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.
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