The View 9

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One existing asset was included in the modern stock based on qualitative criteria and its for-lease operative model; the newly added Növény utca Warehouse Base enlarged the stock by another 6,300 sq m. As a result, the size of the modern industrial stock across Greater Budapest amounted to 2,247,000 sq m as of Q4 2019. Looking ahead, the industrial development pipeline for 2020 still points to a long-awaited upswing in new supply. Currently, there is ca. 189,700 sq m said to be under construction in Greater Budapest, all of which is scheduled for handover in 2020. This is slightly greater than the forecast from six months ago and would entail by far the highest annual new supply on record during this cycle, up by 50% from the previous – and relatively modest – peak in 2018. However, based on recent years’ experiences regarding timely project delivery, there is a good chance that some of the volume scheduled for this year will drag out into 2021, as developers’ communication around timelines tends to be overly optimistic. Meanwhile, demand for industrial space held up strong in Q3 but fell back to meagre levels in Q4, when net take-up produced its weakest quarterly reading since 2012. As a consequence, the second half of the year saw overall net take-up of 80,000 sq m (-28% y/y), which was the weakest H2 reading in four years. The vast majority of take-up during the period came from pre-leases, with nine such deals – of which only one in Q4 – amounting to 57,000 sq m. Seven of the ten largest take-up transactions in H2 were pre-leases, the largest ones including a 10,600 sq m commitment by a logistics provider in Inpark Páty and the 9,000 sq m deal by Tolnagro in Dél-Pesti Üzleti Park.