Atenor has finished the construction of the 21,000 sqm first phase of the Aréna Business Campus; the company has met the deadline according to the original schedule and the official hand-over will be in June, the Belgium-based developer says.
The phased, BREEAM “Excellent” accredited Campus in District VIII on the outer boulevard of Budapest will consist of 80,000 sqm of office and retail space. Essentially, the development is due to complete one of its four phases every year for four years.
“The leasing of Building ‘A’ is in an advanced phase; we have signed lease contracts and letter of intents on nearly 40% of it. Building ‘B’ is due to be completed in the the second quarter of 2021,” says Zoltán Borbély, country director of Atenor Hungary.
Cushman & Wakefield believes the Budapest office market (along with the logistics sector) will remain in a relatively favorable position in the face of the coronavirus and subsequent governmental shutdown measures to combat this.
“Business as usual: Q1 transactional activity is not affected. Ongoing transactions proceed towards closing and the Q2-Q4 period is expected to be dominated by renewals,” the consultancy says in its latest overview of the office market.
“Ongoing development schemes are proceeding with no delays reported. Permitting processes have slowed down. Due to solid fundamentals with no oversupply threat and current low availability levels, the Budapest office market enjoys stable rental levels in the short term,” it adds.
This sentiment is echoed from the developer perspective by Atenor. “We have seen no negative impact from the Coronavirus in the letting process so far, as we have just signed a 7,500 sqm lease at Váci Greens and additional transactions are coming soon in both Váci Greens ‘E’ and ‘F’ and Aréna Business Campus,” comments Nikolett Püschl, leasing and development director at Atenor Hungary.
“Further, we are successfully maintaining our rental levels. Definitely there are many sectors that are already fighting to stay alive. But the office market is not expected to be deeply affected,” she explains.
Total modern office stock in Budapest now stands at 3.74 million sqm, 3.1 million of which is leasable class ‘A’ and ‘B’ complexes, according to the Budapest Research Forum (consisting of CBRE, Cushman & Wakefield, JLL, Colliers International, Eston International and Robertson Hungary).
The overall vacancy rate stands at 6.2% as of the first quarter of the year. Around 55,000 sqm of office space was delivered in Q1: the first 27,000 sqm phase of the Budapest ONE Business Park by Futureal, that will form part of the Kelenföld urban redevelopment project, and the 18,000 sqm BudaPart Gate at the BudaPart mixed-use complex by Property Market on the southern Buda bank of the Danube.
Cushman & Wakefield have traced an improved pipeline of 230,000 sqm for 2020, although 60% of this space is already pre-let. With the current crisis, virtual viewings are becoming more frequent and there is new demand for flexible space in the current environment.