The total modern office stock currently adds up to 4,344,580 sqm, consisting of 3,546,390 sqm of ‘A’ and ‘B’ category speculative office space as well as 798,190 sqm of owner-occupied office space.
In the third quarter of 2023, two new office buildings were delivered to the Budapest office market with the total of 13,460 sqm. South wing of Liberty Offices (9,720 sqm) on Non-Central Pest submarket, and HomeWork (3,740 sqm) on Central Buda submarket were handed over. Moreover, one office building in the CBD with a total of 3,755 sqm was excluded from the office stock due to its change in profile, it will not be utilized as an office building.
Total demand reached 136,700 sqm in Q3 2023, which reflected a 14% growth quarter-on-quarter, and a 35% increase year-on-year.
New leases accounted for the largest share of total leasing activity with 49%, followed by lease renewals with a share of 45%. Expansions and pre-leases each took up 3% of the total demand. In Q3, two larger sublease contracts were registered and added to the total demand.
Total demand in 2023 amounted to 333,255 sqm, while net take-up reached 174,630 sqm in the same period.
Total demand increased by 15%, while net take-up showed a 22% growth compared to the same period of 2022.
The office vacancy rate increased to 13.2%, representing a 0.6 pps growth quarter-on-quarter and 2.2 pps increase year-on-year. The lowest vacancy was registered in Central Buda with a vacancy rate of 7.3%, whereas the highest vacancy rate remained in the Periphery submarket (36.9%).
Net absorption turned to negative range in the third quarter of 2023, meaning that the size of occupied areas decreased by 12,865 sqm.
The strongest occupational activity was recorded on the Váci Corridor, attracting 27% of the total demand. It was followed by Non-Central Pest submarket reaching 16% of the total demand.
According to BRF, 157 lease agreements were concluded in Q3 2023 and the average deal size amounted to 871 sqm, reflecting a 18% growth in deal size quarter-on-quarter BRF registered four transactions concluded on more than 5,000 sqm office space, including two renewals, two new leases.
The largest transaction of the quarter was a lease renewal in GTC Metro, while the second largest transaction was a new lease agreement, concluded in Magyar Telekom HQ for more than 10,000 sqm.
BRF
