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News Release

Budapest

Tenants search for high quality office space in Budapest

Gross take-up up by 12% compared to Q1 2014


Budapest, June 17, 2015 – Continuously decreasing vacancy rate and increasing occupier activity is registered on the Budapest office market – according to JLL’s recently published Q1 2015 Budapest City Report. 

There was no new office completion during the first quarter, the modern office stock stagnated on 3,230,086 sq m. Vacancy rate has been decreasing for the fifth consecutive quarters; down by 50 bps compared to the previous quarter and 277 bps compared to the corresponding period of the last year to 15.7%. There are significant differences between the submarkets’ vacancy rate; the highest was registered in the Periphery (32.6%) whilst the lowest was recorded in Buda South (10.2%).

Occupier activity has improved significantly compared to Q1 2014; gross take-up increased by 12% to 64,010 sq m whereas net take-up was up by 17% to 43,360 sq m. Net absorption nearly doubled  compared to Q1 2014, reaching 13,960 sq m. 

Prime rents are stable at 20 EUR/sq m/month however, this rental level can only be achieved in a few centrally located prime office buildings. Effective rents are unchanged in the Grade „A” office buildings between 11-14 EUR/sq m/month and major rental incentives are still available. 
In 2015, less than 30,000 sq m of office space will be delivered, however, in 2016, the volume of development activity is expected to be higher with nearly 90,000 sq m of new office space.

"The tenant market has become extremely active. The driver of property related decisions of large companies is still portfolio rationalization, while tenants with smaller space requirements aim to reach a qualitative change in terms of the location or the technical parameters of the building. According to our forecasts, 2015 will be about preleases and a large number of rental transactions will be signed” - added Rita Tuza, Head of Research at JLL Budapest.