The annual real estate market analysis of DLA Piper Hungary shows that investor confidence in office properties remained unbroken in 2020 and accounted for 60% of the firm’s transactions. The vast majority of these office transactions involved Class A office buildings in central locations of Budapest. The law firm notes that offices will remain important long after the COVID-19 epidemic as a workplace and as an investment asset, according to market participants.
Due to the challenges and uncertainty caused by COVID-19, investment volume decreased by 20% compared to 2019; however, the Hungarian commercial real estate market continued to attract domestic and foreign investors. Although it was expected that COVID-19 would make it harder for foreign investors to transact and domestic investors would have an advantage, the market share of domestic investors dropped in 2020 to 61% from 72% in 2019.
"The arrival of the pandemic in March 2020 affected the entire Hungarian real estate sector – however, it had vastly different effects on the different market actors and asset classes. During the transactions we managed, we saw a virtually instant disappearing of investor interest in retail and hospitality-related assets, while logistic and industrial properties came into the focus," said Szilárd Kui, local partner and head of real estate at DLA Piper Hungary.
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