The size of Budapest office market reached 1.9 million sq m in Q1 2008. The completion level of 41,900 sq m was almost four times as high as same period last year but decreased by 25% q-o-q. Four office buildings were completed, all of them located in the Non Central submarket, property -magazine.eu reports.

BSR Center (25,500 sq m) and the last tower of Gateway Office Complex (in total: 29,200 sq m) in district 13, Kész Mester Udvarház (4,200 sq m) in district 9 and Urban Offices (4,000 sq m) in district 3.

On the demand side, take-up amounted to 72,900 sq m in Q1. This volume is 22% higher than the same period last year but is 21% down on last quarter. Renewals had a 26% share of total take-up, while pre-leases had just a marginal share of 7% in total. Central and Non Central areas were again the most popular submarkets among tenants, representing 45% and 48 % of take-up respectively.

More than 100 lease contracts were signed in the first three months of 2008. The largest deal was a renewal on 10,000 sq m in Office Trade Center by PricewaterhouseCoopers while the biggest new occupier was Vodafone, which leased 7,800 sq m in Aréna Corner. Among the largest transactions, Bridge Hungary leased 3,200 sq m in BSR Office Building and UPC renewed its lease agreement in Kinizsi Office Building on more than 3,000 sq m. Four pre-lease agreements were signed: among others HLB Client Holding leased 1,800 sq m in Stefánia Park located in district 14.

Due to the high level of demand compared to completion, vacancy levels decreased in CBD and Central submarkets, while increasing in the other areas. The overall vacancy declined slightly q-o-q, and stands at 12.0% which is the same level as Q1 last year. CBD and Central submarket vacancies stand at historic lows with 13.0% and 8.1%, respectively.

Photo: BGNES/EPA