Office Market: What the future holds

The vacancy rate of the Budapest real estate market is still at a record  low level. However, we are facing a year of confidence, as even more volume of office is expected than last year, possibly leading to a rise in vacancy rate that has been low for years.

According to BRF's latest report, last year's domestic office stock expanded to 68,000 square meters. To this the new Ericsson building completed by the Hungarian Nobel Prize laureate Park I; Office Garden III building, handed over in the South Buda submarket; one of the new buildings on the Váci út corridor is the Balance Loft; as well as the Skylight City office building on the Pest side also contributed.

According to BRF's calculations, the total modern office space in Budapest is currently 3,415,550 square meters, 80 % of which are "A" and "B" type modern speculative office space, and the remaining 20 % is a private office.

In addition, the vacancy rate, although slightly (0.2 percentage points), continued to decline. The highest value is measured in the agglomeration, 32.2 % is the vacancy rate, while in South Buda, the most crowded segment of the office market, is 3.3 %.

The demand side in the fourth quarter of 2017 did not perform better than in the previous year. The 144,365 square meter office space sought is 13 % lower than the value registered in the same period last year. As regards the distribution, contract extensions and new tenants were almost the same in the market: thepresence of the previous was 32%, while the latter amounted to 31%. The lowest rate was shown by the share of own-holders, only 3%.

It is already certain that a number of new developments will be finished in 2018, which may alleviate the current situation and provide more opportunities for office space zoning. The vacancy rate has been moving at a record level for a long time, and the offices that are appearing will probably change it.

Source: 

https://www.portfolio.hu/ingatlan/iroda/hatalmas-robbanas-elott-a-budapesti-irodapiac.273945.html