Office market demand peaks in Q4 last year
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Demand on the Hungarian office market peaked in the last quarter of 2016, according to a press statement sent to the Budapest Business Journal by Cushman & Wakefield today. This strong last quarter increased the yearly take-up volume to 466,700 square meters, the second highest volume on record.
While the vacancy rate decreased further, at yearʼs end a new record low vacancy of 9.5% was gauged for the total office stock in Budapest. The capital’s office market vacancy rate has never before fallen below 10%.
Several new developments broke ground speculatively in the second half of 2016, as far as new supply is concerned. C&W said it expects 110,000 sqm of new office supply in Budapest in 2017. Meanwhile, the total market size grew to 3.36 million sqm with the handover of the next phase of the Corvin development of 25,400 sqm.
More than 163,600 sqm of office leasing transactions were closed in Budapest. Pre-leases contributed to 30% of leasing activity, with six agreements closed in the final quarter, totaling around 48,400 sqm office space, according to C&W.
Net absorption reached 68,790 sqm, the highest quarterly volume of the past five years. Given the surge in occupier activity and a lack of new stock being released to the market, headline rents witnessed growth and incentive packages shortened, according to C&W.
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