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Office property market expands slightly in 2005

Property developers signed new leases for 235,000 square meters of new office space in Hungary in 2005, slightly more than the 230,000 square meters peak in 2004, president-CEO of real estate brokerage Eston International Adorján Salamon told a press conference in Budapest on Thursday.

Take-up on the market for modern warehouse space fell, however, to 140,000 square meters in 2005 from 200,000 square meters in 2004. The fall was only temporary, Adorján said, adding that they expect demand on both the modern office and warehouse market to increase this year.


Take-up among hypermarkets and specialized stores grew at an especially fast pace in 2005. The year saw the entry on the market of sports equipment store Decatlon and furniture store Jysk. Family Center also opened two new stores, a 12,000 sqm store in Budapest and a 9,000 sqm unit in Szombathely, and specialty stores Material Design Center and Max City opened stores in the capital as well.


Rental fees for modern office space in Budapest were a monthly €14-€16.5 per square meter for category A'space and €12-€13.5 per square meter for category 'B' space in 2005. New office space in a converted government building on the capital's exclusive Roosevelt tér, however, was going for €20 per square meter.


Rental fees for industrial property continued to fall last year. New space was available for a monthly €4-€4.8 per square meter, and less modern space for between €3.8 and €5.5. Rental fees for retail and catering space were the most varied: on Váci utca, in the heart of the city, rents were as high as a monthly €100 per square meter, and at Liszt Ferenc tér, an area packed with high-priced cafes and restaurants, rents were in the €70-€80 range.


Property developers invested about €1 billion in Hungary last year, one-fourth of the region's total commercial real estate investments. Although assets in Hungary's open-ended investment funds tripled last year, the proportion of real estate in funds' portfolios fell due to a lack of high quality property on the market, Salamon said.