Four offices delivered in Budapest in Q4 2017
Four new office buildings were delivered to the Budapest office market in the fourth quarter of 2017, spanning 67,920 square meters, the Budapest Research Forum (comprising CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary) says in its Q4 2017 office market summary.
Skylight City, one of four office buildings to be delivered to the Budapest market in the fourth quarter of 2017.
The buildings included the first phase of the Hungarian Nobel Park, which was developed as a single-tenant built-to-suit scheme for Ericsson on 24,000 square meters. In the South Buda submarket, Office Garden III was handed over with 18,510 sqm of office area.
The Váci Corridor submarket stock was increased with the delivery of Balance Loft (6,500 sqm). Finally, 18,910 sqm of office area was added to the Non-Central Pest submarket with the completion of Skylight City, the BRF said in a press release sent to the Budapest Business Journal.
The total modern office stock now adds up to 3,415,550 sqm, consisting of 2,754,595 sqm of category "A" and "B" speculative office space, and 660,950 sqm of owner-occupied space.
The overall office vacancy rate has decreased to 7.5%, representing a 0.2 percentage-point reduction quarter-on-quarter, and now stands at the lowest rate yet recorded on the Budapest office market.
In line with the preceding quarters, the lowest vacancy rate was measured in the South Buda submarket (3.3%), while the Periphery still has a much higher 32.2% vacancy rate.
Total demand in the fourth quarter of 2017 reached 144,365 sqm, representing a 13% decrease year-on-year, the BRF summary shows. Renewals accounted for 32.1% of total leasing activity, while new transactions represented a 30.9% share. Pre-leases accounted for 22.7%, and expansions made up 10.8% of the total.
Strongest activity in Váci Corridor
The strongest occupational activity was recorded in the Váci Corridor submarket, attracting almost 30% of the total demand. This was followed by the Non-Central Pest (25.3%) and Central Buda (22.7%) submarkets.
According to the BRF, 169 lease agreements were signed in Q4 2017, with an average deal size of 854 sqm. The forum registered 37 transactions occupying more than 1,000 sqm office area, split into 14 renewals, nine new transactions, eight pre-leases, five expansions, and one owner-occupation transaction.
The largest transaction during the fourth quarter was a pre-lease agreement at HillSide Offices, where Fundamenta will move into 10,235 sqm of space. The second largest deal was also a pre-lease for 8,000 sqm at Promenade Gardens. The largest new transaction was concluded at Skylight City, for 5,980 sqm of space.
Net absorption in the fourth quarter amounted to 65,205 sqm, the BRF said.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.