"According to global real estate consultant Cushman & Wakefield, the total volume of office transactions set a new record with more than 300,000 sqm take-up in the Budapest market during 2007, which shows a 20 % increase compared to previous year totalling almost 250,000 sqm.The yearly take-up consists of not only new transactions on the market, but also includes expansion and renegotiation deals. New transactions were counting for about 60-70% of the total take-up.
* Record amount 300,000 sqm take-up in Budapest
* Largest deals by IT/electronic companies and state run agencies
*Váci street is the most popular office location
Zsuzsa Fekete, Head of Office Agency at Cushman & Wakefield stated: "2007 was a record year for the office market in Budapest, as well as for Cushman & Wakefield, which advised in 16 percent of all office lease transactions in 2007."
Key occupiers on the Budapest office market continued to be multinational companies, such as IBM, Citibank and Morgan Stanley, however there was a sharp increase of state owned agencies such as Magyar Posta, taking space in modern Category-A office buildings throughout Budapest during 2007.
Váci út corridor
The most active sub-market was the Váci út corridor. The total take-up on the Váci út corridor was approximately 90,000 sqm, which is 63 percent increase compared to 2006, when the take-up totalled 55,000 sqm. One of the most active business sectors on the Váci út corridor were the shared service centers. A number of new service centers have decided to locate its operations on the main business corridor of Budapest, while others have extended their lease. Some of the key shared service center transactions were Diageo in West End Business Center, Inbev and IBM in Duna Tower and Celanese Corporation in Váci 33. Another active business sector on the Váci út were state owned companies and agencies. Some of the larger transactions were ESZA in Atrium Park and Magyar Posta in Gateway.
Váci út is still considered as a favourable location for both new and existing tenants due to the excellent public transport connection (Metro 3), amenities and availability of space.
South Budapest
2007 saw increased activity in South Budapest (district 9 and 11). South Budapest is one of the up and coming submarkets in Budapest due to the general availability of land in this location.
In total 60,000 sqm new office space was completed during 2007. The total take-up for South Budapest for 2007 was approximately 74,000 sqm, which shows 42 percent increase from 2006, when the take-up totalled 52,000 sqm.
Some of the key transactions in South Budapest were T-Online and DBH in Infopark D, Philips in IP West, Nokia in Studium and a major electronics supplier is City Gate II and III. With the construction of Metro 4 due to be completed by 2010, the area in general should see a continued high level of interest from local and international occupiers.
Central Business District
The take-up in the CBD slightly increased to 30,000 sqm in 2007 (23,000 sqm take-up in 2006), which is mainly due to the lack of new stock in the CBD.
Periphery (Budaörs)
The periphery saw a drastic increase of take-up from 5,000 sqm in 2006 to 19,000 sqm - mainly renewal deals for Pannon, Invitel, Capgemini and Johnson & Johnson in 2007.
Market trends 2008
Fekete adds "Looking forward to 2008 we expect continued healthy level of activity from local and international tenants on the market as well as continued developer activity. In 2008 we expect approximately 360,000 sqm new stock to come on the market, which might lead to slightly higher vacancy rates in specific sub-markets."
Source: Cushman & Wakefield
24.01.2008