Rents in the Budapest office sector are on the rise, according to Cushman & Wakefield, which has closed multiple deals on the local market in recent weeks. Despite the city’s limited supply of new class A office space, vacancy rates are now at 14.2 percent. However, this is the first time Budapest has outpaced Prague, its main competitor in the region.
“The Budapest office market continued its rally in the first half of 2015: take-up levels reached 280,000 sqm, of which Q2 alone has seen 213,500 sqm. This is the highest quarterly figure on record,” said Orsolya Hegedus, Associate, head of research at Cushman & Wakefield Budapest. “The high activity was supported by a few significant deals, such as the T-Com’s pre-lease of 55,000 sqm.”
The outlook for the remainder of the year remains positive. “As demand continues to outstrip supply, the vacancy rate in Budapest will continue to fall further resulting in tenant incentives to continue to shorten for the best space,” said Hegedus. “We expect this will increase the possibility of positive rental growth in the very short term in the most preferred submarkets of large occupiers and will pave the way for speculative construction.”
