Market Trends of Hungary Third Party Logistics (3PL) Industry
Growth in the Demand for Warehousing Sector
The warehousing sector is thriving to accommodate production requirements in the country. Manufacturers are increasingly demanding innovative solutions in warehousing and inventory management.
According to an industry organization, industrial demand for 2021 will be over 630,000 sqm, up 15% from the previous year and with a vacancy rate of about 4%. Moreover, 2021 set a record with 320,000 sqm of net absorption. The Greater Budapest market received 13 new industrial buildings last year. The consulting firm identified 340,000 square meters of space in Greater Budapest that will be delivered in 2022, with an additional 88,000 square meters planned for 2023.
Among recent developments, TEVA Pharmaceutical Industries Ltd. has established a fully automated and dynamic warehouse in Debrecen. The Polish electric power supplying company PEPCO began an investment for setting up a 100,000 square meter distribution center with a greenfield investment in Gyál, serving more than 600 stores across Europe. The facility will be equipped with technologies. SEG Automotive has set up a logistics center in Miskolc equipped, among others, with state-of-the-art innovations, including indoor GPS tracking, the region's largest coherent logistics center. The total capacity of the warehouse is 18,035 pallets.
Growth in the Chemical Sector in Hungary
The chemical industry is the second-largest contributor to Hungary's economy after automobile production, accounting for more than 14% of the gross domestic product (GDP) yearly since 2012. Many companies have started investing in expanding their production and storage capacities to meet the increasing demand of the construction sector for building materials, construction chemicals, and insulation materials. The rubber and tire industry is also an important branch of the Hungarian chemical industry. The plastics and plastics processing industry is experiencing a major pick-up largely due to growing automotive and construction industry demand. These products require the logistics industry to provide specialized transportation services, including temperature-controlled logistics and containerized and bulky transportation.
