Budapest office market sees robust occupier activity
The Budapest office market continues to enjoy a robust level of occupier activity, with historically low vacancy rates, according to Cushman & Wakefield’s Q1 2017 market statistics sent to the Budapest Business Journal today. Although there will be more product delivered to the market in 2018, C&W says 2017 looks to be the year of the landlord.
Development activity accelerated further in the first quarter and C&W expects approximately 100,000 square meters of new space to be delivered to the market this year. Next yearʼs supply is likely to surpass 250,000 sqm, C&W forecasts.
The vacancy rate continued to decrease and stood at 9.2% at the end of Q1. This represents a new record low vacancy rate for the capital of Budapest, C&W says. The Non-Central Buda South submarket continued to enjoy the lowest vacancy rate, with only 3.6% of stock available for lease.
As far as demand is concerned, 66,900 sqm of office space was transacted in Q1, which is in line with the last five yearsʼ average Q1 take-up. This, however, represented a decrease compared to the particularly strong Q4 2016 figure.
In terms of market size, C&W noted that one new office scheme was handed over in the first quarter, namely SAPʼs new scheme in Graphisoft Park, which extends to 5,500 sqm.
The total modern office stock in Budapest stands at 3.35 million sqm.
Headline rents continue to harden and increase for grade A product as availability continues to diminish, while net absorption remained positive with 7,600 sqm space absorbed over the quarter, says C&W.
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