The lowest vacancy was registered in North Buda with a 4.4% rate, whereas the highest rate remained in the Periphery submarket (31.4%). Net absorption has remained positive by the end of the second quarter, amounting to 33,720 sqm, Budapest Research Forum (BRF) reports.
In the second quarter of 2022, two new office buildings were delivered to the Budapest office market with a total of 30,750 sqm, the new owner-occupied OTP HQ building with a size of 28,000 sqm and Paulay 52 with a size of 2,750 sqm.
Total demand reached 108,020 sqm in Q2 2022, representing a 10.2% increase year-on-year. New leases stood for the largest share of total leasing activity with 32%, followed by lease renewals in the existing stock with 27%, expansions of existing premises reached 10%, pre-leases in new developments reached 4%, while the share of owner-occupied buildings was 26% of the total demand.
The strongest occupational activity was recorded in Váci Corridor submarket, attracting 44% of the total demand. Central Pest submarket reached second place with 14%, followed by the North Buda (13%) and Central Buda (10%) submarkets. South Buda registered a single-digit share with 8% of the total demand.
According to the BRF, 144 lease agreements were concluded in Q2 2022 and the average deal size amounted to 750 sqm. The BRF registered seven transactions concluded on more than 2,000 sqm of office space, including two renewals, three new leases, one owner occupation, and one expansion.
Compared to the previous quarter of the year, the percentage of new handovers decreased in Q2, as a lot of handovers passed to Q3. Demand was strong, and the percentage of closed transactions increased by 26%. As in the previous quarter, new leases were able to achieve a higher proportion of total demand than renewals.