Total demand on Budapest’s office market reached 81,500 sqm in Q3 2021, representing a 17% decrease quarter-on-quarter, but a 3% increase year-on-year. New leases overpowered regarding the share of total leasing activity with 60%, reveals fresh data by the Budapest Research Forum.
The total modern office stock currently adds up to 3,955,600 sqm, consisting of 3,309,000 sqm Class A and B speculative office space as well as 646,600 sqm of owner-occupied space.
In the third quarter of 2021, there was no new supply delivered on the Budapest office market. During this quarter 7,100 sqm were moved from the speculative to the owner-occupied space, consisting of two office buildings.
The office vacancy rate decreased to 9.1%, representing a 0.7 pps decrease quarter-on-quarter and a 1.0 pps increase year-on-year. In line with the preceding quarters, the most occupied submarket was North Buda with a 4.6% vacancy rate whereas the highest vacancy rate remained in the Periphery (31.8%).
Net absorption rebounded to positive territory during the quarter, as the total occupied stock increased by 29,300 sqm.
Total demand reached 81,500 sqm in Q3 2021, representing a 17% decrease quarter-on-quarter, but a 3% increase year-on-year. New leases overpowered regarding the share of total leasing activity with 60%, followed by renewals in the existing stock with 22%, pre-leases in new developments amounted to 11%, while expansions of existing premises reached 7% of the total demand.
The strongest occupational activity was recorded in the Non-Central Pest and Váci Corridor submarket, attracting 22% and 21% of the total demand. The Central Pest and South Buda submarkets attracted 18% and 14% of the transactions, and 10% of the total demand was realised in the CBD submarket.
According to the BRF, 146 lease agreements were concluded in Q3 2021; the average deal size amounted to 560 sqm. The BRF registered seven transactions concluded on more than 2,000 sqm office space, including five new leases, one renewal and one pre-lease.
The largest new agreement was signed for a total of 4,300 sqm in BudaPart City office buildings, while the largest renewal was a 3,800 sqm deal in Terra Park C.
The Q3 2021 office market statistics continued to reflect the uncertainties and economic slowdown triggered by the COVID-19 pandemic. While quarterly demand remained somewhat weaker than in previous years, the gap narrowed as the number of transactions showed recovery and the vacancy rate slowly begins to decrease.
The Budapest Research Forum (BRF) comprises CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary.
