ADVERTISEMENT

CBRE: Hungary sees higher rents and declining yields in Q3

Deals

Similar to trends around the globe and especially in Europe, Hungaryʼs commercial real estate markets saw further yield contraction in the third quarter across all property sectors, reflecting growing investor demand and very low bond yields, according to the EMEA Prime Rents and Yields survey from global property advisor CBRE.

Throughout the 162 sector/city combinations in the EMEA region, 71 saw prime yields fall while none saw any increase over the quarter, the report showed.

In Hungary high-street retail (6.50%) and industrial prime yields (8.75%) dropped 50 bps year-on-year and 25 bps on the previous quarter, while office (7.25%) and shopping center (7.00%) yields remained stable in the past year; however, these two sectors are under immense pressure to correct downward, the report says.

Following the trends of declining availability and the lack of new supply across all sectors, a general rental increase has taken place. Retail assets (especially high-street units in downtown Budapest) registered the largest rental increase. Asking rents in the office and industrial sectors moved up slightly, while incentives (mostly rent-free periods) continued to decline, the report shows.

“Going forward we expect the absolute investment volume and its concentration by buyers to increase further as foreigner activity is on the rise. Hungarian investment volume is still only one quarter the level it was at the peak of the market. Budapest offers the strongest return profile in CEE with an expected return of over 11% p.a. This is driven by expected yield compression and a decent but solid annual rental growth on the back of low development pipeline”, Gábor Borbély, Head of Research and Consultancy at CBRE Hungary commented.

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Transformation Delineation - Microsoft country general manag... Podcasts

Transformation Delineation - Microsoft country general manag...

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.