Total modern office stock in Budapest above 4.05 mln sqm
The total modern office stock in Budapest currently adds up to 4,053,940 sqm, consisting of 3,387,460 sqm of "A" and "B" category speculative office space as well as 666,480 sqm of owner-occupied space, according to data by the Budapest Research Forum (BRF, which comprises CBRE, Colliers, Cushman & Wakefield, ESTON International, JLL and Robertson Hungary).
In the first quarter of 2022, three new office buildings and one owner-occupied refurbishment were delivered to the Hungarian capital's office market, representing a total of 78,350 sqm. In Q1, one office building was transferred from the speculative office stock to the owner-occupied stock, representing the reallocation of 2,800 sqm. Two buildings were removed from the modern speculative stock, totaling 4,810 sqm.
The office vacancy rate increased to 9.8%, representing a 0.6 pp increase quarter-on-quarter and an increase of 0.8 pp year-on-year. The lowest vacancy was registered in North Buda with a 5.6% vacancy rate, whereas the highest vacancy rate remained in the Periphery submarket (31%).
Net absorption has recovered to positive territory by the end of the first quarter, amounting to 44,100 sqm.
Total demand reached 80,750 sqm in Q1, representing a 7% increase year-on-year. Lease renewals stood for the largest share of total leasing activity with 47%, followed by new leases in the existing stock with 27%, expansions of existing premises reached 15%, while pre-leases in new developments reached 10% of the total demand.
The strongest occupational activity was recorded in South Buda, attracting 21% of the total demand. The Váci Corridor submarket reached second place with 17%, followed by the Central Pest (16%) and Non-Central Pest (16%) submarkets. North Buda also registered a double-digit share with 11% of the total demand.
Image by BRF
According to BRF, 122 lease agreements were concluded in Q1 2022 and the average deal size amounted to 662 sq m. The forum registered eight transactions concluded on more than 2,000 sqm office space, including four renewals, one new lease, two pre-lease, and one expansion.
The largest transaction during the first quarter was a lease renewal for a total of 8,410 sqm in Infopark, while the one new lease agreement was signed for a total of 3,760 sqm in Dorottya Udvar.
The Q1 2022 office market statistics continued to reflect the lingering uncertainties affecting the office market, yet it is reassuring that since the beginning of the pandemic, the first quarter of 2022 has had the strongest first quarter leasing activity.
The share of net take-up is higher than the share of renewals and with the arrival of a significant amount of new office space to the market, it could further increase, BRF argues.
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