How do you perceive the current state of the industrial and logistics real estate market in Hungary and the Central European region?
Last year, WING Industrial leased more than 110,000 square meters of space. 60% of this volume came from successful tenant retention and lease renewals, while the remainder consisted of new lease agreements – an achievement I consider significant in the current market environment. I continue to view industrial and logistics properties as one of the most stable segments both domestically and regionally. Although recent macroeconomic uncertainties (inflation, interest rate environment, geopolitical impacts) have palpably slowed down decision-making processes – with negotiation cycles for larger-volume lease transactions reaching up to 12 months – the underlying market fundamentals remain strong. The region's competitiveness continues to be supported by its favorable geographical location, relatively competitive labor costs, and structural demand related to manufacturing and distribution. Domestically, we observe that tenant activity has become more selective; however, interest remains stable for high-quality, well-located logistics centers offering unique or built-to-suit (BTS) solutions. From a strategic perspective, the demand side is increasingly defined by the hi-tech sector and industries requiring energy-intensive manufacturing and logistics capacities, such as the automotive, electronics, and pharmaceutical industries. While we do not anticipate the kind of explosive growth seen post-pandemic, market stability is expected to endure. Looking at Northern and Southern European trends, it is evident that data centers, green energy projects, and the integration of solar farms into industrial parks are representing an ever-growing share within the sector. I consider destabilizing geopolitical conflicts to be the most significant risk factor. At the same time, such turbulent periods also offer opportunities that can further strengthen our market position. Escalating conflicts may restart stockpiling processes and lead to the maintenance of multiple locations. Overall, the industrial and logistics sector can remain a long-term winner of any new global era. In practice, this means providing answers to uncertainty. Assets and platforms capable of providing resilience and flexibility gain value in times of crisis. These are the solutions we strive to offer our partners.
What impact has the explosive growth of e-commerce had on industrial and logistics real estate developments?
E-commerce has generated structural changes in the sector, significantly increasing the value of so-called "last-mile" logistics facilities located in the metropolitan areas of large cities. In parallel, expectations regarding technical specifications have reached a higher level: flexible spatial configurations, higher degrees of automation, and modern IT infrastructure have come to the fore. Although household consumption – and consequently e-commerce activity – temporarily moderated recently due to inflation and real wage trends, improving macroeconomic indicators could lead to a recovery in the short term. Domestic e-commerce players (primarily the SME sector) currently operate with significant import dependency and lower efficiency compared to multinational corporations. In the medium to long term, I do not expect a drastic shift due to the limited size of the domestic market; the question is rather how well these players can integrate into global value chains and increase their productivity. As developers and landlords, we also see the complexity of the regulatory environment, which has an absolute impact on construction costs and feasibility. WING Industrial’s goal remains to strengthen its market position in its own segment.
The industrial and logistics sector can remain a long-term winner of any new global era.
WING has developed several successful industrial parks (e.g., East Gate, Airport City). What new developments or expansions are planned for the near future?
Our focus is currently on tapping into the potential inherent in our existing portfolio, expanding our industrial parks, and preparing new projects that are durable in terms of location, infrastructure, and sustainability over the long term. The timing of our developments is strictly aligned with current market dynamics and tenant needs. Despite the challenges of the past year, our projected development volume for 2025 and our occupancy data prove that the industrial/logistics segment remains one of the most resilient branches of the real estate market. We have successfully maintained our position and increased the occupancy rate of our properties during this period.
What role does sustainability (energy efficiency, renewable energy, green certifications) play in the development and operation of industrial properties?
Sustainability has evolved beyond mere corporate rhetoric; it has become an exact, measurable performance indicator and a fundamental market requirement. Energy efficiency, the integration of renewable energy sources, and obtaining international green certifications (e.g., BREEAM) are no longer just environmental commitments but represent a hard economic interest. In this field, we now face clear expectations from financiers, tenants, and transaction partners alike. Tenants are becoming increasingly conscious: they seek forward-looking solutions that appear not only in ESG reports but also as tangible operational cost savings in their invoices. From a developer's perspective, this approach simultaneously represents a competitive advantage and a significant risk reduction for future leasing and transactions.
How common is the "built-to-suit" (tailored to tenant needs) development model in the industrial market today, and how does it differ from speculative development? News reports suggest that "tenants are calling the shots". Is this true?
According to the logic of real estate cycles, rising vacancy rates urge developers to be cautious; at the same time, it increases the value of "built-to-suit" projects over speculative developments – a trend we have experienced multiple times over the last 20 years. In this volatile environment, both sides have become more prudent, which pushes the market toward tailored solutions. While the negotiating position of tenants has indeed strengthened, the high-quality supply and professional partnership represented by WING Industrial continue to command high market value. In long-term planning, a reliable, well-capitalized developer with a solid track record means security and predictability for the tenant – which is of key importance, especially for partners with specialized needs.
How is WING Industrial responding to new challenges – such as changes in the interest rate environment, construction material prices, and financing conditions – during industrial real estate developments?
WING Industrial’s operations are characterized by a prudent and flexible development approach. We pay close attention to strict cost control, ensuring that developments are leased to the highest possible extent even before handover – which is also a decisive factor during project financing – as well as establishing diversified financing structures. In the case of a lease agreement with sufficient volume, we are positioned to convert even a project that started as speculative into a built-to-suit model. Additionally, we place strategic emphasis on long-term partnerships: whether with contractors, banks, or tenants, mutual trust has proven over the economic cycles of the past 15 years that it makes the business resilient to crises.
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