- 14 Apr 2020 8:38 AM
- Budapest Business Journal
The overall vacancy rate has fallen to a record low of about 5% from 8% in 2015 according to JLL. Total leasing demand for 2019 amounted to 637,00 sqm, which is the highest annual volume on record, annual take-up has been rising since 2016.
The Budapest office market has a potential pipeline of more than 570,000 sqm. Cushman & Wakefield have traced what it sees as record high demand at 630,000 sqm for 2019 with a record low overall vacancy of 5.5%. The consultancy forecast an improved pipeline of 230,000 sqm for 2020, although much of this space will be absorbed by the time of delivery.
CPI has delivered the 15,500 sqm Balance Hall in the Váci Corridor. This third phase of Balance Office Park on Váci út brings the total space at the complex to 35,000 sqm; there still remains the possibility for a fourth phase of the development.
JLL has traced 14 office projects that are due to be delivered this year, the largest of which is the 34,500 sqm Agora Hub and the 34,000 sqm Agora Tower, collectively representing the first phase of the 136,000 sqm Agora Budapest project.
CBRE put the supply expectation for the year at 265,00 sqm, which would represent a new high in this cycle.
“However, further development delays are likely and hence some of the 2020 pipeline is expected to shift [back to ] later. In terms of leasing status, the volume currently scheduled for handover in 2020 is currently 70% committed,” says Anikó Kovács, head of office advisory and transactions at CBRE Hungary.
For 2021, JLL has traced 280,00 sqm of new supply or soace under construction, of which 160,00 sqm is already let.
“Delays could occur towards to the end of the year as well, but it is still early to accurately judge the likelihood of projects pushing into 2021,” Kovács adds.
“The new supply currently scheduled for 2021 amounts to 211,000 sqm, all of which is currently under construction, while the new supply expectations for 2022 is circa 280,000 sqm, though the vast majority of the latter volume is still in the planning phase and is, therefore, at risk of kick-off delays in addition to the actual timeline dragging out,” she explains.