Hungary’s GRT Group has completed the third, 18,500 sqm phase of its Office Garden office park in a rare delivery for the South Buda submarket.
The LEED “Gold” accredited Office Garden III is currently 95% let to such international and Hungarian tenants as Agco, SIA Pirelli, Manvit, Astra Zeneca and Pannontej.
“The demand for new office areas is significant because no new office scheme has been delivered in this area since 2010; the occupancy has reached almost 100% in record time,” said Robert Tilki, managing director of Robertson Hungary, which acted for the developers.
Office Garden is ultimately planned to consist of five phases that will deliver working places for around 7,000 staff in District IX, close to the Danube. Office Garden I was completed in 2008 and Office Garden II in 2010.
Also in south Buda, Wing has delivered the 24,000 sqm LEED “Gold” accredited Ericsson research and design headquarters at the Nobel Prize Winners Research & Development Park located on the bank of the Danube. Wing will start construction of a further 20,000 sqm phase at the site this year.
The two projects in South Buda were the largest handovers in the second half of last year, one of which is fully let and the other is a built-to-suit project. This reflects the growing demand for space in the submarket with access to the technical university and Infopark.
Although the projects are sustainability accredited, one critique of South Buda is that, despite its green environment close to the Danube, the area is lacking in development sites with direct metro access, a factor that has been one of the major reasons for the success of the Váci út corridor.
In another development overlooking the Danube, the MOL Campus that will include 33,000 sqm of office space providing work places for 2,500 staff is under construction. The LEED and BREEAM accredited complex, designed by Foster & Partners and Finta Studio, will include a landmark 120-meter office tower.
Demand for office space is continuing to rise and South Buda suffers from a lack of vacant space; the submarket has the lowest Budapest office vacancy rate. “The dominance of Váci út is expected to continue to grow in the near future, the size of modern office stock handed over in the area is going to surpass one million sqm by the end of the year,” said Eston International. “In the South Buda submarket, which with 3% has the lowest vacancy rate, completion of new offices of over 110,000 sqm of space is expected to be completed a year later in 2019.”
In the latest South Buda office complex, Bischoff & Compagnons is set to undertake development of the LEED certified Alphagon office building center. “Bischoff & Compagnons’ Alphagon office building, to be completed by mid-2019, is designed to provide an ideal environment for small- and medium-sized business, as well as large corporate tenants,” commented Mátyás Zórándy, regional investment manager of Bischoff & Compagnons. The company has been active as developers in the office and hotel sectors in Germany, Austria and CEE. The Budapest office was founded in 1999.
With regard to overall office supply, around 13 Budapest developments are planned for delivery this year. New supply is estimated at 700,000 sqm for 2017-2019 according to Cushman & Wakefield, with 390,000 sqm of space currently under construction. Vacancy stands at a record low 8.6% in a city with a total quality office stock of around 3.4 million sqm.