Budapest City Report Q2 2020

Despite of the COVID-related uncertainties on the markets, investment activity was strong during the first half of 2020. Domestic buyers remained the most active buyers, the most active asset class in H1 2020 was offices. Although investors remained active during the lock-down period, sellers were cautious and decided to defer marketing processes which in a lot of cases will push the transaction closings toward 2021.

In Q2 2020, five new completions have been delivered to the Budapest office market, prime rent remained unchanged, total leasing activity decreased considerably and renewals added up to 46% of the total demand.

Regarding retail market, despite of the restrictions, overall retail sales in Hungary increased 1.5 percent year-on-year between January and May, helped by the gradual easing of the country's lockdown. Convenience centres and shopping centres anchored by food operators experienced smaller decreases in footfall compared to fashion-anchored centres. After the reopening of offices, consumption is growing, bringing large shopping centres back to life. By mid-July, around 80% of customers returned.

In term of industrial properties, Q2 2020 market statistics did not reflect the current economic restrictions triggered by the pandemic. Renewals accounted for 45% of the H1 volume, followed by new leases with a share of 35%.

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