The View 7th edition

39

Rendering of The New Campona Interior

Besides a remarkable expansion of food & beverage chains in the agglomeration of the capital; CCC, Pepco, Rossmann, DM and Playersroom (among others) opened several new units in regional strip- malls on the countryside. Prime rental levels in prime shopping centres remained fairly unchanged over the year, as leasing activity remained modest in the marginal vacant space available across the top schemes. In contrast to this, a slight increase could be witnessed in prime high-street locations, where prices are being pushed up by the continuously strong tourism spending. Several mix-used developments and ongoing refurbishments are expected to refresh the existing modern retail stock; however, we do not see any downward pressure on prime rents looking forward.

Prime high street rents – for a typical unit of 100 sq m in the most prime location in Budapest – is currently standing at EUR 140 / sq m / month, up by 4% since last year. Considerable increases are being shown on historically strong tourist destinations, like Fashion Street or Andrássy avenue, where the average rent is slowly catching up to pre-recession levels. Tier-1 shopping centre rent levels remained flat over the year and currently top out at EUR 105 / sq m / month. There is a large gap from this level to the city’s Tier-2 centres, where the prime rent level stands in the region of EUR 50 / sq m/ month, up by more than 10% , y-o-y. Prime space in shopping centres in regional cities have not shown any significant rental increase over the year, priced at EUR 60 / sq m/ month, as demand was primarily driven by the existing tenants’ expansions.

100%

7%

7%

9%

13%

14%

90%

20%

7%

13%

29%

18%

13%

80%

13%

Homeware and Department Stores Consumer Electronics

29%

Specialist Clothing

70%

9%

36% 13%

30%

18%

60%

Other

18%

50%

25%

40%

10%

Mid Range Fashion

Coffee and Restaurants

14%

29%

24%

40%

30%

Luxury and Business

20%

14%

7%

12%

45%

20%

13%

38%

7%

12%

10%

21%

7%

20%

14%

7%

6%

0%

2012 2013 2014 2015 2016 2017 2018

New Retail Entries in Hungary

Source: CBRE Research