The report referred to Hungary as an economy supported by cheap energy, low interest rates and relatively low exposure to the slowdown in China with a GDP growth of 2.9% in 2015. From a property market perspective this translates as strong household consumption that will inevitably impact retail markets. In fact tenant turnover has already increased significantly, in some cases in double digits, according to the report.
Growth in the automotive sector has also proven beneficial in the development of industrial properties and the expansion of ICT services, which are expected to dominate the Budapest office scene, CBRE said. The report also noted that office demand was already up 51% year-on-year.
Cautious developers have helped improve rental outlook for property owners, according to CBRE, adding that a strong occupational market and more affordable financing, could lead to the compression of yield levels, which are currently quite high as compared to other core Central European markets, the report added.
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