The View 7th edition

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the majority of large pre-leases were signed by international corporations such as IWG, NN, Raiffeisen Bank, Sykes and Thermo Fisher. Discounting the owner occupation pre-commitment for the new MOL HQ in 2017, the volume of pre-leases increased by 32% last year to 94,900 sq m. In terms of the geographical distribution of demand, the Váci Corridor submarket widened its lead as the number one choice for relocating or expanding companies, as it amassed 39% (+14pps y-o-y) of the citywide annual take-up volume. Nearly 30% of the submarket’s total take-up came frompre-leases. The most significant deals along Váci Corridor were secured by blue-chip international companies such as BlackRock, NN and Raiffeisen Bank in new or still under construction buildings, as well as relocations to older buildings by public sector entities. The next largest shares within take-up were registered in South Buda with 15% (-7pps y-o-y) and the CBD with 14% (+6pps y-o-y). The former saw a similar mix to Váci Corridor, although here 57% of new demand came in the form of pre-leases. The CBD registered several large relocation deals in its existing stock, complemented by a single pre-lease in the ongoing Szervita Square project, which is set to host the city’s largest and most high-end co-working hub operated by SPACES (IWG). The remaining submarkets all registered single-digit shares of the total take-up volume in 2018. With regards to tenant profiling, the second half of 2018 evened out the sectoral split of annual take-up. During the period, the share of financial services companies strengthened while that of ICT companies weakened. Thus, 2018 saw the most diversified breakdown of new demand during this cycle, as the business and professional services, financial services,

30%

25%

MARKET AVERAGE

20%

Grade A

15%

10%

Grade B+

5%

Grade B-

0%

2011 Q4

2012 Q2

2012 Q4

2013 Q2

2013 Q4

2014 Q2

2014 Q4

2015 Q2

2015 Q4

2016 Q2

2016 Q4

2017 Q2

2017 Q4

2018 Q2

2018 Q4

Average Vacancy Rate by Asset Categories

Source: CBRE Research