Office
Leasing activity in Budapest remained robust in Q2 2024, leading to a 24% increase in H1 gross take-up compared to the same period the previous year. Lease renewals were dominant in Q2, accounting for 41% of the total take-up. Despite the vacancy of two large office spaces during the quarter, Q2 saw a strong positive net absorption due to the high occupancy rates of newly completed office developments.
Retail
As inflationary pressures eased, signs of economic recovery emerged at the beginning of 2024. Retail sales began to grow, showing year-on-year increases each month since January. While the Hungarian retail stock has remained largely unchanged for many years, with few large-scale developments, there has been a notable rise in smaller retail projects in the countryside, anchored by mass-market brands.
Industrial
Following a weaker start to the year, leasing activity gained momentum in Q2 2024. A significant pre-lease agreement notably boosted the volume of net take-up in Greater Budapest. Despite this recovery, the national gross take-up in H1 2024 remained 17% lower compared to the same period in 2023. Market-wide rents pressures have prompted landlords to offer more incentives to attract and retain tenants.
Investment
The investment landscape in Hungary experienced subdued activity in the first half of 2024, reminiscent of the levels seen post-Great Financial Crisis, reflecting the global economic scenario. Retail emerged as the leading sector, constituting 50% of the total volume. Yield levels, having undergone repricing, are beginning to stabilise and continue to play a pivotal role in shaping the investment landscape.
