The amount of completed industrial developments in Budapest rose during the first half of 2009 by 123,000 m[sup]2[/sup] to 1.54 million m2, according to adviser DTZ.
The amount of completed industrial developments in Budapest rose during the first half of 2009 by 123,000 m2 to 1.54 million m2, according to adviser DTZ.
The figure exceeded full-year figures for previous years, DTZ said, but added that most of the delivered schemes were already in the construction phase when the crisis emerged last October. However, a majority of the planned schemes were put on hold, which will result in minimal completion levels in the second half of 2009.
The southern part of Budapest and surrounding areas continued to raise its market share, with 68% of the newly completed developments located in this area. The two largest developments are Viktória Industrial Park and M5 Gyál Business Park comprising 45,000 m2 and 35,000 m2 lettable space respectively.
Weak demand has increased the vacancy level to 22.8%, the highest level in the past five years. Only 14% of the new developments completed during the first half year has been leased, The share of fully occupied developments fell from 30% to 16%.
Headline rental levels decreased between 10-20% and range from EUR 3.5 to EUR 5.0 per m2 per month. DTZ also pointed out that in addition to falling rental levels, increased incentives such as rent-free periods and better fit-out contributions, are signs of the increased competition.
DTZ expects the vacancy level to remain above 20% in the next 12 montshs if no larger deals happen. Developers are concentrating on their current schemes, striving to reach the largest occupancy rate possible and to secure new tenants with different incentives.
