After the outstanding good results of the first quarter in 2004 the second quarter of the year saw good but somewhat less occupational activity in the office market. Office take-up in Q2 2004 topped 42,000. Most of the new office lettings were signed in Non-Central area of Budapest.
The total stock in office space rose moderately, with only 20,000 m² of new space entering the market. The total stock figure is currently 1.39 million m², and the expected total new supply will reach 75,000 m² during 2004, with the majority constructed in Central- and Non-Central areas.
Take up of Q2 was 42,000 m² and this represents a 55% increase as compared to Q2 2003. Non-Central location kept its popular position within the market representing 68% of the total take-up.
With the moderate growth in total stock and with the relatively good take-up figure the overall vacancy rate on the office market finally dropped below 18%, showing the lowest figure in the past three years. The vacancy rate is lowest in the popular Non-Central area at 15%.
The industrial market was a tenant’s market in the first quarter, and this helped a number of considerable transactions to be concluded leading to 44,000 m² of take-up. Total stock grew by nearly 60,000 m² over the last six months, reaching over 500,000 m². Due to increased take-up and caution from developers the industrial vacancy rate fell below 5%.
In terms of investment activity the real estate market has been eventful in the first half of 2004, with some 10 major office projects completed, under offer or in another phase of the selling process. Investor demand is expected to exceed supply in the second half of the year.