Is the era of speculative developments coming to an end? – Interview with Milla Kalmár, Head of Industrial Real Estate at 108 Hungary Real Estate
The industrial and logistics real estate market has experienced a dramatic rollercoaster over the past few years: the overheated demand of the Covid period was followed by economic uncertainty, international competition, and a much more cautious corporate decision-making environment. Today, both domestic developers and tenants plan far more carefully, while technological requirements and the demand for automation have gained significant importance.
In this complex environment works Milla Kalmár, Head of Industrial Agency at 108 Hungary Real Estate Ltd., who sees market movements on a daily basis, along with developers’ cautious approach and tenants’ increasingly firm and technically sophisticated expectations. We spoke with her about the current state of the industry, the lessons of 2025, the dynamics of regional markets, and the development potential around the M0 ring road.
A few years ago, the industrial real estate market was booming, warehouses were being built one after another, and many new developers appeared in regional locations as well. Now, at the end of 2025, what does the market look like?
Compared to three years ago, market activity has clearly consolidated on both the demand and supply sides. Speculative developments have declined: investors make far more considered decisions and rarely launch projects without a committed tenant in place. Instead, they prepare projects—conducting geotechnical studies, foundation works, and permitting—but then wait until a specific tenant demand materializes. This is understandable, as a large part of the current vacancy rate on the Budapest market comes from unleased speculative developments and older, less modern buildings.
In recent years, e-commerce and automotive-related logistics and supplier activities have been the main drivers of the market. However, e-commerce players are currently facing challenges: month after month, there is news about Chinese competitors—primarily Shein and Temu—undermining their growth plans, which naturally impacts the warehouse market as well. Forecasts made during Covid have not necessarily materialized as many had expected at the time. Shein and Temu currently mainly boost air cargo traffic, as they do not serve customers from Hungarian distribution centers. At the same time, domestic webshops feel the negative effects of their expansion the most.
That said, there are counterexamples: Hungarian online retailers selling household appliances—refrigerators, ovens, TVs, microwaves—continue to perform well, as customers in this product category strongly value warranties and high-quality service.
A modern warehouse today is no longer just “a big box next to the highway.” How specific are tenant requirements, and how complex is an industrial building from a technical perspective?
This depends entirely on the client. That is precisely why it is positive that speculative developments have moved into the background—custom requirements are difficult to serve with standard buildings. Just think of the background infrastructure of a more complex, robotic warehouse or a manufacturing operation: special floor flatness requirements, higher load-bearing capacity, different column grids. In many cases, standard buildings can only be adapted to specific needs through costly modifications.
Tenants are looking for warehouses that are suitable for a certain level of automation. Even in existing operations, they are increasingly open to making processes more efficient and reducing reliance on manual labor, whether in packaging or inbound and outbound logistics. They are open to new technologies, but ultimately, the investment must align with return expectations.
The area around the M0 ring road remains the center of domestic logistics. Is the ring road area really “filling up”?
Within the Central and Eastern European region, we are strong players, and through cross-country collaboration we see that, compared to Prague, the area around Budapest’s M0 is far from being fully built out. Around the Czech capital, available land has practically disappeared—not only directly nearby but even within a 40–50 km radius—largely because authorities subject developers to much more complex permitting processes.
In Hungary, development opportunities still exist, and in some respects, this gives us a competitive advantage. In Poland, rental levels are very low, but labor costs are high. In Prague, both rents and human resource costs are high. Around Bratislava, rental levels are particularly competitive. Hungary sits somewhere in the middle: there is competitive warehouse stock, and wages are not excessively high in a regional comparison.
Outside Budapest, do automotive requirements dominate? Do areas around Debrecen, Kecskemét, or Szeged represent a different market?
In larger regional cities, the automotive industry remains the dominant driving force, and this is expected to continue in the coming years. At the same time, we have also had clients from the FMCG sector. According to industry news, another Asian-backed automotive plant may arrive next year, while already today the available electricity capacity essential for such large-scale investments is quite limited. The year 2026 will certainly be exciting as well.
How can a tenant be convinced to sign a 3–5 year lease despite uncertainty? What do you tell clients?
The role of uncertainty has indeed increased, but there is also a positive side: companies’ tolerance thresholds have shifted significantly. We have lived through war, an energy crisis, inflation shocks, and tariff issues—and companies have, to some extent, adapted to this environment.
Our advice is to focus on the factors we can actually influence and strive to achieve the best possible parameters there. Where we have no influence, a risk assessment matrix is needed: we should try to evaluate how potential events might impact a specific company or sector. With this approach, it is possible to plan even five to ten years ahead.
It is slowly time to take stock of this year. What was 2025 like?
Exciting and challenging. Decision-making processes are becoming increasingly complex, with many uncertainty factors. This includes developments related to U.S. tariffs or, for example, speculation surrounding next year’s domestic elections. Not only Hungarian small and medium-sized enterprises but also large multinational companies are trying to determine what the coming years may bring.
Despite all this, we closed a good year and met our business targets. We completed many regional transactions and also concluded significant deals around Budapest. There are no easy deals—everything requires hard work.
