Elemzések

Market report 2017 H1 Investment

Stable growth

Hungarian economy produced a strong growth of 3.7% in the first half of 2017 compared to last year (when the growth was at 1.7% in the same period). The volume of investments grew significantly compared to the low base rate (by 34%); growth could be observed in every area of the economy, investments in the construction industry grew by 49%. Industrial output grew by 5.6% in comparison with the January-June period last year, whereas construction industry grew by an even bigger (27%) rate. Construction of residential properties increased by 46% in the first six months (compared to last year). The number of building permits and simple notifications has increased by 40% in Hungary, and it has doubled in Budapest. As a result of the easement of building permits and the state subsidies (CSOK –state subsidy provided for families, reduced VAT) provided for residential properties the strong increase in building residential properties is likely to continue in the following year.  Costs of constructions showed continuous increase in the examined period, prices increased by 8% in the second quarter in comparison with the same quarter last year.

Retail trade continued to expand: the rate of growth was 3.9% in the January-June period compared to the previous year (in 2016 it was 5.3%). Consumer prices grew by 2.3% in the first six months compared to last year, while the rate of annual growth was 1.9%. The biggest rate of inflation could be seen in case of alcoholic drinks and tobacco products.

Unemployment rate dropped below 5% (4.3), in addition employment rate increased to 68.1%. There is a big difference regionally in the unemployment rate, there is a shortage of labour at the more significant industrial areas. The National Bank has not modified the base rate since the middle of 2016, it stands at 0.9% at present.

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Market report 2017 H1 Modern Offices

Calm before the storm

There was a significant decrease in the growth of supply in the first half of 2017 compared to last year’s data, with only one new building being handed over (Graphisoft Park, 5,500 sqm). On the basis of current data developers’ activity is going to be more moderate compared to the year of 2016 and to previous expectations.

Ongoing property developments make up around 400 square metre office space, the major part of which (316 thousand square metre) is expected to be handed over only in 2018. Two hotspots of property development are the office corridor on Váci Street and sub market in south Buda. The dominance of Váci Street is expected to continue its growth in the near future, the size of handed over modern office stock of the region is going to surpass one million square metres by the end of next year. In the south Buda submarket, which with 3% has the lowest vacancy rate, completion of new offices (over 110 thousand square metres) can be expected a year later, in 2019.

The two biggest handovers in the second half of this year are going to take place in the south Buda submarket (Office Garden 3 and Hungarian Nobel prize winners Research and Development Park I); 42 thousand square meters of office space are going to be handed over in the two office buildings, which account for more than half of the annual growth in demand.

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Market report 2017 H1 Industrial and logistics properties

Dynamically expanding developments

In the first six months of 2017 properties of about 49 thousand square metres were handed over, which is twice as much as the volume of handovers in the same period last year. The annual rate of expanse in supply is going to be higher than it was last year. About 101 thousand square metres of developments are expected to be completed until the end of the year, which indicates a 40% growth in comparison with last year. Since the empty areas are becoming scarce, developers’ activity is expected to be on the increase, while supply is going to exceed two million square metres.

The biggest volume construction works are taking place in the western suburbia, in Inpark Páty. The 23 thousand square metre investment is carried out by NIPÜF Zrt., which is owned by the state but is an active market player. The company focuses on developing properties in accordance with domestic and international clients’ demands.

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Office market report Q3 2017

ESTON International hereby reports The Budapest Research Forum’s Q3 2017 office market summary.

Two new office buildings were completed in Q3 2017; Graphisoft Park Start-up building was handed over on 2,500 sq m in North Buda, while Nexon’s 4,000 sq m owner occupied headquarter was handed over on the Váci Corridor submarket. The total Budapest office stock totalled 3,353,235 sq m. The total stock comprises 2,684,655 sq m of Category ‘A’ and ‘B’ speculative, and 668,580 sq m of owner occupied buildings.

Vacancy rate has continued to decrease by 1.0 pps quarter-on-quarter to 7.6%, which is the lowest rate ever on record. The lowest vacancy rate is still recorded on the South Buda submarket (3.3%), whilst the Periphery submarket registered again the highest figure (28.5%).

Demand in Q3 2017 increased by 67% compared to the previous quarter, comprising 164,985 sq m. Owner occupation deals represented the highest share of the demand in the third quarter with 32.7% share, followed by new deals with 27.6%. Renewals equated 24.8%, while expansions accounted for 6.4%. Share of pre-lease agreements represented 8.3% of the total leasing activity.

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Industrial property market report Q2 2017

ESTON International hereby reports The Budapest Research Forum’s Q2 2017 industrial market snapshot.

In the second quarter of 2017, two buildings were added to the industrial stock with a total size of 20,380 sq m. A new 8,790 sq m warehouse was delivered at BILK Logistics Park, whilst the BRF included M7 Dunaharaszti – an existing 11,590 sq m warehouse to the Greater Budapest industrial stock.

The total modern industrial stock in Budapest, and its surroundings, stands at 1,953,790 sq m as of the end of Q2 2017.

Total demand amounted to 212,750 sq m in Q2 2017, which is the highest quarterly volume on record. Renewals accounted for 75% of the total take-up, while the share of new lease agreements amounted to 19% of the total take-up. Two pre-leases were signed during the quarter, totalling 10,980 sq m and represented 5% of the total take-up, whilst the remaining 1% was generated by expansions.

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Office market report Q2 2017

ESTON International hereby reports The Budapest Research Forum’s Q2 2017 office market summary.

No new office buildings were completed in Q2 2017. The total Budapest office stock totalled 3,346,735 sq m. The total stock comprises 2,682,155 sq m of Category ‘A’ and ‘B’ speculative, and 664,580 sq m of owner occupied buildings.

Vacancy rate has continued to decrease by 0.6 pps quarter-on-quarter to 8.6%, which is the lowest rate ever on record. The lowest vacancy rate is still recorded on the South Buda submarket (3.1%), whilst the Periphery submarket registered again the highest figure (33.1%).

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Market report 2016 – Industrial and Logistic Properties

Developments launch

71 thousand square meters of new industrial/logistics premises were handed over in 2016; this amount exceeds the sum of all new deliveries from the previous five years. As vacant spaces ran out the intensifying of construction activity is foreseen; however, annual volume of new supply is not expected to return to the formerly usual levels of 150-200 thousand square meters.

Several pre-let and BTS halls are expected to come to the market in 2018; majority of these are located in the southern sector of the M0 ring road.

Developers’ interest is rising in launching new (partially) speculative projects. New developments are primarily realized in the southern-Budapest agglomeration.

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Market report 2016 – Investment

2016 brought an outstanding growth in property investment volume; the sum of deals doubled comparing to 2015 as it approached 1.55 billion euros. This is the second largest amount ever recorded in the Hungarian market.

High quality office buildings continue to be the most wanted; several such properties were sold over EUR 50 million. German investors are active in this segment again; additionally, domestic real estate funds successfully closed many valuable deals as well. The upcoming scarcity of premium offices became apparent by the end of 2016. According to the expectations forward purchase agreements will return to the market.

Domestic real estate funds still have a great appetite int he EUR 30-50 million price range; the Diófa Fund Manager and the Erste Real Estate Fund were active buyers, just as they had been in the previous year.

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Market Report 2016 – Modern Offices

Developers’ rallye launch

Office deliveries doubled in 2016, comparing to last year, and development pace is expected to get even stronger.

Construction of some 303 thousand square meters new offices has already begun; total volume of prepared new schemes, which may be finished till the end of 2018, exceeds 630 thousand square meters. Developers share a positive sentiment of the future and speculative developments are back on, especially where adequate phasing is possible.

Three out of the six new deliveries took place in the Váci út office corridor, representing 42% of the annual development volume.

Newly built office volume is expected to surpass 100 thousand square meters in 2017; the primary locations of new projects are South Buda and the region of Váci út. Office developments have been absent in South Buda since 2010; thus, new premises are expected to quickly rent.

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