CBRE map plots office rents against metro stations

The map above — prepared by CBRE Hungary — shows metro stations with each area’s vacant office spaces and their monthly rental fees, including vacant offices by time (Q1) or that will be available in the next half a year and their current rental fees.

Even though the situation may change within a few months, CBRE Hungary has observed significant price differences between stations only a few hundred meters apart. For example, the rental fee of offices around Arany János utca are 40% higher than the offices around Western (Nyugati) Railway Station, and the area of Deák Ferenc tér is 30% more expensive than the offices at the merging point of Bajcsy-Zsilinszky út and Andrássy út.

Therefore, CBRE believes it is “no surprise” that most of the Budapest offices are along Váci út and that the majority of the vacant office space is also there, where tens of thousands of sqm is available for rent. The monthly rent goes from EUR 10.6/sqm (Gyöngyösi utca) to EUR 13.1/sqm (Dózsa György út); the average rental price is EUR 11.6/sqm/month, CBRE says.

Another obvious factor largely affecting rent is the quality of office space, CBRE notes. Along the M3 line there is only one significant office area between Arany János utca and Corvin Quarter, and going southeast from here companies targeting south Pest can only move to the Népliget station area.

Office buildings around Downtown Budapest (the Central Business District or CBD) metro stations remain the most expensive location: the rental price of free space ranges from EUR 12.8/sqm/month (Kálvin tér) to EUR 20.5/sqm/month (Kossuth tér). It is typical also for this area that currently (Q1 2017), a significant proportion of the office space (several thousand sqm) is vacant and is available, CBRE adds.

The M4 line also appears to offer only limited supply of offices to choose from; even Andrássy út, which is not seen as being very rich in office space, precedes the offers along the South Pest-South Buda line. Similarly, the average rental (EUR 13.2/sqm/month) is significantly higher along the Millennium Subway (M1) than in the office buildings around the stations of the latest M4 line (EUR 11.5/sqm/month). The highest average office rental (EUR 13.8/sqm/month) is along the M2 metro line, the second busiest line after the M3.

Contrary to larger Western European cities, metro terminals in Budapest are not significant office market locations: neither the area of Újpest-Központ, nor Örs Vezér tere or Kőbánya-Kispest, is rich in (vacant) office buildings, and even significant hubs like Nagyvárad tér or Ecseri út do not have any modern office buildings, CBRE adds.

The interesting anomaly of the Budapest metro and real estate development is that significant office locations are not served by the city’s metro network. For example, the Lágymányos office area, which has 6% of the capital’s total office space (nearly 200,000 sqm) can mainly be reached by tramway Nr. 4-6, and several areas of inner Buda are also far from the metro stations.

"Budapest public transport network plays a very important role for tenants when searching for an office. Big companies pay a particular attention to finding a location that’s easily accessible by underground. We cannot overrate the importance of the M3 metro line, because it serves Váci út, the largest office submarket, where even presently we find the most development. The price map of new offices by CBRE helps tenants to see the average rental for each metro station area; however there may be big deviations in both directions depending on the building and on the specific demands," says Károly Katkó, CBRE’s head of tenant representation and global workplace solutions.

As far as CBRE Hungary’s methodology for the map is concerned, the list contains only modern Budapest offices that are available at the end of Q1 2017 and/or are foreseeable to enter the market within the next three to six months. Groups were created based on the walking distance between the office and the metro station. The data of the CBRE map is updated quarterly, and there may be significant changes around certain metro stations even within a few months because of companies moving in and out.

See this Fridayʼs (May 5) print issue of the Budapest Business Journal for a special report on the Budapest office market.