The total modern office stock currently adds up to 4,377,170 sqm, consisting of 3,560,590 sqm of ‘A’ and ‘B’ category speculative office space as well as 816,580 sqm of owner-occupied office space. During the stock revision and size corrections at the beginning of the year, the office stock was reduced by 19,180 sqm; two buildings were transferred to the owner-occupied office stock additionally two buildings were removed and two schemes were added to the Budapest office stock.

In the first quarter of 2024, two office buildings were delivered to the Budapest office market with a total of 26,440 sqm. Millennium Gardens South (Phase 2) was handed over in Central Pest submarket, while the owner- occupied Knorr-Bremse R&D Center was completed in South Buda submarket.

Total demand reached 94,980 sqm in Q1 2024 reflecting a 24% increase year-on-year.
Renewals accounted for the largest share of total leasing activity with 53%, followed by new leases with a share of 36%. Expansions took up 9% while owner-occupied deals took up 2% of the total demand.

Net take-up (excl. renewals) reached 42,270 sqm in the first quarter of the year, showing a 25% growth compared to the same period of 2023.

The office vacancy rate increased to 13.8%, representing a 0.4 pps growth quarter-on-quarter and 1.5 pps increase year-on-year. The lowest vacancy was registered in North
Buda with a vacancy rate of 8.4%, whereas the highest vacancy rate remained in the Periphery submarket (33.3%).

There was no net absorption (corrected with size changes) in the first quarter of 2024.

The strongest occupational activity was recorded on the Váci Corridor, attracting 29% of the total demand, and it was followed by CBD submarket reaching 21%.

According to BRF, 153 lease agreements were concluded in Q1 2024 and the average deal size amounted to 621 sqm, reflecting a 27% decrease in average deal size
quarter-on-quarter. BRF registered five transactions concluded on more than 3,000 sqm office space, including four renewals and one new lease. The largest
transactions in the quarter were in Váci Corridor and in CBD submarket.

BRF