No new office buildings were completed in Q2 2017. The total Budapest office stock totalled 3,346,735 sq m. The total stock comprises 2,682,155 sq m of Category ‘A’ and ‘B’ speculative, and 664,580 sq m of owner occupied buildings.

Vacancy rate has continued to decrease by 0.6 pps quarter-on-quarter to 8.6%, which is the lowest rate ever on record. The lowest vacancy rate is still recorded on the South Buda submarket (3.1%), whilst the Periphery submarket registered again the highest figure (33.1%).

Demand in Q2 2017 increased by 47% compared to the previous quarter, comprising 98,730  sq m.

Renewals were the major driver of the leasing activity with 38.5% share. In the second quarter of 2017 new lease agreements were represented by 32.9%, expansions accounted to 9.9%. Pre-leases showed a higher share compared to previous periods with 18.8%. There was no owner occupation registered during the period.

According to BRF, 178 deals were closed in Q2 2017, with an average size of 555 sq m.
In terms of submarkets, Váci Corridor had the highest leasing activity, representing more than 34% of the total demand, followed by South Buda (25%) and Central Buda (13%) submarkets.

The largest deal of the quarter was a renewal in Infopark D office building for more than 7,000 sq m. This was followed by a renewal in Átrium Park for 6,710 sq m. The largest pre-lease was signed in Office Garden III, extending to over 4,630 sq m.

The quarterly net absorption totalled 19,265 sq m in Q2 2017.

BRF