CBRE: Budapest retail market sees growth
Rents in Budapest’s retail market are being pushed up by impressive turnover growth, increasing retailer demand and lack of new supply, global property advisor CBRE’s Hungarian Retail Market Report published today reveals.
New retail supply has reached historic lows in recent years, the report says, given that since 2012 less than 50,000 sqm of new retail space has been delivered in Hungary. The entire modern retail stock in Hungary – including retail warehouses but not high-street shops – amounts to 3.6 million sqm. Half of this volume is concentrated in Budapest and its agglomeration, while 27% is located in cities with populations over 100,000. Only 25% of the stock is located in other cities.
Retail sales in Hungary saw a year-on-year rise of 6.1% in the first half of the year, which is a clear acceleration compared to previous years. Similarly high levels were last measured in 2006. The Hungarian retail sales growth is in line with the general trend in CEE, CBRE says. The average CEE growth rate significantly exceeds the average level of the EU-28 (+2.8%) and the Eurozone (+2.2%), data by CBRE reveals.
CBRE has registered a growing number of new retailers on the Hungarian market, with 13 international brands having already entered or scheduled to enter this year. The figures have doubled from last year’s six, CBRE adds. New retailers target prime high-street locations and prime shopping centers in Budapest, most of them fashion and homeware retailers, with Italian and CEE brands were the most active.
Apart from international retailers, several new Hungarian brands – mainly start-up fashion brands and food retailers – have also appeared on the market. “On Andrássy út alone, eight new branded shops will open in 2015, amongst them J.Press, Michal Negrin, O’bag and Michael Kors, Polo Ralph Lauren and COS coming by late October”, Anita Csörgő Head of Retail at CBRE Budapest said.
Rental levels have increased across all market segments in H1 2015. The largest increase was witnessed among Budapest high-street retail units, where typical rents are now in the range of €60-100/sqm/month for a 200 sqm unit. Demand for units in areas with high tourist footfall has risen in some regional cities as well as Budapest’s downtown shopping areas. Prime shopping centers’ rental rates in Budapest are quoted between €50-80 /sqm/month, also above last year’s level. The best shopping centers in regional cities have experienced remarkable growth of up to 25% y.o.y.
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