Market Trends of Hungary Facility Management Industry
Hard FM is Expected to Hold Significant Market Share
- Hard facility management services encompass the maintenance and management of a building's physical assets, including its HVAC, electrical, and plumbing systems, as well as its overall structure. These services are crucial for ensuring the smooth operation of the facility and the safety and comfort of its occupants.
- According to the Hungarian Central Statistical Office, in 2022, in Hungary, the export of business services accounted for the largest share of the country's total export value of services, amounting to approximately EUR 13 billion (USD 14.15 billion). The country's growing focus on sustainability has resulted in a rising trend toward green and energy-efficient buildings. As a result, building owners are increasingly seeking out energy-efficient solutions, leading to heightened demand for related hard facility management services, such as energy management.
- In September 2022, Budapest's city leadership introduced measures to reduce energy consumption and costs for operating public services while increasing the security of the city's energy supply. This included the implementation of the First Energy Package framework, which mandates that buildings belonging to the municipality cannot be cooled below 25°C or heated above 21°C during the winter. Such initiatives are expected to drive the adoption of energy-efficient solutions in commercial and industrial settings, further fueling the demand for hard FM services.
- The public and private sectors in Hungary are also investing heavily in the conversion of existing buildings into smart buildings, incorporating advanced access controls, sophisticated security management systems, and renewable energy sources, among other innovations. For example, the country's Modern Cities Program allocated funds worth USD 343 million to develop energy systems and public utilities in eight cities.
- The maintenance and management of smart buildings, with their advanced building systems, will require regular attention, creating a significant demand for hard facility management services in areas such as HVAC, lighting, security, access control, and energy management systems. With the continued growth of smart buildings, the demand for these services is expected to increase in the coming days.
Understand The Key Trends Shaping This Market
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Industrial Segment to Witness Significant Growth
- The industrial sector encompasses a wide range of applications, including manufacturing in sectors such as food & beverage, electronics, and automotive, as well as mining and oil and gas. As a result of government projects, reduced taxes, and business-friendly legislation encouraging automation and the progress of the manufacturing sector, the demand for facility management services in the industrial sector has increased significantly.
- According to Cushman & Wakefield's annual Manufacturing Risk Index (MRI) assessment in 2022, Hungary dominated the world rankings based on parameters such as operational costs, labor, and economic and political risks. With a ranking of 11th out of 45 nations with the greatest industrial environment in the world, Hungary is well-positioned to benefit further.
- It has a more extensive transportation infrastructure than its key Central and Eastern European competitors and one of the lowest labor costs in the region. Additionally, Hungary has a comparative advantage over Poland in terms of quality and trained labor, over the Czech Republic in terms of rental prices, and over Slovakia in terms of pricing advantages in local currency. As a result, Hungary provides various options for renters, landlords/developers, and agencies.
- Currently, more than 600,000 square meters of logistical space are under development in Hungary, with the majority of it situated in the Greater Budapest region. The eastern and southern submarkets are seeing the most development, while development activity in regional markets is more modest, with approximately 136,000 sq m currently under development, 44% of which has been placed on pre-lease.
- Miskolc, Kecskemét, and Tatabánya are the focus of development. HelloParks is the most active developer concentrating on the Greater Budapest area, followed by CTP and VGP. The most prominent developers in the regional marketplaces are InfoGroup and Cordys Capital, while the newest companies in the logistics development business include Biggeorge, Faedra Group, and White Star.
- As a result of major developments, including growing investment in the manufacturing sector and the rising number of manufacturing facilities, contracts for facility management services in the sector are expected to increase significantly.
