The 44,265 sqm extension of total Budapest modern office space in the quarter was due to the delivery of four new office buildings: HillSide Offices (21,925 sqm), Tópark Offices (15,355 sqm), Pasaréti Irodaház (5,870 sqm), and Société Budapest (1,120 sqm). In addition, two former Magyar Telekom headquarters (30,545 sqm) were transferred from the owner-occupied stock to the speculative stock during the quarter, due to a change in their operation.

Of the 3,628,105 sqm total stock, 3,018,390 sqm consists of category ʼAʼ and ʼBʼ speculative office space, while 609,715 sqm serves as owner-occupied space.

The Q4 vacancy rate of 7.3% represents a 90 basis-point increase compared to the previous quarter, but a 20 basis-point reduction year-on-year. The lowest vacancy rate (3.4%) was measured in the Non-Central Pest submarket, followed by Váci Corridor (4.3%). At the same time, the Periphery still has a very high vacancy of 38%.

Total demand in Q4 grew 19% year-on-year, standing at 171,490 sqm. Total annual demand came to 535,560 sqm, reaching the record volume registered in 2015. The largest share of total demand in the quarter comprised new lease agreements, taking up 36.2%, while pre-leases accounted for 26.3%, with renewals amounting to 25.3%, and expansions representing 12.2%.

Just as in Q3, the strongest occupational activity was recorded in the Váci Corridor, attracting 38% of total demand. The Váci Corridor was followed by North Buda (15%), CBD (13%), and South Buda (11%).

The BRF says that 202 lease agreements were signed in Q4, with an average deal size of 849 sqm. The forum registered 34 transactions occupying more than 1,000 sqm office area, split into eight pre-leases, 10 renewals, 12 new transactions, and four expansions.

The largest transaction of the quarter was the pre-lease agreement concluded by Raiffeisen for 19,300 sqm in the Agora Tower. The North Buda submarket registered the largest renewal on more than 10,000 sqm. The biggest new lease was registered for 6,200 sqm in the White House, while the largest expansion was signed for 2,300 sqm at the Váci 33 office building.

Net absorption in Q4 came to 6,350 sqm, with annual net absorption totaling 228,380 sqm, which is 79% higher than the volume registered in 2017.

The BRF comprises CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL, and Robertson Hungary.