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News Release


Office assets in the focus of investors

According to JLL’s latest Budapest City Report Q3 2014

The most notable commercial real estate investment transactions emerged from the office sector in Q3 2014. In parallel, vacancy figures are continuously improving on the Budapest office market – reveals Budapest City Report Q3 2014, the quarterly research report of JLL. 

The total transaction volume in Hungary for Q3 2014 amounted to some €158 million with €138 million of investment deals. The most significant transactions attained from the office sector with three recently completed, nearly fully occupied properties acquired, namely Eiffel Palace, the north wing of Vision Towers and Green House.

Benjamin Perez-Ellischewitz, Head of Capital Markets at JLL said: “As a result of the successful sales, we recorded a prime office yield compression of 20 bps from 7.50% to 7.30%, putting the benchmark for offices at its lowest level in the past 6 years.” 
Until Q3, the total year-to-date transaction volume amounted to some €440 million (ca. €368 million of investment deals). This means that the year-to-date volume already shows a 37% growth on full year 2013. “Looking ahead, we expect to see additional large ticket office and industrial transactions during the last quarter of 2014, although the financial closing of these transactions might be postponed to early 2015, resulting in a yearly investment volume of some €550 million” – added Perez-Ellischewitz.  

The remarkable improvement of the office market vacancy rate continued further in Q3 2014. The rate declined by 70 bps quarter-on-quarter and 170 bps year-on-year, dropping to 16.85%. Between January and September 2014, the volume of new supply in Budapest reached 49,395 m2, which is already 64% higher than the total annual new supply in 2013. The year-to-date gross take-up totalled 348,560 m2, which is 43% stronger than the same period of 2013. 

Rita Tuza, Head of Research added the following forecast: “Based on our latest projections, we expect annual gross take-up to be around 450,000 m2 in 2014. The improvement of the vacancy rate should continue during the last quarter of the year as well, but at a somewhat lesser pace than in previous quarters. Therefore, we do not expect it to go below 16%. The volume of annual completions will reach approximately 68,000 m2, more than twice the level in 2013.”