The office vacancy rate has decreased to 7.3%, representing a 0.2 pps reduction quarter-on-quarter - the lowest rate ever recorded on Budapest office market. The Budapest Research Forum published its latest figures.

As a result of large portfolio transactions, the first quarter of 2018 on the Polish real estate investment market closed with a record investment volume of ca. €2.05 billion, according to Savills. Taking into account the number and volume of ongoing transactions, we may expect another very good year on the investment market.

Companies have rented almost 70,000 square meters of office space in Bucharest in Q1 2018, according to JLL. One-third of the demand came from companies that formerly had their headquarters in old, small buildings or in other different from modern buildings (non-competitive stock). This segment of demand increased compared to last year when it accounted for only 7% of the total take-up.

A new report by Colliers International and international law firm CMS has found that one-third of professionals in Central and Eastern Europe (CEE) believe their workplace will change over the next 2-3 years. The firms’ second annual report, ‘CEE Office Real Estate Compass: Is your workplace Millennial-ready’, looks at the changing nature of the workplace in CEE and includes a survey of 72 CEE-based professionals drawn from the spectrum of geography and seniority.

In Q1 2018, industrial space totalling 181,900 sqm was completed across the Czech Republic, but speculative construction accounted only for 2% of all new developments. The Industrial Research Forum announced the preliminary industrial market figures for Q1 2018.

According to “Occupier Economics: Office Market in Łódź in 2017”, the latest report produced by Cresa, last year’s absorption rate for office buildings in Łódź hit a record high of 55,500 sqm. With office stock at 437,770 sqm, Łódź is Poland’s sixth largest regional office market. The city’s vacancy rate currently stands at 9.3% (up by 3.1 p.p. year-on-year).

Despite being late in its cycle, the global real estate market is benefiting from strong returns for investors and a positive global economic outlook, according to Emerging Trends in Real Estate – The Global Outlook for 2018, an annual forecast of global real estate investor sentiment published jointly by PwC and the Urban Land Institute (ULI). The report notes that in this highly competitive, late-cycle property market, the real estate industry must embrace technology, new business models, and the concept of “space as a service”.

Net profit from continuing operations (i.e. excluding Russia) returned to the profit zone with a significant improvement to €181.0 million in 2017 (2016: €-147.4 million). That represents earnings per share of €0.17 (2016: €-0.15). Rental income was slightly higher at €234.5 million (2016: €233.4 million) despite the continuing sale of properties which do not fit in with the corporate strategy. After an adjustment for new acquisitions, completions and sales (like-for-like), rental income grew by a sound 4.5% to €200.0 million (annualised). The results of Asset Management rose by 13.4% to €150.8 million. In total, the results of operations increased by 44.4% to €107.6 million (2016: €74.5 million). Financial results turned substantially positive at €88.8 million (2016: €-107.6 million), above all due to positive valuation effects from the investments in CA Immo and BUWOG and a reduction in financing costs.

Łódź is busy readying itself for an influx of new companies. The city is investing in its road and transport infrastructure as well as revitalizing some of the city's quarters. As a result, Łódź is attracting more investors.These include companies from the rapidly expanding business services sector which are fuelling the expansion of Łódź's office market. New office clusters are being developed throughout the city. In 2018, the city will gain another 45,000 sqm of modern space. However, the business services sector is not the only sector that is powering the city’s economy, according to JLL.

The Central Bank of Hungary (MNB) and the Royal Institution of Chartered Surveyors relaunched the questionnaire-based survey research on Budapest’s commercial real estate market, with the review period of H2 2017. Over the preceding two years the typical rent for commercial properties observed for most property types has increased by more than 15 percent until the end of the second half of 2017. Prime yields for the office market and shopping centres approached the historical minimum observed in 2007 with 10-25 basis points. Most of the survey respondents expect an increase in demand in both the investment and the tenant markets for commercial properties in the next 6 months, however, with regards the development activity, the majority of respondents foresee an unchanged level or a drop in demand for several types of property.