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INDUSTRIAL MARKET

INDUSTRIAL MARKET MID-YEAR MARKET REPORT - 2009


Existing stock (sqm)  At the beginning of 2008 Colliers forecasted the completion of 390,000 sqm of new
1 800 000
speculative industrial warehouse space, of which 250,000 sqm was realized and 130,000
sqm was under construction at the end of the year. 110,000 sqm was handed over in H1
1 600 000
of 2009, raising Budapest speculative property stock to 1,051,000 sqm, with 263,000 sqm
1 400 000 (25%) vacant as of June 30th. In H1 of 2009 no significant new transaction was signed on
496 000
1 200 000 the built-to-suit market, although some buildings that were pre-leased last year were
436 000
completed, raising built-to-suit property stock to 469,000 sqm, including two (former
1 000 000
396 000
Rynart) vacant buildings totalling 73,200 sqm (15,6%).
800 000
396 000
600 000 381 000  The industrial vacancy rate as of June 30th was 22.1% (336,200 sqm), which shows
1 051 000 significant growth compared to end of 2008 figures (234,000 sqm / 17,0%), and is due to
940 000
400 000
536 000
684 000 the buildings handed over at the beginning of the year. Similar to the tendency of the past
200 000 415 000 couple of years, units without tenants are scattered throughout Budapest and its
0 surroundings, comprising of mainly smaller to middle sized units. In terms of unit size,
2005 2006 2007 2008 2009 H1 spaces available for lease exceeding 10,000 sqm were only available in seven locations,
although these buildings contribute extensively to the number of vacancies (52.4%).
Speculative BTS
 During H1 of 2009, approximately 25,000-30,000 sqm of property became vacant as a
Speculative & BTS take up (sqm) Vacancy (%) result of tenant departure, which roughly equals the amount of new take-up (26,400
sqm). This tenant activity is a mere fraction of last year’s record breaking H1 take-up
350 000 25,0%
22,1% (190,000 sqm) and of the entire last year’s take-up (350,000 sqm). The majority of lease
300 000 transactions (nine transactions) were concluded in city logistics warehouses and ’small
17,0% 20,0% unit’ buildings (8.800 sqm), and only six smaller transactions were recorded in ’big box’
250 000 buildings (17.500 sqm), of which two were expansions.
12,1% 9,1% 15,0%
200 000
9,5%  In spite of high market activity, the number of actual transactions is low. Most potential
333 000 tenants would rather wait or postpone their decision to relocate, or in some cases they
150 000
10,0%
renegotiate the terms and extend their present contract.
100 000
167 000 183 000 5,0%
50 000
92 000
26 000
0 0,0%
2005 2006 2007 2008 2009 H1

Take up Vacancy
INDUSTRIAL MARKET
INDUSTRIAL MARKET MID-YEAR MARKET REPORT - 2009
 Regarding rental rates, quite a few developers were offering reduced prices – €
Major Leasing Transactions in 2009 H1
3.5 / sqm / month or even lower net prices – for recently completed vacant
Highway locations ("big box") buildings or recently emptied big box warehouse space left by tenants. Meanwhile,
Tenant Location Landlord Size (sqm) net asking rents for standard property stock were characteristically between € 3.8-
Archirex M5 - Gyál Business Park Autóker 2 514 4.5 / sqm / month. There seems to be significant difference between discounted
lease rates and standard prices. Also, the appearance of a new pricing category is
Docutár M5 - Gyál Business Park Autóker 1 660 EXP
expected for warehouses built based on pre-leases. The pricing levels and
NA Europolis Park Budapest Airport Europolis 1 775 calculation basis of these rents will be vastly different from those seen in previous
years.
Rudolph Logistics WestLog Industrial Securities Europe 4 700

Schneider Electric ProLogis Park Budapest Sziget ProLogis 4 714 EXP  Speculative developer activity – especially in larger volume – is practically non-
Veco Immo Euro-BusinessPark Immoeast 2 180 existent. The handover of another 50,000 sqm of mainly “small unit” type buildings
PRE=pre-lease EXP=expansion BTS=built-to-suit at city locations is expected, but not at project sites, in the form of individual
City Logistics ("small units") buildings. Currently, only a handful of smaller buildings are expected to be handed
over in H1 of 2010.
Tenant Location Landlord Size (sqm)

Elektromont DAN Üzleti Park W-GO 2000 740  Activity in the sale transaction market is quite low, with only the occasional small
land and building transactions by end users taking place. We have no knowledge of
Logicom Citypoint9 ConvergenCE 500
high volume developments or developer transactions in the countryside.
Magyar Posta inNove Business Park Altan Beton 1 260
Expansion (sqm)
NA Dél-Pesti Üzleti Park 1 Wing 440
80 000 45,0%
41,9%

Expansion (%) / Yearly Take up


NA Dél-Pesti Üzleti Park 2 Wing 1 300 PRE 40,0%
70 000
NA Europolis Park Budapest Airport Europolis 1 123 35,0%
60 000
Seoul Metal Europe Dunakeszi South Industrial Area ATRO 900 26,4% 19,9% 13,3% 24,5% 30,0%
50 000
Pet Pack Europa Center Terra Invest 2 000 16,8% 25,0%
40 000
20,0%
Wicke Europa Center Terra Invest 550
30 000
69 600
PRE=pre-lease EXP=expansion BTS=built-to-suit 15,0%
20 000 48 100 10,0%
44 200
34 200
10 000 15 500 5,0%
6 374
0 0,0%
2004 2005 2006 2007 2008 2009 H1

Expansion Expansion (%) / Yearly Take up