Despite a rise in office vacancies, high-quality spaces continue to appreciate, and tenants looking to relocate can secure new deals on favorable terms, according to Zsolt Kákosy, Icon’s property management director.

Vacancy Rates on the Rise, but Demand Persists for Prime Locations

The Budapest office market currently has a vacancy rate of 13.9% across its 4.4 million square meters of office space, marking a 0.6% increase over the past six months, according to the latest data from the Hungarian National Bank. With demand levels seen in recent quarters and additional new space scheduled for delivery, vacancy rates are expected to rise further.

At the same time, contract renewals have accounted for 46% of all agreements signed nationwide in the most recent period—well above the six-year average of 39% between 2018 and 2023.

However, ICON argues that this high renewal rate is not driven by financial constraints preventing companies from upgrading or relocating but rather by businesses choosing to wait out market uncertainties.

“Those who want to move now can get a new deal on great terms.  It is common experience that really good areas are appreciating. People are already lining up for the most modern, best located, and most serviced offices,” says Zsolt Kákosy.

What Tenants Value Most in Office Spaces

A comprehensive B2B survey conducted by independent market research institute NRC among decision-makers leasing Icon-managed office buildings highlighted key factors influencing office selection. The top priorities for tenants include accessibility by public transport, car, and bike; cleaning quality; air quality; and the professionalism of reception staff.

Additionally, heating and cooling control - a frequent concern in shared workspaces - ranked high on the list of tenant expectations.

“At Icon, we make it a priority to listen to our tenants – and we offer this to everyone. As an employer, it’s worth assessing the needs of employees before moving, to see what aspects they should be looking at when choosing a new office,” Kákosy added.

With the office space increasingly serving as a tool for talent attraction and employee satisfaction, decision-makers are encouraged to carefully consider their options.

Understanding workplace needs and remaining open to emerging opportunities could make all the difference in securing an office space that aligns with both business goals and employee expectations.

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