Budapest Q4 2011 office market data

Members of the Budapest Research Forum (BRF) include CBRE, Colliers International, Cushman & Wakefield, DTZ, Eston International, GVA Robertson and Jones Lang LaSalle. The Forum has collected all information and now reports its Q4 2011 office market data.

The Budapest office stock increased by 71,225 sq m in Q4 2011 totalling the annual completion level to 87,425 sq m, which is 49% less than results in 2010. The newly completed buildings contributed to the growth of the stock in submarkets of Pest. The following office schemes were handed over in Q4 2011: Laurus Office Building (14,016 sq m), KÖKI Terminál (office size: 6,325 sq m) in the Non-Central Pest submarket, and the two buildings in the Millennium City Center for K&H Bank (50,884 sq m) in Central Pest.
The Budapest office stock totalled 3,158,889 sq m at the end of 2011; including 2,591,806 sq m of ‘A’ and ‘B’ grade modern speculative office accommodation, and 567,083 sq m of owner occupied space.

With 119,729 sq m transacted office space in the fourth quarter leasing activity reached the highest level of the year. BRF registered 135 lease agreements out of which 22 transactions were signed for office space exceeding 1,000 sq m. New transactions accounted for 39% of the leasing activity, while expansions and renewals took 28% and 31% respectively. Two office deals were signed over 15,000 sq m, in Spiral office building and in South Buda Business Park. In terms of submarkets, 43% of the Q4 take-up (51,226 sq m) was signed in Central Pest, where Spiral office building, Rumbach Center and Corvin Offices accounted for 39.100 sq m office take-up. The annual leasing activity reached record level with 397,333 sq m, and surpassed the 2010 figure by 28%. Comparing the last two years’ data the share of new leasing agreements decreased from 48% to 39%, while expansions doubled from 8% to 16%. The share of renewals in 2011 amounted to 38%, 3 percentage points higher than in 2010.

Vacancy rate decreased by 1.5 percentage points in Q4 2011. For the first time in 2 years, vacancy reached a level below 20% and stood at 19.2% by the end of December. Vacancy among the submarkets has also changed; with 15.6% Central Pest took the first place from North-Buda submarket. The Periphery still accounts for the highest vacancy with 32.2%. After a long time net absorption has reached a high level. In Q4 2011 the occupied office space increased by 102,377 sq m compared to Q3 2011.
 

Summary Table:

2011 Q4    Budapest
Completions (sq m)    71,225

    
Speculative Stock (sq m)    2,591,806
Owner Occupied Stock (sq m)    567,083
Total Stock (sq m)    3,158,889
Vacancy (sq m)    607,314
Vacancy Rate (%)    19.2%
Speculative Vacancy Rate (%)    23.4%
      
Speculative Take-up (sq m)    79,940
Owner Occupied Built-to-suit Take-up (sq m)    2,228
Lease Renewal ( sq m)    37,561
Total Leasing Activity (sq m)    119,729
      
Net absorption (sq m)    102,377