87,750 sqm of office area delivered to Budapest market in Q2
Image by Pixabay
In the second quarter of 2020, 87,750 sqm new office area was delivered to the Budapest office market in five buildings, according to a quarterly report by the Budapest Research Forum (BRF).
Image by Pixabay
BRF (which comprises CBRE, Colliers International, Cushman & Wakefield, ESTON International, JLL, and Robertson Hungary) says that Agora Tower (34,500 sqm) and Váci Greens F (25,050 sqm) were handed over in the Váci Corridor submarket.
Elsewhere, the first phase of Arena Business Campus (20,400 sqm) was completed in Non-Central Pest, and Kálmán Imre 20 (2,300 sqm) was added to the stock in the Central Business District (CBD).
The owner-occupied office stock was extended by the new HQ of Market Zrt. (5,500 sqm).
Meanwhile, an office building with 8,445 sqm in the CBD was excluded from the modern stock due to a change in its functional profile.
The total modern office stock currently adds up to 3,817,305 sqm, consisting of 3,204,915 sqm category "A" and "B" speculative office space as well as 612,390 sqm owner-occupied space.
The office vacancy rate has increased to 7.3%, representing a 1 pp increase quarter-on-quarter, and a 1.1 pp growth year-on-year. The lowest vacancy rate of 2.8% was measured in the North Buda submarket, whereas the Periphery still suffers from an overwhelming 33.6% vacancy rate.
The net absorption in Q2 2020 amounted to 31,430 sqm.
Total demand in the second quarter reached 87,990 sqm, representing a 46% decrease year-on-year. Out of the total leasing activity, renewals still represented the largest share. Some 55% of the total demand was made up of lease renewals. New leases accounted for 27%, expansions for 4%, while pre-leases made up 14% of the total demand.
The strongest occupational activity was recorded in the Váci Road submarket, attracting 25% of the total demand. Central Pest submarket ranked second with a share of 23%, followed by South Buda submarket as 19% of the total demand was realized here.
According to the BRF, 114 office agreements were concluded in the second quarter, with the number of signed transactions dropping by almost 50% year-on-year. The average deal size amounted to 772 sqm which is in line with the figure measured in the second quarter of 2019.
BRF registered nine transactions occupying more than 3,000 sqm office area split into three new transactions, four renewals, and two pre-lease agreements.
Overall, the largest transaction was a pre-lease agreement for 8,000 sqm in the South Buda submarket; while the largest new transaction in the existing stock was concluded for more than 7,000 sqm in the Central Pest submarket. The largest renewal was registered in Westend City Center at 4,790 sqm.
BRF notes that Q2 office market statistics already reflected the economic restrictions triggered by the COVID-19 pandemic. Total leasing activity decreased considerably as the number of transactions showed a significant reduction.
Based on headline rents in the current availability, only minimal rent correction has been registered, mainly in category "B" office schemes, the report notes.
MNB Gauges Interest in Operating on Hungary Crypto-assets Ma...
Bulgaria's Household Income, Spending Rise 20% in 2023
Budapest Airport Building on ‘Strong Employer Brand’ and ‘Vi...
Silvanus Hotel Under Reconstruction, Will Reopen in Fall
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
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.
