BRF – 2009 Q II.

Members of the Budapest Research Forum include CB Richard Ellis, Colliers International, Cushman & Wakefield, DTZ and Jones Lang LaSalle. The group has collated all information and now reports the office market data for the second quarter of 2009.

In total 118,118 square metres (sq m) of office space was let in the period from 1st April to 30th June 2009.  This figure is second highest only to Q4 2008 in the history of the Budapest market. The Q2 take-up splits as follows: 27% pre-let in projects currently under construction; 33% new leases in existing office buildings and 40% renegotiation/renewal of current lease agreements. The share of renewals has been increasing quarter on quarter. 

Budapest Bank (GE Money Bank) signed the largest office transaction this quarter with an area extending to 16,740 sq m representing the entire GTC Metro project which remains under construction. Among the other larger deals registered: Raiffeisen Bank renewed their 11,880 sq m lease in the Akadémia Bank Centre building and British Petroleum leased 6,210 sq m in Haller Gardens.

Total modern office stock has grown by 65,220 sq m since March 2009 and reached circa 2,215,000 sq m by the end of June. The largest completions this quarter comprise the first phase of Capital Square (22,000 sq m), the final phase of Parkway (12,300 sq m) and Building H in Graphisoft Park (12,000 sq m). In addition to these RiverPark, Szépvölgyi 22, Yacht Business Center and Millenáris Modern & Avantgarde were also delivered.

The vacancy rate has increased by 1.5 pps. from Q1 and 5.4 pps. on the same period last year.  At the end of June 18% of the total office stock was vacant. This is the highest rate registered since March 2004. Although there continues to be significant difference between the rates for individual submarkets, the spread among the lowest and highest rates has narrowed.  The vacancy rate was again the lowest in the Central submarket with 11.7% (8.4% in March) while it was the highest in the Non-Central Pest submarket with 23.4% (24.3% in March).