Lease renewals dominate the office and industrial leasing markets in Budapest

Category: News
Publication date: 22 August 2013
Lease renewals dominate the office and industrial leasing markets in Budapest

The leasing activity in Budapest was mainly dominated by lease renewals and subdued development activity throughout 2012. Only 22,950 sq m of new office building was completed in 2012 but 2013 is expected to see even lower volume as only one building is planned to be completed with 15,500 sq m. Vacancy rate has somewhat decreased but the annual volume of net absorption became negative, therefore the year end vacancy rate was still 176 bps higher, than in the same period of 2011 (19.2%).

The drop back of occupier activity was clearly reflected in the annual demand figures. In line with our forecast, the annual volume of total leasing activity reached only 344,980 sq m, which was 13% less than the recorded volume of 2011 (395,000 sq m). More than 50% of the annual take-up volume was lease renewals which is significantly higher, than the last year’s ratio of 38%. 

Low development activity remains for the immediate future as there are only three office buildings under construction with 58,100 sq m total volume due to be delivered by 2014. No major recovery is expected in terms of occupier activity for 2013 either. Renewals and renegotiations will remain the main drivers of demand and are expected to reach similar levels to those in 2012.
Similarly to the office market, volume of new supply on the industrial market was also extremely low; only 16,450 sq m was delivered. However the majority of the new supply was pre-leased, vacancy rate increased q-o-q to 19.4%. 
As the annual volume of net absorption reached a positive figure, this rate was still 155 bps lower than in the same period of 2011 (20.9%). The annual total leasing activity equalled 354,740 sq m, which was 8% higher than in 2011. Renewals represented nearly 63% (222.200 sq m).
Send url this page to your friend:
Friend email:
Your e-mail:
Recently added
Tulipan Park is located on the western outskirts ...
South Base is a newly built modern logistics ...
The Nagytétényi Industrial Park is a newly built ...

1054 Budapest
Szabadság tér 14.
+36 1 489 02 02
Fax +36 1 489 02 03