The vacancy rate in the office market has further increased
The Budapest Real Estate Advisors’ Coordinating Forum has released its summary for the first quarter of 2024 concerning the office market. The total modern office stock in Budapest currently stands at 4,377,170 square meters, within which 3,560,590 square meters are “A” and “B” category modern speculative office space, and 816,580 square meters are self-owned office buildings. Net demand amounted to 42,270 square meters, showing a 25% increase compared to the first quarter of 2023. The vacancy rate reached 13.8%, with an increase in stock of 26,440 square meters.
In the first quarter of 2024, the Budapest modern office stock expanded by two new office buildings, totaling 26,440 square meters. The Millennium Gardens South (Phase 2), built for speculative purposes, is located in Pest Central Market, while the Knorr-Bremse R&D center for own use was delivered in South Buda.
Gross demand in the first quarter of 2024 amounted to 94,980 square meters, representing a 24% increase compared to the same period of the previous year. Within total demand, contract extensions accounted for the largest share with 53%. New contracts represented 36% of leases, expansions accounted for 9%, and the share of purchases for own use reached 2%.
Net demand (transactions without contract extensions) amounted to 42,270 square meters during the same period, showing a 25% increase compared to the first quarter of 2023. The vacancy rate reached 13.8% in the first quarter of 2024. The vacancy rate increased by 0.4 percentage points compared to the previous quarter and by 1.5 percentage points compared to the same period of the previous year.
In the first quarter of 2024, the lowest vacancy rate was registered in North Buda (8.4%), while the highest rate, unchanged, was in the Agglomeration (33.3%). There was no net absorption (adjusted for size changes) during the first quarter.
The highest tenant activity was still measured on the Váci út office corridor, capturing 29% of the total volume. Following Váci út, the second-highest activity was recorded in Downtown, where 21% of transactions were concluded. Overall, the Budapest Real Estate Forum registered 153 lease agreements during the first quarter, with an average size of 621 square meters, representing a 27% decrease in average transaction size compared to the previous quarter.
Five contracts were signed for areas larger than 3,000 square meters, four of which were extensions and one was a new contract. The largest transactions of the quarter took place on the Váci út office corridor and in Downtown.
Source: realista.ingatlan.com
