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Commercial property markets to struggle in 2009

  In the H2 of 2008, Hungary’s economy was hit by the global crisis, but the effect of the crisis was not visible in the most of the commercial property sectors at the end of last year, but 2009 will bring significant changes, according to real estate consultant DTZ’s Commercial Property Markets Overview.

Both new office supply and take-up have exceeded the figures of the previous years, and modern office stock surpassed 2 million square meters (sq.m.).

Twenty-two percent of the demand aimed offices under construction and stock has grown by nearly 250,000 sq.m., which made the vacancy rate, rise to 16.8%, which hasn’t reached this level since Q3 2004. New warehouse supply in 2008 was two and a half times as much as in 2007.

Take-up was 83% higher, mostly realized by the logistics sector.

The countryside played the dominant role in the retail market. 90% of the new supply was located in provincial cities. Debrecen has the second-greatest saturation level after Budapest, while DTZ forecasts Győr to be the second by 2011.

The investment market was hit hardest by the crisis. After a record-breaking 2007 investment volumes have fallen back by 80%.

DTZ anticipates that the pricing gap should start to narrow in 2009 as vendors become more financially distressed and occupier demand weakens markedly. (BBJ, Napi Gazdaság)