FM newsroom – operations, digitalisation, office market. Vacancy has started to rise in the office market in recent years, but there is still room for further growth. At the same time, operators should take advantage of many more opportunities in terms of digitalisation.
In a regional comparison, Budapest is one of the office markets with a higher vacancy rate. Still, in contrast to other European countries, office development has almost completely stopped in the Hungarian capital. However, this can also speed up the recovery, said Gábor Borbély MRICS, CBRE’s research director, at the Portfolio Property X 2024 conference.
“There is no reason for sadness in today’s office market, but there are structural repositioning and challenges, which are appearing on the tenant side due to Covid and home office, and on the developer side due to ESG” – Portfolio.hu quotes Gábor Angel, Wing’s deputy CEO for office projects.
The market is now facing both cyclical and structural problems, but on the positive side, the vacancy rate in modern office buildings, for example, is 3-4 percentage points lower than the average.
No major problems
Since 2019, three significant impacts have shaped the office market: the Covid, the energy crisis and the Russian-Ukrainian war. Of these, the energy crisis has had a positive effect on sustainability.
In category B, vacancy rates have increased 6 percentage points since 2019 because there has been little new development, and the 11 percentage point increase in category A occurred because the stock increased by 20 percent.
What is worrisome, however, is that vacancy rates in newly delivered buildings are roughly 50 percent, a tenfold increase from 2019.
“There was still plenty of labour supply in the 2008-2010 period, but today, companies in Budapest can only attract labour from each other. This gives a boost to the market as tenants compete with each other to retain staff,“- added Miklós Ecsődi, Head of Occupier Services Director at Colliers.
Where is digitalisation in the office market?
In terms of digitalisation, the market would have many more opportunities than it is taking advantage of. Professionals’ mutual experience is that owners only touch things when they hurt a lot.
“We need to start from the basics, talk about the fact that AI is not the same as ChatGPT, and articulate what digitalisation is and what it means for the sector. IoT can also help in this because there is a lot of data available to ensure that the utilisation of the areas is as high as possible,” – said Gergő Berki, Business Unit Manager at TOPdesk Hungary.
For example, meeting rooms are often booked without real occupancy, which can now be measured by sensors and thermal cameras, which transmit the data to the operation. Ecsődi pointed out that he sees that 30-40 percent of large companies are already looking at their actual occupancy rates.
“Indeed, digitalisation is what can lead to success, but I’m often still sceptical about it. Although there are conscious tenants, many still don’t know how to use the thermostat correctly, for example, so there is a great need for both tenant and employee education,” – Gábor Angel shared his tips.
ESG and the office market
Sometimes, even ten-year-old buildings cannot meet the tenants’ expectations. This is an advantage for new buildings, but it also poses a risk that ten-year-old buildings can become empty.
“The market trends are not encouraging, but if we look behind the processes, the players can put themselves in a better position with a qualitative reorganisation. The developer or owner who can react to today’s situation is not in such big trouble,” – Ecsődi concluded.
