Narrowing scope for action for big companies

In 2011 the annual take-up broke the record: leasing agreements were signed for 397,333 sq m. This value is much higher than the yearly average 300,000 sq m of the past years. Due to the outstanding leasing activity vacancy rate has fallen under 20 % for the first time for two years, it stood at 19.2 % at the end of 2011.

The volume of new supply  fell to 50 % compared to 2010: whilst in 2010 the supply increased by 172,564 sq m , in 2011 87,425 sq m were delivered  to the market,  out of which 50,884 sq m  are the towers  in Millenium  Offices built for K& H. 65  % of the remaining office space have already been leased.  In Q4 2011 two large size, larger than 15,000 sq m, transactions were concluded  in office buildings built after 2008.   Since the volume of new supply will decrease and  even lower values can be expected in 2012-13  the tendency  that   large  joint   spaces  are running out seems to intensify.  There  are locations where  in case of requirements above 5,000 sq m no  suitable office buildings  can be found,  and  requirements for smaller  joint spaces  are not sure to be fulfilled  either.  In case of requirements above 5,000 sq m only two buildings handed over after 2008 can be found in Central Buda,  only one building can meet this demand in South Buda,  whilst also only one building is  suitable in Central Business District.

“Since rents stagnate and landlords still provide  a lot of incentives (rent free period,  fit-out contribution)  it is worth looking around in the market until this period,  which is  favourable for tenants, lasts and there are opportunities to choose from.    In addition to location  technical specification, the quality of operation and cost effectiveness are crucial factors for most  –  mainly multinational –  companies which  demand large spaces. Those office builidings built between  2008 and 2011 meeting  all these requirements   have less and less  large joint spaces.  It accounts for only 16 % of the total vacancy.  In my opinion,  with appropriate leasing strategy these  high quality  spaces will soon run out.” adds Róbert Papp,  Director of Office Department at GVA Robertson.

In addition to representing  several other office buildings  Krisztina Palace, which was handed over in 2010, is also part of  GVA Robertson office portfolio.  There was a change in ownership  in the office building in 2011.  The new owner, Union Investment  and the new property manager, AIG Lincoln  together with the leasing consultants have elaborated a new leasing strategy. “We are glad  that we could expand our portfolio with  such and elegant building which meets all the modern technical requirements.   Krisztina Palace is ready to fulfil tenants’ demand for larger office space.  It can provide joint units of several floors.  Spaces can be flexibly fitted out, there are more entrances on each level,  it is suitable both for cellular and open space offices,  moving in can be realized in short time. We are confident that this high quality building with the assistance of our new leasing strategy will be successful. ” comments Zsuzsa Fekete,  leasing director of AIG Lincoln.

Krisztina Palace is located at the foot of the Buda hills on one of the main thoroughfares of the 12th district in Central Buda. The building is 3 minutes walking distance from Déli railway station, one of the largest public transport hubs on the Buda side in terms of metro, trams, trains and bus stops. The building connects easily to the M1/M7 highways (5 minutes by car) towards Vienna and also to the city centre via the Chain Bridge and the Margaret Bridge, which takes about 3 minutes drive from the building. The 12th district is serviced well with shopping malls, fitness clubs, restaurants and hotels that can support the in-house services of Krisztina Palace.  The comfort  of the tenants  is supported  by high  quality  building management, overall security system and a special , environmentally  firendly fan-coil system that reacts to temperature changes whilst opening and closing windows.