Budapest City Report Q City Reports

Transcription

1 Budapest City Report Q3 City Reports COPYRIGHT JONES LANG LASALLE IP, INC. Budapest City Report Q3

2 million GDP Growth ( H1) Unemployment rate (Q3 ) Economy & Investment Economy Inflation 1.9% 4.9% ( -).1% Investment Volumes 2,5 2, 1,5 Average gross wages growth ( -Aug) 6% Source: Hungarian Central Statistics Office (KSH) Retail sales growth ( - Aug) 4.9% 1, Q1-Q3 Office Retail Industrial Hotel Other Prime Yields bps 25 bps 6.75% 6.75% 8.5% Retail Office Industrial Key Transactions 25 bps Q-o-Q change The Q3 total transactional volume reached some 59 million, pushing the overall investment volume between uary and ember to roughly 1.47 billion, almost twice as much as the 215 annual volume. Quarterly investment activity was driven by office transactions (representing 65% of the total transactional volume) with retail assets generating 17%. The remaining share was generated by a mix of hotel, industrial and other types of assets for development purposes. The third quarter saw the closing of the largest office transaction in the history of the Hungarian investment market: the sale of Millennium Towers by Heitman and Trigranit. Prime yields compressed by 25 bps for offices and logistics assets, falling to 6.75% and 8.5% respectively. The prime shopping centre yield remained unchanged at 6.75% Quarter Asset class Property Size () Seller Buyer Q3 Office Millennium Towers 67, Heitman/TriGranit CA Immo Q3 Office Park Atrium 28, GLL Corpus Sireo Q3 Office Dorottya Udvar 19,3 AXA REIM Al Habtoor Q3 Office Margit Palace + Terrapark A and B 43,8 JP Morgan Bluehouse COPYRIGHT JONES LANG LASALLE IP, INC. Budapest City Report Q3

3 22,95 3,1 68,19 5,88 7,87 Office Market In Q3, three new buildings were delivered to the Budapest office market, totalling 39,57. V17 - E-on s 12,35 headquarters was developed by WING; Nordic Light was completed by Skanska with a GLA of 24,9 and Buda Loft was delivered with 2,32. Due to the new completions, the size of the modern office stock in Budapest increased to million. The vacancy rate increased by 5 bps quarter on quarter to 1.9%. Occupational markets remained healthy. Quarterly gross take-up amounted to 95,23 whereas net take-up totalled 56,11. were the main drivers of the leasing market, representing 41% of the total leasing activity. Quarterly net absorption totalled 18,66. Prime office rental levels remained unchanged standing at 22 / month. Vacant stock and vacancy rate by submarket 14, 12, 1, 8, 6, 4, 2, Distribution of existing stock and future supply Spec/OO 2.67 mill.664 mill Speculative Owner Occupied Vacant stock () Vacancy rate (%) 95, , Future supply (including owner occupied buildings) 149,63 4% 35% 3% 25% 2% 15% 1% 5% % Demand Q1-Q3 summary Vacancy rate and completions 8, 7, 6, 5, 4, 3, 2, 1, 56,11 Q3 Q1-Q3 18,66 39,12 133,98 174,82 79,8 Between uary and ember, the Budapest office market expanded by 7,87. During this period, five new buildings were delivered to the market: the third phase of Váci Greens (25,6 ), Váci 1 (5,7 of office space), V17 (12,35 ), Nordic Light (24,9 ) and Buda Loft (2,32 ). Gross take-up amounted to 38,81, whereas net take-up reached 174,82. Both indicators were below the volumes of the corresponding period of 215, when two mega-sized pre-lease agreements were registered, driving demand volumes to a record high. Net absorption totalled 79,8, which is 4% stronger than the 1-year average of the Q1-Q3 absorption volume. The volume of new supply is increasing dynamically. The projects secure pre-leases quickly, hence they are delivered with a significant occupancy rate. Speculative constructions have also reappeared. 23% 21% 19% 17% 15% 13% 11% 9% 7% Q1-Q3 Completions () Vacancy rate (%) COPYRIGHT JONES LANG LASALLE IP, INC. Budapest City Report Q3

4 Retail Market Shopping centre supply / stock () 771,5 Budapest Existing stock 1.36 mill Hungary Typical rents ( / / month) 135, Projects in the pipeline (shopping centres, not under construction) Retail sales growth reached +4.9% between uary and August. The total shopping centre stock in Budapest stands at 771,5 in 25 assets. The size of the stock remains unchanged since 213, when the last shopping centre expansion was delivered. The fluctuation of retailers along the prime high streets (Andrássy Avenue, Váci Street and Fashion Street) is still noticeable. New openings along Váci Street include Ecco, Yves Rocher and Players Room. CCC Shoes is due to open its largest Hungarian store at H&M s former unit in Vörösmarty Nr.1, however the opening date of the new store is yet to be confirmed. The only shopping centre prospect in the pipeline is Etele Shopping Center with 43, of GLA, due to be developed by Futureal and managed by ECE. The construction of the project is due to commence by the end of, with delivery of the asset expected in the first half of 218. The construction of the third Hungarian IKEA store on Soroksári Street is on-going. Construction of the 34, new store is due for completion by mid-217. Shopping centre density/ 1, inhabitants Budapest 444 Hungary 138 Shopping Centre Retail Parks High Street Retail sales growth (% change, year-on-year) % Growth Fall Retail sales volume (calendar adjusted, y-o-y) Source: Hungarian Central Statistic Office (KSH) COPYRIGHT JONES LANG LASALLE IP, INC. Budapest City Report Q3

5 Industrial Market In Q3 one development was completed in the Budapest industrial market: the expansion of Prologis Park Budapest Sziget comprising 21,51 warehouse space. As a result of the new delivery the total size of the stock increased to 1.91 million. The vacancy rate declined 8 bps quarter on quarter reaching 8.9% at the end of Q3. The quarterly total leasing activity amounted to 84,57, which was 8% below the volume recorded in the previous quarter. On the other hand, net take-up totaled 61,7, reflecting a significant, 88% increase on Q2. Gross take up amounted to 294,9 between uary and ember which indicates a 8% increase compared to the volume of the same period of 215. During this period net-take up equaled 124,69 sq m, reflecting a 15% decrease on the corresponding period of 215. Development activity has finally started to pick up. The annual volume of completions is expected to reach 65,71, which will be the highest annual completion volume since 21. Vacancy rate Completions and future supply 8, 7, 6, 5, 4, 3, 2, 1, Q1-Q3 Completions () Q4 Future supply () Distribution of demand by type of take-up 25% Q3 Q1-Q3 2% 15% 1% 23,5 61,7 34,85 124,69 17,21 74,48 5% Q1 Q2 Q3 Q4 Q1 215 Q2 215 Q3 215 Q4 215 Q1 Q2 Q3 Vacancy rate (%) Key Transactions in Q3 Property Size () Type of transaction Distribution of demand by submarkets Q1-Q3 Gross Take-up K-Sped 17 14,87 New Prologis Park Budapest-Gyál 6,85 Expansion Prologis Park Budapest Harbor Park 6,8 Renewal BILK 5,96 Pre-lease 27% 11% 13% 1% 44% 4% Airport Inner city North 9% South East West 14% 18% Airport 2% 1% Inner city North South East 47% West COPYRIGHT JONES LANG LASALLE IP, INC. Budapest City Report Q3

6 Rita Tuza Head of Research rita.tuza@eu.jll.com Ferenc Furulyás Managing Director ferenc.furulyas@eu.jll.com JLL Office Szabadság tér Budapest Hungary Phone number COPYRIGHT JONES LANG LASALLE IP, INC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.