Industrial Destinations Hungary 2014 - Executive Summary
Industrial Destinations Hungary - Executive Summary
Where are the major industrial hubs outside of Budapest?
What core industries characterise 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?
MARKET PRACTICE AND BUILDING DESCRIPTION
Hungary is one of the major industrial 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 investments in the manufacturing and logistics sector for the past 20 years. Despite the undoubted leading economic role of the capital city, some highly industrialised areas have lately emerged on the pan-Hungarian industrial scene as key regional submarkets. Budapest’s share in national industrial output is only 15% which is comparable to what, some of the major regional hotspots have. Nevertheless, the industrial property market has different characteristics in panregional locations compared to the capital city.
New investments since 2011 put more light on the pan-regional industrial 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 different geographies.
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.
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.
HUNGARIAN INDUSTRIAL SUBMARKETS
Pre-crisis development boom was boosted by speculative projects. Post-crisis years are driven by owner occupied and bts developments.
Budapest agglomeration accounts for 40% of the total Hungarian stock.
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 Budapest. This period was followed by a sharp decline, bottoming in 2011 with less than 100,000 sq m of new supply.