News Article Growing number of new retailers enter Budapest
by Ákos Budai | Retail

Impressive turnover growth, increasing retailer demand and lack of new supply push rents up in Budapest retail market according to the new Hungarian Retail Market Report of CBRE global property advisor.


Impressive turnover growth, increasing retailer demand and lack of new supply push rents up in Budapest retail market according to the new Hungarian Retail Market Report of CBRE global property advisor.

New retail supply has reached historic lows in recent years. Since 2012 less than 50,000 sq m of new retail space has been delivered in Hungary. The entire modern retail stock in Hungary - including retail warehouses but not high-street - amounts to 3.6M sq m. Half of this volume is concentrated in Greater Budapest, while 27% is located in cities with populations over 100,000. Only 25% of the stock is located in other cities.

Retail sales in Hungary have grown by 6.1% y-o-y in H1 2015 - a clear acceleration compared to previous years. Similarly high levels were last measured in 2006. The Hungarian retail sales growth is in line with the general trend in CEE. The average CEE growth rate significantly exceeds the average level of the EU-28 (+2.8%) and the Eurozone (+2.2%).

New retailers

CBRE has registered a growing number of new retailers on the Hungarian market. Thirteen brands have already entered or are scheduled to enter this year, up from six newly arrived brands in 2014. New retailers target prime high-street locations and prime shopping centres in Budapest. Most of them are fashion and homeware retailers. Italian and CEE brands were the most active.

Beside international retailers, numerous new Hungarian brands - mainly start-up fashion brands and food retailers - have also appeared on the market. “Just on Andrássy út 8 new branded shops will open in 2015, amongst them J.Press, Michal Negrin, O’bag and Michael Kors, Polo Ralph Lauren and COS coming by late October", Anita Csörgő Head of Retail at CBRE Budapest said.

Rents

Rental levels have increased across all market segments in H1 2015. The largest increase could be witnessed among Budapest high-street retail units, where typical rents are now in the range of EUR 60-100/sq m/month for a 200 sq m unit. Demand for units in areas with high tourist footfall has risen in some regional cities as well as Budapest’s downtown shopping areas. Prime shopping centres’ rental rates in Budapest are quoted between EUR 50-80 /sq m/month, also above last year’s level. The best shopping centres in regional cities have experienced remarkable growth of up to 25% y-o-y.