Germany
26% New EU members
23%
EU
Visegrad countries
13%
77%
MAJOR EXPORT DESTINATIONS (share from total export, 2013)
Source: Hungarian Central Statistical Office
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Audi in Gyo r produces serial cars and operates a world-wide known research and development centre. Most recently it opened a regional logistics centre nearby the factory. In terms of revenue, Audi is the second largest company in Hungary, ranked after MOL (Hungarian Oil and Gas Company).
Geographically, the automotive sector is concentrated in the Western part of the country, especially in two NUTS 2 regions: Western-Transdanubia (Gyor, Szentgot-thárd) and Central-Transdanubia (Tatabánya, Esztergom). Three out of the four oper-ating OEMs are present in this part of the country with an established supplier net-work. The most recent investment was done by Mercedes-Benz when they opened their plant in the South Great Plain region (Kecskemét), some 90km south of Budapest in 2012.
CORE INDUSTRIES AUTOMOTIVE PRODUCTION
Hungary has a strong and established automotive industry which gives almost one-quarter (23%) of the country’s total industrial production and adds up to 30% in total export volume. It is the fastest growing sector in recent years which boosts the Hungarian economy and provides job for a total of 115,000 people – including suppliers.
Automotive companies are taking advantage of the geographical proximity and the critical mass which the sector has already reached. The basic pillars of the Hungarian automotive industry are the OEMs (Original Equipment Manufacturers) which have gradually expanded their production capacity since the early 1990s.
Currently there are four OEMs present in Hungary: General Motors, Audi, Suzuki and Mercedes-Benz. Audi is the largest player and has established the world’s second largest engine plant in Gyor.
SHARE FROM INDUSTRIAL PRODUCTION (2013)
SHARE FROM EXPORT (2013)
23% 30%
OEMs have attracted a wide range of equipment manufacturers and other suppliers. These companies have settled down in the close vicinity of the OEM factories - in municipality-led industrial parks predominantly in the North / Northwest of the country.
LARGEST INDUSTRY LARGEST EXPORT SOURCE OROSZLÁNY
GYŐR
MISKOLC
ESZTERGOM
SZÉKESFEHÉRVÁR
MEZOKÖVESD
DUNAÚJVÁROS
KECSKEMÉT
SZOMBATHELY TATABÁNYA
NYÍREGYHÁZA
SZENTGOTTHÁRD
BUDAPEST
Audi, Dana, Nemak, Rába,
Rehau
BorgWarner,Koloman Handler,
Wescast
LuK, BPW
Takata
MichelinSuzuki, Kirchhoff
Opel (GM)
Harman, Denso
Mercedes-Benz,Knorr-Bremse
Hankook
Bosch
Bridgestone, AGC, Delphi, Otto Fuchs Continental,
Ibiden, ThyssenKrupp
MAJOR AUTOMOTIVE COMPANIES IN HUNGARY
SLOVENIA
AUSTRIA
SLOVAKIA
UKRAINE
ROMANIA
SERBIACROATIA
Source: Hungarian Central Statistical Office
Many of the world’s largest TIER-1 suppliers are present in Hungary, such as Bosch, Bridgestone, Continental, Delphi, Denso, Lear, Luk and Michelin. Domestic companies are mainly active on the TIER-3 and 4 levels.
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SECOND LARGEST PROPORTION
Electronics manufacturing is the second largest industry in Hungary. It gives 12% of total industrial production and 16% of export volume. The country is the largest electronics producer in the region, accounting for a quarter of the Central-European total electronics production.
Some of the large international producers (such as Nokia, Panasonic, Samsung) who had been present in Hungary for two decades, signifincantly downsized their European operation and therefore downsized their real estate footprint in the country.
Hungary has a key position in the electronics suppliers’ industry: six out of the ten largest TIER 1 suppliers in Eu-rope (Flextronics, Foxconn, Jabil, Sanmina, Videoton, Zollner) have a presence in the country.
12% 16%
Similarly to the automotive sector, electronics manufacturers show a relatively large geographic concentration. They have the largest footprint in the Central Transdanubian (Komárom, Tatabánya, Székesfehérvár) and in the Central Hungarian (Budapest and Vác) NUTS 2 regions. Pécs is the only city which is located outside of Northern-Hungary.
ELECTRONICS PRODUCTION HAS THE SECOND LARGEST PROPORTION BOTH OF INDUSTRIAL PRODUCTION AND EXPORT.
PÉCS
VÁC
KOMÁROM
TISZAÚJVÁROS
SZÉKESFEHÉRVÁR
SÁRVÁR
TATABÁNYADEBRECEN
BUDAPEST
JabilFlextronics
ZollnerNational
Instruments
Nokia*Foxconn
Flextronics
Sanmina
Videoton Flextronics General Electric
Prettl
CORE INDUSTRIES ELECTRONICS MANUFACTURING
SLOVENIA
AUSTRIA
SLOVAKIA
UKRAINE
ROMANIA
SERBIA
CROATIASource: Hungarian Central Statistical Office
SHARE FROM INDUSTRIAL PRODUCTION (2013)
SHARE FROM EXPORT (2013)
* Production wil be terminated by end of 2014
1110
M1
M7
M7
M3
M5
M0
M6
M6
M3
M35
M30
M43
M6
HUNGARIAN INDUSTRIAL SUBMARKETSCBRE Research have differentiated eight industrial submarkets in Hungary based on geographic density and overall stock size. Two of them are part of the Greater Budapest area, whilst the rest are regional hubs. The industrial property market shows a relatively high geographic concentration.
Key common characteristics of all indsutrial hubs include the direct vicinity to the national motorway network. The development of the industrial real estate market is a true reflection of the geographical concentration of the Hungarian industrial production: with the exception of
a small submarket (M5 Central) all the submarkets are in the northern part of the country – predominantly along the Western motorway (M1) or the Eastern motorway (M3).
The logistics market shows an even higher geographic concentration: 85% of modern logistics and warehouse schemes are located in Budapest and its agglomeration as the capital sits at the ori-go of the country’s transport network. The most important transit route, connecting Western Europe and South-East-ern Europe (TEN IV) passes the capital.
The strong industrial feature of these regions can be explained by the large number of foreign production companies who chose to settle at this part of the country due to its vicinity to the Western-European export markets, the better infrastructure and the historically more established industrial culture.
• Not surprisingly the Budapest agglomeration is the largest submarket which itself accounts for over 40% of the total Hungarian stock and reaches nearly 2.5 million sq m – including built-for-lease and owner occupied space.
• The submarket in Central-Transdanubia, M1 East (Tatabánya, Komárom, Esztergom) is the second largest hub with slightly under 1 million sq m.
• The submarket in West-Transdanubia, M1 West has the highest geographical density of industrial stock located basically in one city, Gyor.
• In the East of the country submarkets are smaller as a rule of thumb. M3 West, the smallest submarket based on overall stock is in the NUTS 2 region of Northern-Hungary.
SLOVENIA
AUSTRIA
SLOVAKIA
UKRAINE
ROMANIA
SERBIACROATIA
Prologis Park Budapest-Gyál
ELECTRONICS PRODUCTION HAS THE SECOND LARGEST PROPORTION BOTH OF INDUSTRIAL PRODUCTION AND EXPORT.
BUDAPEST AGGLOMERATION ACCOUNTS FOR 40% OF THE TOTAL HUNGARIAN STOCK
M1 WEST M3 WESTM1 EAST M3 EASTM7 CENTRAL AGGLOMERATION M5 CENTRALBUDAPEST
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PRE-CRISIS DEVELOPMENT BOOM WAS BOOSTED BY SPECULATIVE PROJECTS.
POST-CRISIS YEARS ARE DRIVEN BY OWNER OCCUPIED AND BTS DEVELOPMENTS.
Occupational structure shows large differences across geographies. Whilst in Greater Budapest (the city and its agglomeration) most of the schemes are leased, the pan-regional market is dominated by owner occupied schemes. The only exception to this rule is M1 West (Gyor).
There are four hubs where the average vacancy rate is over 10%. The Budapest Agglomeration submarket has the highest vacancy rate (over 15%) due to the Immediate availability in built-for-lease premises. In M1 East and M3 East a number of large vacant owner occupied schemes increase the overall vacancy.
The Hungarian industrial stock is relatively new as almost two-thirds of it was delivered in the past ten years. Annual new supply was generally high between 2005 and 2009, especially in Greater Buda-pest. This period was followed by a sharp decline, bottoming in 2011 with less than 100,000 sq m of new supply.
In recent years, development activity is on the rise again with constantly growing supply figures which has already reached pre-crisis levels. This rebound is boosted by a number of large regional owner-occupied and BTS developments, mainly for the manufacturing sector.
BUDAPEST AGGLOMERATION ACCOUNTS FOR 40% OF THE TOTAL HUNGARIAN STOCK.
Leased Average vacancy rate (right)Owner occupied
18%
15%
12%
9%
6%
3%
0%
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0 M3 W
est
M5
M7
M1 W
est
M3 East
Budapest
M1 East
Budapest Agglom
eration
(sq m)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
(sq m) (sq m)
Chart: Annual New Supply and Total Stock SizeChart: Stock Size, Split of OO / Leased Stock and Vacancy Rate by Hubs
Completion volume Stock size (right)
1514
BUDAPEST CITY
The city of Budapest has a relatively large extension with a total area of 525 sq km. With 1.74 million people living in town, the population density is rea-sonably low. The former industrial belt in the city has been only partially rezoned and reused so there are vast brown-field areas on the territory of the capital city waiting for future functions – in-cluding warehousing/city logistics. As a remnant from the industrial heritage of the city, low quality industrial schemes still operate as demand for these types of schemes is substantial.
Geographically, both ‘A’ category city logistics schemes and ‘B’-‘C’ grade buildings, are primarily lo-cated on the Pest side, mainly in District 9, 10 and 13 and 15. These districts are located at the vicinity of the outer ring road, thus halfway between the central and the peripheral parts of the city. On the Buda side, only District 3 and 11 comprise relevant industrial stock.
The largest city logistics schemes are located along the access roads of motorways and in some cases have direct railway connection.
GREATER BUDAPEST CAN BE SPLIT INTO TWO SUBMARKETS, THE CITY ITSELF AND ITS AGGLOMERATION.
GEOGRAPHY
South Pest Business Park
Whilst in Budapest, smaller city logistics schemes dominate the market, in the agglomeration there are only big-box schemes located in logistics parks.
LARGEST OCCUPIERS (sq m)Waberer’s 80,000 Owner occupied
Knorr-Bremse 30,000 Owner occupied
Flextronics 23,000 Owner occupied
Ghibli 12,500 Leased
REAL ESTATE INDICATORS
Total stock (sq m) 700,400
Available stock (sq m) 76,400
Immediate pipeline* (sq m) 21,000
Vacancy rate 11%
Share of leased area 82%
* The potential volume which would be available on the market within 10 months from enquiry. We included only those areas which are owned by a real estate developer and have a valid building permit. Expansion areas of owner occupied schemes are excluded.
REAL ESTATE MARKET – KEY DETAILS• In Budapest-City the total modern industrial stock stands at 700,400 sq m.
• The share of leased schemes is 82%, the highest proportion by far among all the industrial hubs.
• Current availabilty is 76,700 sq m, indicating a vacancy rate of 11%.
• Although, only 21,000 sq m currently has a valid building permit, available brown-field areas allow for significant city-logistics developments if the market moves that direction.
Source: CBRE
Big-box warehouse (logistics parks)
City logistics schemes
M211
M3
M0M31
M0
M0
M5
M4
M7
M1
WEST
SOUTH
NORTH
Ring Road
M6
Distribution of leased schemes in the Greater Budapest Area
M51
1716
REAL ESTATE MARKET - DESCRIPTION VACANCY RATE GAP BETWEEN BIG-BOX AND CITY LOGISTICS SCHEMES HAS NARROWED SINCE 2011.
HALF OF THE EXISTING STOCK WAS DELIVEREDBETWEEN 2007 AND 2010.
35%
30%
25%
20%
15%
10%
5%
0%
Q32010
Q12011
Q32011
Q12012
Q32012
Q12013
Q32013
Q12014
Q32014
Logistic Park City logistics
160,000
120,000
80,000
40,000
0
800,000
600,000
400,000
200,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart: Annual New Supply and Total Stock Size Chart: Changes of Vacancy Rate in logistics Parks and City Logistics Schemes
The development boom peaked here between 2005 and 2010. Since 2011, the annual completion level was around 10,000 sq m each year. In 2014, no new developments are scheduled to be handed over.
In recent years the average vacancy rate in city logistics schemes has shown a downward trend. Until 2011, these small-er schemes steadily registered higher vacancy rates (5-15 pps difference) than larger big box units (located mainly in the agglomeration). This gap has significantly narrowed during 2012 and from Q1 2013 we have witnessed a reversed picture, indicating an increasing demand for the more centrally located buildings.
(sq m) (sq m)
Completion volume Stock size (right)
1918
Logisitics parks were built directly along the motorways. The highest geographic concentrations can be observed at the Southern section of the city’s motorway ring road (M0) and at the junction of M0-M1-M7 motorways which ben-efit from the most intense transit traffic. Geographically, the agglomeration can be split into three areas: the Northern, Southern and Western submarkets (see map).
The Southern submarket is the largest by far, comprising more than half of the leased schemes, whilst the North-ern submarket has a share of only 11%. Traffic flow at the Northern section of the motorway ring road is less intense as the the North-Western part of the ringroad is missing and it is unlikely that construction works will start before 2020.
REAL ESTATE INDICATORS
Total stock (sq m) 2,403,500
Available stock (sq m) 377,600
Immediate pipeline (sq m) 867,000
Vacancy rate 16%
Share of leased area 55%
BUDAPEST AGGLOMERATION
GREATER BUDAPEST CAN BE SPLIT INTO TWO SUBMARKETS, THE CITY ITSELF AND ITS AGGLOMERATION.
GEOGRAPHY
Prologis Park Budapest-Sziget
• The agglomeration area around Budapest comprises a total of ca. 2.4 million sq m of modern industrial space.
• This is roughly three-times larger than the stock located within the administrative borders of the city.
• Circa 55% of this volume is built for lease on a speculative basis.
• The rest of the stock is a mix of owner occupied schemes, primarily with production and warehouse functions.
• The average vacancy rate stands at 16%.• Apart from the available areas offered in leasable
big box units, there is a number of fully vacant (formerly owner occupied) schemes which also increases the overall vacancy.
REAL ESTATE MARKET – KEY DETAILS
The agglomeration area around Budapest comprises 40% of the total Hungarian industrial stock. Due to the fact the area sits at the origo of the country’s transport network, its share from modern logistics and warehouse schemes reaches 85%. LARGEST OCCUPIERS (sq m)
DHL 111,000 Leased
Aldi 80,000 Owner occupied
Geodis 50,000 Leased
HOPI 50,000 Leased
Auchan 37,500 Leased
Gebrüder Weiss 37,000 Leased/OO
DB Schenker 27,000 Leased
Source: CBRE
Big-box warehouse (logistics parks)
City logistics schemes
M211
M3
M0M31
M0
M0
M5
M4
M7
M1
WEST
SOUTH
NORTH
Ring Road
M6
Distribution of leased schemes in the Greater Budapest Area
M51
2120
REAL ESTATE MARKET - DESCRIPTION
SUPPLY IN RECENT YEARS IS NEGLIGIBLE COMPARED TO PRE-CRISIS YEARS.
WAREHOUSING AND LOGISTICS HAVE A LEADING ROLE EVEN IN THE NON-SPECULATIVE STOCK.
Note: as % of total non-speculative stock
VACANT 10%
Logistics 14%
Production (Automotive) 13%
Warehousing 35%
Production (Non-auto) 23%
Electronics 5%
M0-M5 Motorway Junction
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2,500,000
2,000,000
1,500,000
1,000,000
500,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart: Annual New Supply and Total Stock Size Chart: Split of Occupiers
61% of the currently existing stock was built between 2005 and 2010 which led to a huge oversupply as demand fell back with the economic crisis.
The average vacancy rate quickly surpassed the 20% threshold (in Q1 2009) and remained roughly at the same level since then. For sake of comparison, the market indicator generally stood under 10% before 2008. In the last four years only a handful of buildings were handed over with a total size of nearly 130,000 sq m. A further 870,000 sq m space can be delivered in the submarket. Warehousing and logistics have a leading role even in the non-speculative stock.
Among the owner occupied schemes, the warehousing sector has the highest share with 35% from the total modern stock. Food retailers (Aldi, CBA, Lidl, Penny Market, Spar) own the largest schemes, together accounting for 60% of the owner occupied warehouse area. Above that, Tesco and Auchan are operating in leased schemes, contributing to the share of warehousing in the built-for-lease stock.
M5 motorway towards Budapest
M5 motorway towards Kecskemét
M0 motorway
(sq m) (sq m)
Completion volume Stock size (right)
source: Google Maps
2322
REAL ESTATE INDICATORS
Total stock (sq m) 486,700
Available stock (sq m) 10,900
Immediate pipeline (sq m) 127,000
Vacancy rate 2%
Share of leased area 57%
LARGEST OCCUPIERS (sq m)
Audi* 72,000 Leased
Propex Fabrics 39,500 Owner occupied
Rudolph Logistics 30,000 Leased
Rehau 26,000 Owner occupied
DANA 25,100 Leased
M1 WEST IS THE MOST ESTABLISHED PAN-REGIONAL SUBMARKET
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
Kimle
Kunsziget
Mosonmagyaróvár
SLOVAKIA
AUSTRIA
Győr
M1 WEST
The M1 West industrial hub primarily consists of Gyor and its agglomeration. Some of the real estate stock is scattered along the M1 motorway between Gyor and the Austrian border – however, no other city is close to the importance of Gyor. Gyor belongs to the wealthiest Hungarian towns based on
purchase power statistics. Although Gyor togeth-er with its NUTS 3 region has a 3% share in the nation’s population, 10% of all industrial production is realised in this county alone. The industrial production per capita is the highest among all cities in the country.
GEOGRAPHY
Lébény
Hegyeshalom
• Modern industrial stock accounts for a total of nearly 500,000 sq m.
• M1 West has a negligible vacancy rate with only 2%. The city of Gyor is fully occupied, only immediate availaibility in the area is in Kimle.
• Almost 130,000 sq m can be developed on the market based on a potential BTS agreement. Most of this volume (100,000 sq m) could be realised by Prologis in Hegyeshalom.
• Share of leased areas reaches 57%, the highest figure among all regional submarkets.
REAL ESTATE MARKET – KEY DETAILS
Gyor has old manufacturing traditions and is now it the most industrialised city in Hungary. Due to its strategic location halfway between Budapest and Vienna, it has a growing importance as a warehousing/logistics destination as well.
0 15km
*including Audi’s logistics center only
2524
REAL ESTATE MARKET - DESCRIPTION
Almost two-third of the modern industrial stock was built after 2005. In 2013 alone more than 100,000 sq m new industrial space was handed over – including the new logistics centre of Audi.
The vast majoritiy of the real esate stock is located in the industrial park of Gyor, right next to the Audi and Rába plants.
LARGE OWNER OCCUPIEDAND BTS SCHEMES BOOSTED SUPPLY IN RECENT YEARS.
OCCUPIERS’ PROFILES ARECHARACTERISED BY EVEN SPLIT OF BUSINESSES.
Apart from the automotive sector, the largest occupiers include Propex Fabrics (non-auto production), Rudolph Logistics and Renault-Nissan (warehousing).
M1 West is the most established industrial destination among the pan-regional submarkets. It also has a substantial speculative stock which is rather negligible in other regional cities. Prologis, the biggest developer in Hungary, has its only pan-regional scheme in Hegyeshalom, right at the border of Austria and Slovakia.
Due to Audi’s presence since 1994, a wide range of automotive suppliers have moved to the submarket. Most of these occupiers went for BTS or BTO schemes - including Rehau, DANA, Nemak, Katek and WKW Erbslöh.
Logistics 15%
Warehousing 19%
Production (Automotive) 34%
Production (Non-auto) 19%
VACANT 2%Electronics 2%
Various 9%120,000
100,000
80,000
60,000
40,000
20,000
0
500,000
400,000
300,000
200,000
100,000
02005 2006 2007 2008 2009 20t10 2011 2012 2013 2014
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
(sq m) (sq m)
Completion volume Stock size (right)
Automotive occupiers historically had a dominant share in take-up; however, logistics and non-auto related production lately contributed significantly to the demand in the area.
2726
Geographically, the largest industrial centre is Tatabánya, right on the motorway M1, 60 km west from Budapest. By now, the region hosts a wide range of manufacturing occupiers, mostly from the automotive sector.
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
REAL ESTATE INDICATORS
Total stock (sq m) 925,000
Available stock (sq m) 105,400
Immediate pipeline (sq m) 0
Vacancy rate 13%
Share of leased area 6%
LARGEST OCCUPIERS (sq m)
Bridgestone 160,000 Owner occupied
AGC 63,300 Owner occupied
Foxconn 50,000 Owner occupied
Otto Fuchs 40,000 Owner occupied
Sanmina SCI 40,000 Owner occupied
Nokia* 39,000 Owner occupied
Grundfos 35,000 Owner occupied
*Nokia has recently announced to close its factory in Komárom by the end of 2014
M1 EAST IS THE LARGEST INDUSTRIAL HUB AFTER BUDAPEST AGGLOMERATION
M1 EAST
M1 East is the largest industrial hub after Budapest ag-glomeration with a stock size of almost 1 million sq m, located in six cities. This region is also considered as an industrial hotspot as 10% of total industrial production in 2013 was realised in the NUTS3 county of Tatabánya (second highest share after the county of Gyor – M1 West hub). Industrial production dates back to a shorter period than in Gyor. Tatabánya, the largest city in the county was established only in 1950’s as a heavy-in-dustrial centre, similarily to Oroszlány and Dorog, two smaller centres in the region. In the 1990’s, following major structural changes in the economy, foreign com-panies started to invest in the region and established their first modern manufacturing schemes. The city of Tatabánya is the third most important in-
dustrial centre in Hungary, following Gyor and Székesfehérvár. It hosts a diverse mix of pro-duction companies such as AGC Glass, Bridgestone, Grundfos, Otto Fuchs, Sanmina SCI, etc. In terms of stock size, Komárom is the second largest location in the submarket. Industrial production was long boosted by the Nokia factory which attracted large electronic suppli-ers to the town. The company’s difficulties in recent years led to the closure of several suppliers and finally Nokia itself decided to terminate its production and close the remaining schemes by end of 2014. Esztergom is the home of the Suzuki plant (which is not included in our stock) hosting a number of suppliers. Oroszlány can be viewed as a small automotive cluster where 75% of the stock is occupied by three automotive suppliers.
GEOGRAPHY
Esztergom
Dorog
Tata
Komárom
Oroszlány
Tatabánya Budapest
SLOVAKIA
• Total stock reaches 925,000 sq m, almost double the size of M1 West.
• Current availability is relatively high, with vacancy rate standing at 13%. Until this immediate availabilty is absorbed, we don’t expect new developments to start.
• Leased areas add up to a total of 52,000 sq m which is far below the level registered in the neighbouring M1 West hub.
• Most of the schemes are built-to-own (BTO), similarily to other parts of the pan-regional market.
REAL ESTATE MARKET – KEY DETAILS
0 20km
2928
Looking at the sectoral split of occupiers, automotive suppliers have an outstandingly high share of 43%. The largest players of this sector are AGC Glass, Bridgestone, Koloman Handler, Otto Fuchs and Wescast.
The non-auto production sector accounts for 28% with various occupiers such as Grundfos, GE, Henkel or Mivisa. Pharmaceutical companies - BD Medical, Coloplast and Mylan - which are also included in the latter group - have a relatively large footprint in this region. Electronics have a decreasing share as several large players left the market or reduced their production. Most of the vacant schemes were previously occupied by electronic producers. The logistics and warehousing
sectors represent a negligible share as many of these cities do not have direct motorway connections.
Almost two-thirds of the vacant schemes are located in Komárom where the gradual downsizing of the Nokia factory adversely impacted on its suppliers: Savcor and Perlos have already closed. The closure of the Panasonic plant in Dorog last year has also increased vacancy.
REAL ESTATE MARKET – DESCRIPTION
47% of the exisiting stock was built before 2005, this compares to the Hungarian average of 37% and M1 West hub’s average of 28%. The pipeline for this year indicates a record high level, 85% of this volume can be related to the new Bridegstone plant on 110,000 sq m. With this expansion, the Japanese company will triple its production capacity. Apart from Bridgestone, BD Medical and AGC Glass have already expanded earlier this year with 10,000 and 8,300 sq m, respectively.
STRONG PRESENCE OF AUTOMOTIVE COMPANIES
BRIDGESTONE FACTORY RAISES SUPPLY TO RECORD HIGH LEVELS IN 2014.
Logistics 3% Warehousing 1%
Production (Automotive) 43%
Production (Non-auto) 28%
VACANT 13%
Electronics 12%150,000
120,000
90,000
60,000
30,000
0
1,000,000
800,000
600,000
400,000
200,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
(sq m) (sq m)
Completion volume Stock size (right)
3130
M3 WEST IS THE YOUNGEST INDUSTRIAL HUB
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
Gyöngyös
Hatvan
Budapest
REAL ESTATE INDICATORS
Total stock (sq m) 144,000
Available stock (sq m) 0
Immediate pipeline (sq m) 0
Vacancy rate 0%
Share of leased area 0%
LARGEST OCCUPIERS (sq m)
Mader Logistics 48,000 Owner occupied
Decathlon 24,000 Owner occupied
Procter&Gamble 22,000 Owner occupied
Horváth Rudolf 16,200 Owner occupied
Stanley Electric 12,000 Owner occupied
• Currently there are no modern vacant schemes and each of them are owner occupied buildings. Further developments, however, can be relised via the extension of industrial parks in the key cities of the submarket.
• Hatvan and Gyöngyös are off the radar of potential BTS developers as these locations do not reach the critical mass to invest in.
• Total stock size is nearly 150,000 sq m which makes M3 West the smallest industrial hub.
REAL ESTATE MARKET – KEY DETAILS
M3 WESTM3 West is the smallest industrial hub, compris-ing two mid-sized cities in Heves County, east of the Bu-dapest agglomeration. Hatvan and Gyöngyös are locat-ed 60 and 80 km away from Budapest and both within 1 hour driving distance.
Hatvan is the seat of Bosch’s auto-electronics division which is the company’s largest plant. Due to its specific nature, it is not included in our stock.
Apart from the Bosch plant, the city hosts a number of logistics schemes (Horváth Rudolf, Mader Logistics) and Decathlon’s distribution centre.
The logistics and automotive sector have a leading role in Gyöngyös as well. The city’s industrial park is the home of a few automotive suppliers (Modine, Seissenschmidt, Stanley Electric). Procter&Gamble has recently handed over its 22,000 sq m manufacturng plant in the city.
GEOGRAPHY
0 20km
3332
REAL ESTATE MARKET – DESCRIPTION
HIGHEST COMPLETION WAS REGISTERED IN 2010.
LOGISTIC SCHEMES ADD HALF OF TOTAL STOCK.
More than half of the current stock was built in the past five years which makes M3 West the youngest industrial hub. The vicinity of Budapest is a key advantage for this hub, however, the limited labour pool (the two cities have a total population of 50,000) is an obstacle for further large-scale developments. Less labour intensive sectors (such as logistics and warehousing) have larger potential.
In terms of sectoral split, the logistics and warehousing occupiers account for two thirds of the total stock due to the relatively large size of these schemes. Automotive players have smaller schemes.
Logistics 48%
Production (Automotive) 16%
Production (Non-auto) 15%
Electronics 4%
Warehousing 17%
Bosch plant
M3 motorway
City Centre
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
50,000
40,000
30,000
20,000
10,000
0
150,000
120,000
90,000
60,000
30,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(sq m) (sq m)
Completion volume Stock size (right)
source: Google MapsBosch Factory in Hatvan
3534
M3 East has the largest geographic exten-sion, covering three counties and three regional cities with a population above 100,000 each. It lies in a more remote corner of the country where international transit traffic is less intense. Apart from Miskolc, none of these cities have a long industrial tradition, however due to the substantial labour pool, several production companies settled here over the last two decades.
The largest stock can be found in Nyíregy-háza, however it comprises only a number of com-panies with large plants: Lego accounts for 160,000 sq m only, Electrolux and Michelin also occupy more than 40,000 sq m. With the exception of Lego, these companies all establised themselves in the 1990s.
Debrecen is Hungary’s second largest city with slightly more than 200,000 inhabitants. However, its industrial role is much less important as the service sector has a strong presence in the city. It has an established pharmaceutical industry with a strong R&D background. FAG and National Instruments are the largest industrial players in town. Miskolc was a heavy-industrial centre where structural changes brought a high unemployment rate for a long time after the fall of communism. Since then the situa-tion has improved: Bosch operates its second largest plant here in Hungary with electrical tool production since 2001. The modern industrial stock is still limited in town though. This year Takata will hand over its air-bag assemby plant with 56,000 sq m of space in a brand new indsutrial park at the edge of Miskolc.
M3 EAST
M3 EAST HUB HAS A STRONG PRODUCTION PROFILE
REAL ESTATE INDICATORS
Total stock (sq m) 562,300
Available stock (sq m) 70,000
Immediate pipeline (sq m)* 43,000
Vacancy rate 13%
Share of leased area 17%
LARGEST OCCUPIERS (sq m)
Lego 160,000 Owner occupied
Jabil-Circuit 58,500 Owner occupied
Takata 56,600 Owner occupied
Electrolux 48,000 Owner occupied
Michelin 40,000 Leased
• Total stock size stands at 562,000 sq m.
• Current availabilty accounts for 13%, half of it is still occupied by Lego who will move out from their old scheme by 2015. The rest of the vacant schemes are all new speculative buildings, built in the last two years in Debrecen and Miskolc.
• Some 43,000 sq m ready-to-start immediate pipeline can be found in Miskolc and Polgár. In all of the cities further lands can be zoned for industrial use in the future.
• Leased areas have a reasably high share with 17%.
REAL ESTATE MARKET – KEY DETAILS
*out of this, 38,000 sq m will be vacated by 2015
Lego Plant, Nyíregyháza
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
Nyíregyháza
Miskolc
GEOGRAPHY
Debrecen
Tiszaújváros
Polgár
0 20km
3736
REAL ESTATE MARKET – DESCRIPTION
36% of the current stock was built before 2005. The annual completion level generally stood around 10,000 sq m, however, 2014 will bring a record high new supply as both the new Lego manufacturing plant and the Takata plant will be handed over this year. In addition to this, a new tobacco factory and two speculative developments are scheduled for this year.
From the non-auto production sector, the largest occupiers are Lego, Electrolux, Jász Plasztik and FAG. Automo-tive players generally choose the Western part of the country, however, Takata and Michelin adds up a total share of 17%. From the electronics sector, Jabil Circuit and National Instruments are the key players. Due to the peripheric location within the country and the less intense international transit traffic, logistics and warehousing have a negligible share of 3-4%.
STRONG PRODUCTION PROFILE
NEW SUPPLY KICKED-OFF IN 2014.
VACANT 13%
Production (Automotive) 17%
Production (Non-auto) 49%
Various 1%Logistics 3%
Electronics 13%
Warehousing 4%
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
250,000
200,000
150,000
100,000
50,000
0
600,000
500,000
400,000
300,000
200,000
100,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Completion volume Stock size (right)
(sq m) (sq m)
3938
THE HUB HAS GONE THROUGH SIGNIFICANT DEVELOPMENT IN RECENT YEARS
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
KECSKEMÉT
REAL ESTATE INDICATORS
Total stock (sq m) 170,700
Available stock (sq m) 10,200
Immediate pipeline (sq m) 10,000
Vacancy rate 6%
Share of leased area 43%
LARGEST OCCUPIERS (in sq m)
Phoenix Mecano 40,000 Owner occupied
Bertrans 22,500 Leased
Knorr-Bremse 19,000 Owner occupied
Bosal Autóflex 16,000 Owner occupied
Kühne+Nagel 10,000 Leased
• There is only one available scheme with 10,200 sq m GLA.
• Leased areas account for 43% of the stock which is a high ratio compared to other regional cities.
• Goodman has four schemes, each are leased by Bertrans, one of them is physically vacant.
• Total modern stock stands at 170,00 sq m.
REAL ESTATE MARKET – KEY DETAILS
The so called M5 Central industrial hub is the city of Kecskemét only as no other locations have modern industrial stock at this part of the motorway. In 2008, Mercedes-Benz chose to establish its first Eastern-Euro-pean car manufacturing plant in Kecskemét which was finally opened in 2012. In terms of revenue, it is already the second largest automotive company in Hungary, outpacing the Suzuki factory in Esztergom. Kecskemét lies approximately 90 km South-East of Budapest. Industrial production had no living tradition in the city until the 1990s and it was primarily considered as an agricultural centre with food industry.
Kecskemét has gone through significant development regarding its industry due to skilled labour, good educa-tion, motorway and rail connections, the proximity to the capital city and a clear industrialisation strategy of the municipality. Mercedes-Benz opened its manufacturing plant in 2012 which gave a huge boost to the industrial production figures of the area. While Kecskemét accounted for only 3.2% of the Hungarian industry in 2009, the share increased to 6.1% by 2013. This impressive growth was unmatched by other counties in the country and was mostly due to the massive investments realised in the city of Kecskemét.
M5 CENTRALGEOGRAPHY
0 20kmBudapest
4140
REAL ESTATE MARKET – DESCRIPTION
Due to the small stock size the annual completion level shows high fluctuation. Last year, Knorr-Bremse handed over its new owner occupied scheme, whilst Phoenix Mecano expanded its production area which now reaches 40,000 sq m of modern industrial space.
Sectoral split among occupiers show an even distribution, however there are no electronics manufacturer and warehouses in the city.
OCCUPIERS’ SPLIT SHOWS EVEN DISTRIBUTION.
MORE THAN HALF OF THE CURRENT STOCK WAS BUILT BEFORE 2005.
Logistics 19%
Production (Automotive) 21%
Production (Non-auto) 31%
Various 23%
VACANT 6%30,000
25,000
20,000
15,000
10,000
5,000
0
200,000
150,000
100,000
50,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mercedes-Benz factoryM5 motorway
City Centre
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
Completion volume Stock size (right)
(sq m) (sq m)
source: Google MapsCity of Kecskemét and the Mercedes Factory
4342
Székesfehérvár is one of the TOP3 industrial hotspots outside of Budapest with a healthy mix of occupiers from each sectors.
M7 CENTRAL IS ALSO A ONE-CITY INDUSTRIAL HUB WHERE MODERN INDUSTRIAL STOCK AMOUNTS TO NEARLY 400,000 SQ M
REAL ESTATE INDICATORS
Total stock (sq m) 395,000
Available stock (sq m) 49,700
Immediate pipeline (sq m) 25,000
Vacancy rate 13%
Share of leased area 33%
LARGEST OCCUPIERS (in sq m)
Denso 70,000 Owner occupied
Emerson 55,000 Partially leased
Grundfos 40,000 Owner occupied
Lidl 35,000 Owner occupied
DHL 26,500 Leased
• Modern industrial stock amounts to nearly 400,000 sq m.
• A total of 25,000 sq m industrial space could be immediatly constructed in Videoton Industrial Park.
• Currently, 49,700 sq m is available on the market.
• Vacancy rate is only 13%.
• Leased areas account for one-third of the total stock.
REAL ESTATE MARKET – KEY DETAILS
E573
41
49
491
471
36
E79
37
E71
E71
E71
3
25
3
3
3
E77
E77
10
25
33 33
42
46
44
47
47
45
45
43
55
4
33
E573
E79
E79
E60
E60
443
470
54
52
6
53
5
53
63
61
55
58
56
66
61
75
76
84
84
84
84
85
86
86
87
83
83
86
81
13
77
51
M6M5
M6
E75
E75
611611
E73
E71
E65
E661
E661
M1
M1
M7
M6
M1
M0
M7
M85
M15
E75
E65
E65
E66
E66
M5
M3
M3
M35
M30
M3
M3
SZÉKESFEHÉRVÁR
M7 CENTRAL
Székesfehérvár is the home of Videoton, the largest Hungarian industrial group in local ownership which has been present in town for 75 years. It is a supplier of electronic and automative parts, oper-ating in eight further locations nationwide. Ikarus is also an iconic local brand which was one of the largest bus
producers in the world during the communist times. Most of the industrial schemes are located in Sóstó Industrial Park (260,000 sq m) along the M7 motorway. Videoton Industrial Park and Alba Indus-trial Zone are the two other industrial locations within the city.
GEOGRAPHY
0 20km
Budapest
4544
REAL ESTATE MARKET – DESCRIPTION
Székesfehérvár has the oldest industrial stock among the listed industrial hubs as 66% of the existing space was delivered before 2005 (the Hungarian average is 37%). Last year Grundfos handed over its new 24,000 sq m production plant in Sóstó Industrial Park, whilst G.E.B.E. Transport also built a 5,000 sq m scheme. In 2012, a speculative development was handed over with 6,000 sq m GLA in Alba Industrial Zone, right next to the motorway exit.
Sectoral split of occupiers show an even distribution. Major non-automotive producers are Emerson, Grund-fos and Jüllich Glass. Emerson has just recently taken over the former Philips manufacturing plant. Jüllich Glass is a locally owned glass producer present in town from the early 1990s and supplies several automotive companies.
Automotive suppliers are Denso and Harman Becker, both present in town from the mid 1990s. Denso oper-ates in 70,000 sq m and produces diesel injection pumps. Harman Becker occupies 23,000 sq m and produces audio and infotainment systems for premium car brands. Electronics suppliers are Emerson and Videoton, however, the latter is not included in our stock.
Several logistics companies are active in the city such as Alba Zöhling, DHL, Preymesser, Trans-sped and Versteijnen Logistics. Lidl has a 35,000 sq m distribution centre in the Alba Industrial Zone.
DIVERSE OCCUPIER MIX
NEW SUPPLY WAS DELIVERED UNEVENLY.
Electronics 4%
Warehousing 9%
Logistics 21%
Production (Automotive) 24%
VACANT 13%Production (Non-auto) 29%
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart: Split of OccupiersChart: Annual New Supply and Total Stock Size
Completion volume Stock size (right)
(sq m) (sq m)
4746
DEFINITIONS DEFINING INDUSTRIAL STOCK (CRITERIA)
INCLUDED EXCLUDED
Concrete or steel building structure built after 1995.
Highly specialised buildings with heavy industrial profile: chemical plants, iron foundries, etc.
Part of an established industrial location (industrial park)
Large car manufacturing plants (Audi, Mercedes, Suzuki, Opel)
Easy accessibility from motorway (driving time less than 30 min)
Stand-alone buildings in non established locations
GLA reaches at least 5,000 sq m Buildings located far from the motorway
High level of flexibility – possibility to host various occupiers without large restructuring
Older warehouses with low technical specifications
Specifically designed scheme
Dedicated for one tenant
Typical building size: >15,000 sq m
Usually production function
Out of town location
Typical building size: 15,000 sq m
Typical unit size: >2,000 sq m
Typical internal height: 9-10 m
Mainly docking gates
Typically logistics function
More central location
Typical building size: 5,000 sq m
Typical unit size: 600-800 sq m
Internal height: 8 m
Mainly driving gates
Typically warehousing function
BUDAPEST CITY LOGISTICS
BUDAPEST AGGLOMERATION BIG-BOX
BUILT-TO-SUIT (BTS)
4948
LEASE TERM• 3 years in existing buildings• 7-10 years for built-to-suit (BTS) projects
HEADLINE RENT• Paid monthly in advance; quoted in EUR, paid in HUF• Annual indexation linked to CPI indices (usually HICP Index)
EFFECTIVE RENT• Average rent accounted over entire lease period, including financial incentives provided to tenant by landlord (e.g. rent free periods, fit-out contribution)
SERVICE CHARGES• Paid monthly in advance; generally quoted in EUR, paid in HUF• Based on ‘open book principle’, reconciled annually
SCOPE OF SERVICES INCLUDED IN SERVICE CHARGES• Security of park - common areas• Property taxes• Property insurance (excl. tenant internal area)• Property management• Maintenance and repairs• Landscaping / site cleaning• Snow removal• On-site personnel
LEASE SECURITY• Bank guarantee (common) or deposit (rare), equal to 3 - 6 months’ rent + service charges + VAT• Parent company guarantee (especially in the case of new companies)
INSURANCE• Liability insurance, insurance for own installations and owned equipment - covered by tenant• Building insurance and landlord liability insurance included in service charges - covered by tenant
REPAIRS• Internal - covered by tenant• Structural and common areas - covered by tenant (part of the service charge)
TENANT INCENTIVES• Rent-free periods• Partial fit-out according to tenant’s specification and the required adaptation works
AGENT FEE – LEASE TRANSACTION• 12 - 25% of the annual rent plus VAT, subject to lease length• Fees are generally paid by the landlords
SALE AND PURCHASE OF REAL ESTATE• VAT: 27% of the property purchase price or civil tax (pcc): 2% of property purchase price or 1% of share purchase (share deal, ruling from the tax authorities is recommended)• Notary, legal and mortgage book fees - 4-5% of the purchase price• Agency fee : 2-5% of the purchase price
MARKET PRACTICE
Option 02 04 06 08 10 12 14 16
Leasing process - available vacant space
Pre-leasing agreement for the space to be constructed in existing park
Build-to-suit agreement
Own greenfield investment with master plan
Own greenfield investment without master plan
*In case of a standard warehouse building.
Occupancy options and timelines (months)*
Typical headline rental ranges by various categories (EUR/sq m/month)
Big-box type schemes in the Budapest agglomeration area are typically quoted in the headline range of EUR 2.75-4.00. The upper side of this range can be achived only in the vicinity of the airport, whilst the rest of the schemes are generally quoted of approximately EUR 3.0. The high vacancy rate gives a constants pressure on prices.
Rental levels of city logistics schemes in Budapest are considerably higher (EUR 3.50-5.00) due to their smaller size. The vacancy rate has significantly decreased in these schemes over the past four years as occupiers showed higher interest towards these premises. The relatively wide rental range is due to the large quality differences.
In the countryside, rents are generally a bit higher as supply from leasable schemes is limited. In case of BTS developments we can see an even higher rental level despite the longer lease lenghts. Developers are not willing to start constructions without a rental premium.
Budapest Agglomeration - Big Box
Regional cities - leased
Budapest - City Logistics
Regional cities - BTS
0 1 2 3 4 5 6
Source: CBRE Research
5150
NOTES CONTACTS
Hungary Research and Consulting Gábor Borbély Associate Director t: +36 305 475 870 e: [email protected]
Hungary Industrial AgencyGergely Baka Associate Director t: +36 305 187 099 e: [email protected]
Hungary and SEE Capital Markets Tim O’Sullivan Director t: +36 305 341 744e: [email protected]
HungaryLoránt Kibédi Varga Managing Directore: [email protected]
CEE Research and ConsultingJos TrompSenior Directort: +49 (0)89 24206018e: [email protected]
CEE Industrial AgencyJoerg KreindlSenior Directort: +48 22 544 8006e: [email protected]
CEE Capital MarketsMicheal AtwellSenior Directort: +48 500 100 018e: [email protected]
For more information regarding this report please contact:
GLOBAL RESEARCH AND CONSULTINGCBRE Global Research and Consulting is an integrated community of preeminent researchers and consultants who provide real estate market research, econometric forecasting, and corporate and public sector strategies to inves-tors and occupiers around the globe.
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Disclaimer
Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy
and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved
and cannot be reproduced without prior written permission of the CBRE Global Chief Economist. Edition was closed in October 2014.
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