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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