JLL sees growing developments on Budapest office market
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Increasing development activity in Budapest has affected the vacancy rate, which has slightly increased to 10.9% as a result of vacant space in newly completed buildings and in buildings from where tenants have moved out, says the latest Budapest Office Market Pulse quarterly report by real estate services firm JLL, sent to the Budapest Business Journal today.
During the period from January to September, five new office buildings were completed with total space of 70,870 square meters, JLL notes, adding that this is already 39% higher than the annual completion volume last year. JLL also expects delivery of Nokiaʼs new 25,000-sqm headquarters to take place by the end of the year.
As the development mood is seen intensifying, a further 240,000 sqm of new office space is set to appear on the market in the next two years, based on JLLʼs calculations.
As far as the third quarter is concerned, demand remained strong in the market. Gross take-up totaled 95,230 sqm, in line with the third-quarter occupational activity of the past four years, according to JLL. Of this volume, net take-up totaled 56,110 sqm, indicating a 22% increase on the corresponding period of 2015. In terms of leases, it can be said that the SSC, consulting, IT and financial sectors have the highest activity in the market, according to the report.
Statistical data of submarkets reinforces the results of previous quarters. The most popular office locations are the Váci Corridor, Pest Central South and Buda South submarkets, JLL says. Buda South has the lowest vacancy rate, with 4.3%, a rate that has decreased from quarter to quarter in recent times in the case of this submarket. Of nine office submarkets, the highest availability (relative to stock) is recorded in the Periphery submarket with 35.7%, JLL adds.
“Based on our forecasts until the end of 2016, we do not expect significant change in the case of the vacancy rate in Budapest, which will remain under 11%. Due to the fact that the occupancy of properties currently under construction already reaches 40%, we donʼt expect a massive increase in the vacancy rate in the coming two years either,” said Rita Tuza, Head of Research at JLL, in connection with the report.
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