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Booming in Budapest: The Rise of Self-Storage in Hungary’s Capital City
The Budapest self-storage sector is young but nascent, with a lack of facilities and high occupancy driving increased demand. This article explores market conditions in Hungary’s capital and how the city may one day become a notable industry player in Eastern Europe.
3 Min Read
The self-storage industry in Budapest, Hungary’s capital city, is relatively young but showing a lot of promise. With few facilities in the market and existing operations experiencing high occupancy, demand is on the rise, driving gradual growth.
“This sector shows significant potential to flourish, as the market is driven by the high occupancy rates of established operators,” says Bongani Sechaba, facility operations manager for Budapest self-storage operator Miniraktar.com. “The data on these operators has shown that there’s a strong need for more storage facilities, as they consistently operate at near-full capacity. This demand shows a healthy market, with opportunities for new entrants.”
With a population of approximately 2 million, Budapest is broken into 23 districts, each with its own municipal government. Future self-storage development is largely focused on District XIII, the second-largest district, which has a population of 130,000 but no existing self-storage. The potential customer base includes a mix of residents, students, businesses and tradespeople.
“This region, known for its residential buildings and modern office spaces, is packed with people and businesses that require additional storage,” says Sechaba. “Residents living in older apartments with limited space and businesses needing room for inventory or documents are increasingly turning to self-storage solutions. The lack of sufficient storage in many homes and offices has created a compelling need for these services.”
The only purpose-built self-storage facility in Budapest is Euro Mini Storage, in District IX, which comprises 40,000 square feet. However, there are some conversion projects underway. SelfStore.hu, which has 10 locations in as many districts, has repurposed retail space in District III, while commercial real estate developer Organo Ltd. is developing a site for Miniraktar.com that’ll be the first in District XIII. The company is converting a 30,000-square-foot warehouse it’s owned since 1997.
Surmounting Self-Storage Obstacles in Budapest
Despite its bright future, the Budapest self-storage industry will need to clear a few hurdles to meet its potential. The first is raising industry awareness among potential customers and educating people on the benefits of the product. The second is the need to staff facilities with well-trained, customer-focused personnel to maintain high service standards. Finally, there’s the challenge of securing development financing. According to Sechaba, local banks have limited experience in funding these projects, making them reticent to lend on this asset type.
Even still, the Budapest self-storage market has seen slow but steady progress over the past two years; and Sechaba is optimistic about the prospects for the business. He expects that as awareness grows, demand will continue to increase. “We believe innovations in facility management and marketing strategies will help attract more customers,” he says.
This is why MiniRaktar.com plans to introduce more advanced technology at its facilities, including electronic access controls and smartphone verification, to enhance security and customer convenience. Other self-storage facilities in the area rely on basic security features like CCTV.
While still in its early stages, the Budapest self-storage industry holds significant potential for local operators and international developers seeking to enter Eastern Europe. As demand grows and awareness spreads, this city may become an influential industry player in the region.
Grant Boyd-Gibbins is chief executive at Sundance Group, the parent company of Organo Ltd., which primarily redevelops owned assets into new projects. Gibbins is an English expat real estate developer who has worked in Budapest since 1995. You can reach him at [email protected].
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