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Office market news

News, analysis and lease transactions from the Hungarian office market

IMMOFINANZ: Group profit for 2016A negatively influenced by Russia and valuation effects, occupancy rate significantly increased, dividend of 6 cents/share planned

IMMOFINANZ recorded net income from continuing operations, i.e. excluding Russia, of EUR 26.9 million in the abbreviated 2016 financial year (2015A*: EUR 60.7 million). The major factors include increased maintenance costs for modernisation projects and the roll-out of the myhive and VIVO! brands, additional costs for the completion of residential buildings in Germany and the market-oriented valuation of CA Immobilien Anlagen AG at EUR -91.9 million. The non-cash effect from the valuation of this investment has already been offset in 2017 by an increase in the price of the CA Immo share.

All time high investment volume is expected this year

In 2017, following its international assessment CBRE has created a survey among real estate investors in Hungary asking them about their market expectations. At the traditional springtime CBRE Investment Breakfast investors turned out to be optimistic about the future. 43% of the respondents stated that the investment market might grow even by one-fifth from last year’s EUR 1.5 billion, and 23% stated that this year they might reach their highest turnover ever.

Buy-Way Dunakeszi welcomes new tenants

Cushman & Wakefield acting on behalf of the owner, CPI Property Group has successfully leased close to 3,500 sq m retail space in Buy-Way retail park in Dunakeszi, Hungary.

OTIS, the World’s Largest Elevator Company Moves to CityZen Offices

Otis Felvonó Kft., the Hungarian branch of the world’s largest elevator company, moves to CityZen Offices from the beginning of April. Hungarian market-leader OTIS, known also as a producer of escalators and moving walkways, opens its new, 870 m2 headquarters at the A+ office building completed by developer ConvergenCE at the end of 2016.

The occupancy rate at Váci Greens’ Building B climbed to 90%

An international service provider will rent a 5200 square meters large office space in building “B” at the Váci Greens office park. With the arrival of the new tenant in July, the occupancy rate of the building will be around 90%. The new large tenant of Váci Greens will move to the Váci office corridor from the city centre.

Rising Construction Costs and Lack of Skilled Labour Force Make Recovery Difficult

The current forecast for total construction volumes shows increases of 8% and 12% for 2017 and 2018, respectively. The barriers for the realization of the developments are the rise of construction costs and the lack of skilled labour force. CBRE expects that these issues raise risks of delivery delays and decrease of developers’ profit margins.

Valuation: Risks can be avoided

Valuation during the sale, purchase or leasing of real estate is a complex process where the property’s market value is shaped by a number of factors. The majority of CBRE’s valuers are experts registered with RICS, a globally-recognized organization working to implement the highest professional international standards. CBRE’s staff’s professionalism paired with outstandingly high value insurance, guarantee a reliable and well-founded valuation and ensure the protection of clients.

Londos-Berlin: neck to neck in the race for investors

London has been ranked as the most attractive European city for real estate investment for the sixth consecutive year, according to CBRE’s annual Investor Intentions Survey being launched at MIPIM 2017. 17% of respondents cited London as their preferred destination for real estate investment. Berlin has jumped to second place in 2017 from fourth in 2016 while Budapest placed tenth along with Frankfurt and Munich.