Budapest modern office stock at 3,935,990 sqm in Q1

Office Market

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

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The total modern office stock in Budapest added up to 3,935,990 sqm in Q1 2021, according to data compiled by the Budapest Research Forum (BRF).

Budapest's current modern office stock consists of 3,296,520 sqm of "A" and "B" category speculative office space as well as 639,470 sqm of owner-occupied space.

In the first quarter of 2021, 24,700 sqm of new office space was delivered to the market. Univerzum Office Building (22,000 sqm) was handed over in the South Buda submarket and JA4 Loft Offices (2,700 sqm) was delivered in the Non-Central Pest submarket.

As a result of BRF's annual stock revision, 32 buildings’ GLA has been amended as of Q1 due to re-measurement or refurbishment over the past year, a total 24,920 sqm office space has been moved to owner-occupied stock and one office building was excluded from the speculative office stock.

The office vacancy rate has slightly decreased to 9%, representing a 0.1 pp decrease quarter-on-quarter and a 2.8 pp increase year-on-year. In line with the preceding quarters, the most occupied submarket is the North Buda submarket with a 4.8% vacancy rate whereas the highest vacancy rate remained in the Periphery (27.5%).

Net absorption rebounded to positive territory during the quarter, as the total occupied stock increased by 5,240 sqm adjusted for size revisions.

Total demand reached 74,900 sqm in Q1 2021, representing a 13% decrease quarter-on-quarter and a 6% decrease year-on-year. Renewals made up the largest share of total leasing activity with 48%, followed by new leases in the existing stock with 41%, expansions of existing premises reached 6%, while pre-leases in new developments amounted to 3% and owner-occupation was 2% of the total demand.

The strongest occupational activity was recorded in the Váci Corridor submarket, attracting 51% of the total demand. The South Buda and Central Pest submarkets equally ranked second in this respect with 13% share each, and CBD attracted 8% of the total demand.

According to the BRF, 120 lease agreements were concluded in Q1 2021; the average deal size amounted to 624 sqm. The forum registered five transactions concluded on more than 2,000 sqm office space, including three renewals and two new leases.

The largest new agreement was signed for a total of 7,180 sqm by Huawei in Agora Hub and Agora Tower office buildings, while the largest renewal was an 11,500 sqm deal in the Thirteen Globe office building. The largest pre-lease deal was concluded for 1,370 sqm office space by Randstad in Green Court Office.

The Q1 2021 office market statistics continued to reflect the uncertainties and economic slowdown triggered by the COVID-19 pandemic, BRF notes. While quarterly demand remained somewhat weaker than in previous years, the gap narrowed as the number of transactions showed recovery.


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