Colliers HU: How can industrial developers continue to speculate?

Colliers’ Budapest office has put out its most recent report on Hungary’s industrial market. Right in the headline, it gets your attention: Decreasing developer activity, discounted rental rates, less transactions…How can developers continue to speculate?

In early 2008 Colliers International forecasted the construction of 390.000 sqm of speculative industrial warehouse space, of which 64% (250.000 sqm) was realized during 2008 and a further 33% (130.000 sqm) was under construction during H1 of 2009. Compared to the original forecast, 92% of the space was realized, raising the speculative stock up to 1.051.000 sqm in Budapest. One quarter of this (263.000 sqm) was vacant on the last day of H1.
Colliers reports that most big tenants are putting off making decisions on new leases, and then admits that large volume spec development has all but ceased. Vacancy has risen from 17% at the end of 2008  because big boxes delivered around the beginning of the year of last year have remained empty. That despite rents being offered at €3.50 and lower. Here’s a link to Colliers News though there doesn’t seem to be a link yet to this report.
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