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BRF Budapest office market analysis for Q2 2013

Tuesday, 30 July 2013 09:56

The Budapest Research Forum hereby reports its Q2 2013 office market analysis.

The total Budapest office stock (including owner-occupied and speculative buildings) reached 3,164,224 sq m in the second quarter of 2013. BRF registered one new office handover (‘Váci Greens’) in the Váci Corridor submarket; with this, the total modern office stock comprises 2,594,785 sq m of modern ‘A’- and ‘B’-category speculative office buildings and 569,439 sq m owner-occupied buildings.

The office vacancy rate now stands at 19.9%, indicating an improvement on the same period of 2012, however shows no change regarding the previous quarter. The lowest vacancy rate (14.2%) was measured in the South Buda submarket, whilst the highest vacancy level is still seen in the Periphery region (30.1%).

The total volume of demand reached 74,268 sq m in Q2, which is 22.5% less than in the second quarter of 2012, and is almost the same as it was in the first quarter. Out of this volume, renewals had a share of 37.4% (23,753 sq m), which shows an increase compared to the previous quarter. The volume of new leases and expansions slightly decreased compared to the previous quarter and the same period of 2012, reaching 43,578 sq m, and furthermore, one pre-lease contract was concluded.

BRF registered 156 lease agreements in Q2 2013, with an average deal size of 476 sq m. This size reflects a small increase compared to the previous quarter, however it is 35% lower than it was in the same period of 2012. Almost 80% of the transactions were signed for a volume of ≤ 500 sq m.

There were 16 contracts in Q2 with volumes greater than 1,000 sq m, covering 4 lease extensions, 8 new leases, one expansion, one extension-expansion, one pre-lease and one owner occupation. The largest transaction was a lease renewal in Átrium Park. The largest new lease was signed by Keler Elszámolóház Zrt. moving in R70.

The strongest occupier activity was recorded in the Central Pest submarket, 24% of total transactions was concluded here. The second most active location was the CBD with its 22%, just ahead of Váci Corridor (21.8%).

Source: BRF