Warehousing is not enough without other services

Domestic logistic capacity has expanded continuously in recent years, while profits shrunk somewhat. The market is optimistic. Experts expect to see significant development generated by EU subsidies in 2007-2013. Logistics is one of the seven development priorities, according to Miklós Merényi secretary of state from the Ministry of Economy and Transport. There will be HUF 65-70 billion of EU financing available to support the development of logistic centres and industrial parks between 200 and 2013. With sound development policies, the Hungarian market of logistic services can grow from HUF 400 billion annually to double this figure within the next seven years. According to Attila Chikán, former Minister of Economy, the government and the EU should each contribute a third or a quarter of the financing for development, while the largest part should be borne by the private sector. New logistic centres will be required to provide a wider range of services than previously. At the moment, only 3 –4 out of 13 major logistic centres can provide such a complex service. According to data from DTZ , 163,000 square meters of modern warehouse facilities were constructed in 2006, bringing the total to over 930,000 square meters. The proportion of facilities under lease grew last year, but the average area leased under a contract is still quite low at 2,500 square meters. Last year, rents continued to fall in areas with an abundant supply of warehouse space and the conditions of lease are also becoming more flexible.