The vacancy rate has increased for the first time in two years on the Budapest office market in Q3 2016. Still, net absorption reached a positive volume, reflecting a healthy market environment. The Budapest Research Forum has published its quarterly office market analysis.
After nine consecutive quarters of decline, the office vacancy rate increased slightly by 0.6 pps quarter-on-quarter reaching 10.9%. The growth of the rate was related to the volume of new supply in the third quarter. Still, net absorption reached a positive volume, reflecting a healthy market environment. Similarly to previous quarters, the lowest vacancy rate (4.7%) was measured in the South Buda submarket, whereas the Periphery region suffered from a 35.7% vacancy rate.
Demand in the third quarter of 2016 reached 95,230 sqm, which was nearly in line with the volume of the corresponding period of 2015, but showed a 26% decline quarter-on-quarter. Out of the total leasing activity, renewals had a share of 41%, new transactions represented 37%, expansions accounted for 18% whereas pre-leases for 4%. No owner-occupied and BTS transactions were registered in the third quarter.
The largest transactions of the third quarter were two renewals on 11,750 sqm and 5,300 sqm, both signed in the Váci Corridor submarket. The largest new transaction was signed for a 3,900 sqm office space in the CBD.
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