The total modern office stock currently adds up to 3,955,600  sq m,  consisting  of  3,309,000  sq m  of  ‘A’ and ‘B’ category speculative office space as well as 646,600 sq m of owner-occupied space.  
 
In  the  third  quarter  of  2021,  there  was  no  new  supply delivered  on  the  Budapest  office  market.  During  this quarter 7,100 sq m were moved from the speculative to the owner-occupied space, consisting of two office buildings.

The office vacancy rate decreased to 9.1%, representing a  0.7  pps  decrease  quarter-on-quarter  and  a  1.0  pps increase year-on-year. In line with the preceding quarters, the most occupied submarket was North Buda with  a  4.6%  vacancy  rate  whereas  the  highest  vacancy rate remained in the Periphery (31.8%).
 
Net  absorption  rebounded  to  positive  territory  during the  quarter,  as  the  total  occupied  stock  increased  by 29,300 sq m.
 
Total demand reached 81,500 sq m in Q3 2021, representing  a  17%  decrease  quarter-on-quarter,  but  a 3% increase year-on-year. New leases overpowered regarding  the  share  of  total  leasing  activity  with  60%, followed by renewals in the existing stock with 22%, pre- leases  in  new  developments  amounted  to  11%,  while expansions of existing  premises  reached  7% of  the  total demand.

The  strongest  occupational  activity  was  recorded  in  the Non-Central Pest and Váci Corridor submarket, attracting 22% and 21% of the total demand. The Central Pest and South  Buda  submarkets  attracted  18%  and  14%  of  the transactions,  and 10%  of  the  total  demand was  realised in the CBD submarket.
 
According to the BRF, 146 lease agreements were concluded in Q3 2021; the average deal size amounted to 560 sq m. The BRF registered seven transactions concluded on more than 2,000 sq m office space, including five new leases, one renewal and one pre-lease.
 
The largest new agreement was signed for a total of 4,300 sq  m  in  BudaPart  City  office  buildings,  while  the  largest renewal was a 3,800 sq m deal in Terra Park C.
 
The Q3 2021 office market statistics continued to reflect the  uncertainties  and  economic  slow-down  triggered by the COVID-19 pandemic. While quarterly demand remained  somewhat  weaker  than  in  previous years, the
gap  narrowed  as  the  number  of  transactions  showed recovery and vacancy rate slowly begins to decrease.

BRF