FM newsroom – office market, Budapest. In the first quarter of 2024, two buildings were delivered to the Budapest office market. Net demand showed a 25% increase compared to the first quarter of 2023. The vacancy rate reached 18.8% – the lowest in North Buda and highest in the periphery.
Two new office buildings were delivered
The Budapest Research Forum published its Q1 2024 office market summary. According to the report, the total modern office stock in Budapest currently amounts to 4,377,170 sqm, consisting of 3,560,590 sqm of ‘A’ and ‘B’ category speculative office space and 816,580 sqm of owner-occupied office space.
In the first quarter, two office buildings were delivered to the Budapest office market with a total of 26,440 sqm. Millennium Gardens South (Phase 2) was handed over in the Central Pest submarket, while the owner-occupied Knorr-Bremse R&D Center was completed in South Buda submarket.
Total demand reflecting 24% growth
Total demand reached 94,980 sqm in Q1 2024, reflecting a 24% increase year-on-year. Renewals accounted for the largest share of total leasing activity, with 53%, followed by new leases, with a share of 36%. Expansions took up 9%, while owner-occupied deals took up 2% of the total demand.
Net take-up (excluding renewals) reached 42,270 sqm in the first quarter of the year, a 25% increase compared to the same period in 2023.
The lowest and highest vacancy
The office vacancy rate increased to 13.8%, representing a 0.4 pps growth quarter-on-quarter and a 1.5 pps increase year-on-year. The lowest vacancy was registered in North Buda with a vacancy rate of 8.4%, whereas the highest vacancy rate remained in the Periphery submarket (33.3%). There was no net absorption (corrected with size changes) in the first quarter of 2024.
The strongest occupational activity
The strongest occupational activity was recorded on the Váci Corridor, attracting 29% of the total demand, and it was followed by the CBD submarket, reaching 21%. According to BRF, 153 lease agreements were concluded in Q1 2024, and the average deal size amounted to 621 sqm, reflecting a 27% decrease in average deal size quarter-on-quarter.
BRF registered five transactions concluded on more than 3,000 sqm of office space, including four renewals and one new lease. The most significant transactions in the quarter were in Váci Corridor and in the CBD submarket.
Images: BRF, eston.hu, millenniumgardens.hu
