The View 9

OFFICE MARKET

30

ANIKÓ P. KOVÁCS

Director, Head of

Advisory & Transaction Services, Offices

UNDERWHELMING NEW SUPPLY DID LITTLE TO ALLEVIATE CRUNCH FOR SPACE In several ways, 2019 was a record year on the Budapest office market. This cannot be said of new supply, however, which ended up below our already toned-down expectations. The H2 period saw a mere 38,900 sq m of new office space come to market, which may have been 23%more than in the first half but equated to just one-quarter of that in the corresponding period in 2018. The new completions during the period were once again spread across the city. They were the second phase of Advance Tower (7,600 sq m) on Váci Corridor and Hungária Center (6,900 sq m) in Non-Central Pest in Q3, followed by Balance Hall (16,100 sq m) in Váci Corridor as well as the first phase of Bartók Udvar 2 (8,200 sq m) in South Buda in Q4. Similar to the projects handed over in H1, these buildings were delivered with a high combined occupancy rate of 87%. Including these completions, the total new supply in 2019 amounted to 70,500 sq m – barely one-third of the volume in 2018 and significantly below the 133,700 sq m that was initially expected over the year, as the wave of delays continues due to construction bottlenecks and commencements dragging out.