Budapest commercial property rents on the rise
Over a two-year period until the end of 2017, typical rents for commercial properties in Budapest increased by more than 15%, a relaunched survey by the National Bank of Hungary (MNB) and the Royal Institution of Chartered Surveyors (RICS) has found, as reported by national news agency MTI.
As a joint initiative of the MNB and RICS, the questionnaire-based Market Sentiment Survey, looking at the Budapest commercial property market, was relaunched for the second half of 2017 with 43 responding experts. The survey monitors market sentiment on a bi-annual basis. Respondents provide data on typical rents, lease periods and yields in the various segments, as well as their expectations for the next six months.
The typical rent for a top office building in Budapestʼs central business district (CBD) was EUR 18 per square meter in the second half of 2017, the survey found. For prime non-CBD office buildings, the average rent was EUR 14.5 per sqm, and EUR 12.5 per sqm for good-quality non-central office buildings.
The top five shopping malls had typical rents of EUR 52.50 per sqm, while space in other mall-type retail parks went for EUR 20 per sqm.
Compared to the results of the previous survey for the second half of 2015, typical yields have significantly fallen in every segment. Yields for top CBD office buildings and top shopping malls were both 6%. Prime yields for the office market and shopping centers were within 10-25 basis points of the historical minimum observed in 2007.
The majority of respondents in the survey said they expect to see growing demand for investment in the next six months, especially on the office market. An increase is expected mainly for properties of the best quality and location, which signify lower risks for investors.
Although the office market is already witnessing a large volume of ongoing developments, the majority of respondents project a further increase in development activity. Market participants forecast strong occupier demand for each property type, especially for properties of the best quality and location.
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