King Sturge has released its report on the Hungarian Commercial Property Market 2007. The research covers all commercial property sectors detailing rents, land values and investment.
The key findings of the report are:
- GDP growth in 2006 was estimated to be 4.10% however a lower growth of 2.45% is expected in 2007 due to major fiscal reforms. The economy is expected to revert to higher growth levels after these reforms have been implemented.
- The Budapest office market has entered a new development phase, with a large number of class A projects underway. Prime rental levels remained stable over 2006 but could be pushed up in future as demand for office space is increasing.
- Retailer demand remains strong, particularly from the international grocery and retail warehousing operators. The existing shopping centre stock is close to saturation. However, there is now fresh impetus towards new development with key schemes in the pipeline.
- Demand for logistics space has remained the strongest in Budapest. However many manufacturers are being attracted to regional cities, which offer an effective labour force and lower costs. The first half of 2007 has seen a slowdown after a large increase in speculative developments and the expansion of existing logistics parks in 2006.
- The Hungarian investment market has shown a high level of activity over the last few years and although there seems to be a slight cooling recently, it is expected to stay strong. Yields have continued their downward shift; however compression is occurring at a much slower pace than in previous years.
Click here to read the full report.
Source: King Sturge