FM newsroom – office market. Budapest’s Office Market Forum (BIEF) has released its fourth-quarter 2025 report, providing an overview of the market. The figures show sharply reduced development activity alongside a gradual easing of vacancy rates.
Few New Offices, Clearer Picture
According to the BIEF summary, only around 50,000 sqm of office space were delivered during the year, and for six months, there were no handovers at all. By year-end, Budapest’s modern office stock stood at 4.46 million sqm, of which 3.52 million sqm is speculative space.
In the final quarter, just two buildings were completed: Dürer Park I and II, totalling 50,000 sqm. These projects are now used by Hungarian state institutions. Earlier in the year, the Rhodium Office Building on Váci Road and the much smaller Wagner Palace were completed, before deliveries ground to a halt, Economix reports.
Vacancy Rates Slowly Improve
The lack of new supply has had one clear effect: vacancy rates are falling. By the end of the fourth quarter, the vacancy rate stood at 12.5 per cent, down 0.9 percentage points from the previous quarter and 1.6 points year on year.
While vacancy remains above the 10 per cent mark, the trend is encouraging. In today’s context, experts see the current level as a sign of a balanced and stable market rather than a cause for concern.
Demand Holds Up, Leasing Activity Grows
Leasing demand gained momentum towards the end of the year. Total demand in the fourth quarter reached 191,000 sqm, up 12 per cent year on year, partly driven by state-related transactions.
Lease renewals accounted for 43 per cent of activity, while new leases made up 24 per cent. Preleases and expansions played only a minor role. Net demand rose sharply to 56,000 sqm, a 39 per cent increase year on year, while net absorption turned positive at 84,000 sqm.
In short, the market appears to have stabilised, with solid underlying fundamentals.
Váci Road Leads the Way
As in previous years, the Váci Road office corridor proved the most active submarket, attracting 32 per cent of total demand. Pest Central matched this share, while South Buda followed with 14 per cent.
Overall tenant activity slightly exceeded 2024 levels, making 2025 the strongest year for leasing in the past six years. That said, a significant portion of this activity came from lease renewals and owner-occupied moves rather than fresh market expansion.
Development at a Historic Low
Only 55,000 sqms of office space were delivered in 2025, and around 90 per cent of this was linked to the public sector. Strip out the two Dürer Park buildings, and the new private-sector supply shrinks to just 5,000 sqm.
This sharp slowdown reflects not only market caution but also broader changes in workplace culture and demand.
Looking Ahead: Quality Over Quantity
Despite the drop in development, demand for high-quality, sustainable office buildings remains strong. Older, B-grade offices—around a third of the speculative stock—are under pressure and will need major upgrades, energy-efficient systems, or even complete changes of use.
Vacated state-owned buildings in central locations could be transformed into hotels or high-end residential schemes. At the same time, new public-sector relocations in areas such as Újbuda and Zugló may again influence vacancy levels.
Today, the focus is less on square metres and more on experience. Tenants are looking for flexible, tech-enabled, sustainable spaces that support hybrid working.
Cautious Optimism
There is also cautious optimism in the market. Around 100,000 sqm of speculative office developments are currently under construction and could be delivered by the end of 2027, largely along the Váci Road corridor.
Market experts expect new entrants from 2026, with prime office space becoming increasingly scarce—and increasingly valuable.