New Office Hubs Attracting Developers
One of the major challenges for office developers in Budapest is to source suitably-sized, well-located development plots that provide visibility, at a time when competition for such space is becoming more intense, as the Budapest Business Journal discovers.
BudaPart GATE by Property Market.
The established trend is for office development to be undertaken in urban locations that are integrated into the wider city. It is important to evaluate a project on the community level and not just as a stand-alone building, according to Zsombor Barta, president of the Hungarian Green building council (HuGBC).
The preference for workplaces within an urban environment is reflected in figures from the Budapest Research Forum that puts vacancy in-non central Pest at a very low 1% compared to 33.6% for the periphery.
With the norm now for projects located in urban environments, developers are delivering schemes that are perceived as providing a reciprocal benefit for staff and residents in the vicinity.
“Every location is different and a new building has to be adapted into its environment. In order to achieve this, open dialogue is required with the municipality, urban planners, other developers and representatives of local inhabitants,” comments Mátyás Gereben, country manager for Hungary at CPI Property Group.
The Váci Corridor remains the favored Budapest development destination with almost 900,000 sqm of stock as of the turn of the year, according to Cushman & Wakefield, with vacancy of 4% and the highest share of take-up in the Budapest office market.
However, with the growing popularity of the area, well-located sites have becoming more difficult to source and developers are looking at other areas of the city.
The outer boulevard is now developing into an office hub with the Aréna Business Campus by Atenor and the Liberty office complex, from Wing, which has already delivered the Magyar Telekom headquarters nearby.
The most challenging area for development sites continues to be the historic core of Budapest, where planning regulations do not allow for the development of a high-rise central business district as has been the case in Warsaw, for example.
One rare development project in Budapest’s historical center is the 12,500 sqm Szervita Square Building, an office, retail and residential complex by Horizon Development. Attila Kovács, managing partner of the developer, says the number of plots in the CBD is becoming more scarce and competition growing.
What Budapest does have is quality development sites on the Buda riverfront where, for example, Wing is developing the headquarters of evosoft Hungary, part of the Siemens Group.
South Buda has been established as something of a high-tech hub for Budapest and the sub-market is the second most active with 173,000 sqm under construction, according to Cushman & Wakefield, alongside total office stock of around 380,000 sqm with vacancy of about 5%.
Another south Buda waterside development is BudaPart by Property Market on the bank of the Danube at the Kopaszi Gát (Kopasz Dam).
“BudaPart, as a project with mixed functions, offers a complex opportunity for its tenants. Thanks to being located next to the Danube and Kopasz Dam, we are close to nature and a green environment, but as a result of the neighborhood’s services, the workers can enjoy the urban vibe as well,” says Borbála Telekesi-Csuhay, sales and asset management director at Property Market.
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