The total modern office stock currently adds up to 4,369,900 sqm, consisting of 3,571,710 sqm of ‘A’ and ‘B’ category speculative office space as well as 798,190 sqm of owner-occupied office space. In the fourth quarter of 2023, one office building was delivered to the Budapest office market with the total of 25,320 sqm. BEM Center was handed over on Central Buda submarket. In total, 102,835 sqm of new office space was handed over in 2023.

Total demand reached 131,315 sqm in Q4 2023, which reflected a 4% decrease quarter-on-quarter, and a 29% increase year-on-year. Renewals accounted for the largest share of total leasing activity with 52%, followed by new leases with a share of 43%. Expansions took up 2% while pre-leases took out 3% of the total demand. In Q4, three larger sublease contracts were registered and added to the total demand. Total demand in 2023 amounted to 464,570 sqm, while net take-up reached 238,250 sqm in the same period. Total demand increased by 19%, while net take-up showed a 21% growth compared to 2022.

The office vacancy rate increased to 13.5%, representing a 0.3 pps growth quarter-on-quarter and 2.2 pps increase year-on-year. The lowest vacancy was registered in North Buda with a vacancy rate of 8.7%, whereas the highest vacancy rate remained in the Periphery submarket (36.8%). Net absorption turned to positive range in the fourth quarter of 2023, meaning that the size of occupied areas increased by 6,590 sqm.

The strongest occupational activity was recorded on the Váci Corridor, attracting 28% of the total demand, and it was followed by Central Pest submarket reaching 20%. According to BRF, 155 lease agreements were concluded in Q4 2023 and the average deal size amounted to 847 sqm, reflecting a 3% decrease 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 transactions of the quarter were lease renewals, one in myhive Átrium Park for 12,390 sqm and one in Mill Park for more than 7,000 sqm.

Source: BRF