Despite a raft of recent negative news on eastern European economies, Jones Lang LaSalle's new report launched at MIPIM 'Onshore, Nearshore, Offshore: Unsure? A Central European Perspective', provides a welcome positive view to occupiers by outlining the attractiveness of Hungary and CEE markets towards landlords or tenants over the next three years.
On average, Budapest, Bucharest, Prague and Warsaw offer a mixture of relatively balanced market conditions and tenant favorable conditions. Budapest and Warsaw are particularly favorable towards tenants; the first over 2009/2010 and the second in 2010 and 2011, characterized by falling rents and increasing vacancy rates.
Bucharest and Prague are also set to be favorable in 2010; Bucharest is forecast to switch to favor the landlord more in 2012 and the rest of the three year period Jones Lang LaSalle predicts conditions in all of the cities to remain relatively balanced between landlord and tenant market conditions.
While there is variance in the precise balance of drivers and influential factors shaping business location decisions, four key drivers economic and political, lab our, real estate and infrastructure, and business environment are elements that, when carefully evaluated, can present tremendous opportunities but, conversely, can expose occupiers to potential risks.
Thierry Delvaux, Managing Director of Jones Lang LaSalle Hungary commented: "Budapest has a strong and proven track record as a Shared Service Centre and Business Process Outsourcing destination and has become one of the most favored locations in Europe for the provision of these services. Despite the global economic downturn Hungary will continue to attract corporate investment mainly due to its highly educated, multilingual labor pool which is available on lower labor costs than most of the European countries. The Budapest office market will continue to offer well located, high quality real estate to accommodate further growth in these sectors. Real estate developers active in the CEE region understand the constantly changing needs of occupiers and are providing modern, flexible, high-specification properties at highly competitive prices."
John Duckworth, Managing Director of the CEE region concluded: "Businesses are increasingly finding that shoring strategies are critical for improving their bottom lines. Our conclusion is that the CEE region has become a highly competitive location on a global scale for corporates, when making their strategic Business Product Outsourcing and Shared Service Centre decisions. With continued development in the region, combined with clear advantages around cost, labor and risk, we believe this trend is set to accelerate".
Source: JLL
