FM newsroom – office market, Budapest. Currently, a significant part of the entire modern office stock in Budapest is made up of modern speculative office space of categories “A” and “B”. In the fourth quarter of last year, the modern office stock in Budapest was expanded by a single new office building, and a total of 102,835 m2 of new office space was handed over.
The total modern office stock in Budapest currently amounts to 4,369,900 sqm, including 3,571,710 sqm of category “A” and “B” modern speculative office space, as well as 798,190 m2 of privately owned office buildings. In the fourth quarter of 2023, the modern office stock in Budapest was expanded with a new office building, totaling 25,320 sqm. The BEM Center Buda Center was handed over in the submarket. In the year 2023, 102,835 m2 of new office space was handed over – Robertson real estate advisor writes referring to the BRF (Budapest Research Forum) report.
29% annual growth
The gross demand in the fourth quarter of 2023 amounted to 131,315 sqm. This means a 4% decrease in a quarterly comparison and a 29% increase in an annual comparison. Within total demand, contract extensions represented the largest proportion with 52%. New contracts accounted for 43% of rentals, expansions for 2%, and pre-leasing contracts for 3%. BRF registered three sublease contracts during Q4. The total gross demand in 2023 was 464,570 sqm, while the net demand in the same period was 238,250 sqm. Gross rental increased by 19% and net rental by 21% compared to 2022.
Lowest and highest vacancy
The vacancy rate reached 13.5% in the fourth quarter of 2023. The vacancy rate increased by 0.3 percentage points compared to the previous quarter and by 2.2 percentage points compared to the same period of the previous year. In the fourth quarter of 2023, the lowest vacancy rate was registered in the North Buda submarket (8.7%), while the highest value was still measured in the agglomeration (36.8%). During the fourth quarter, net absorption entered a positive range, and the size of the office stock in use increased by a total of 6,590 sqm.
The size of transactions decreased by 3%
The highest tenant activity was still measured in the Váci út office corridor, where 28% of the total volume was contracted. The second largest activity was registered in the Pest Center submarket, where 20% of transactions were concluded.
BRF registered a total of 155 rental contracts during the fourth quarter, with an average size of 847 sqm. The size of the transactions decreased by 3% compared to the previous quarter. Four contracts were concluded for an area of more than 5,000 sqm, of which two were extensions and two were new contracts.
The largest transactions of the quarter were contract extensions: one in myhive Átrium Park, on 12,390 sqm, and one in Mill Park, on more than 7,000 sqm.
