New Office hotspots grow as old favorites fill up
Business districts have become increasingly prevalent across Budapest with new areas of office development emerging as developers seek to find appropriately sized and conveniently located land with direct transport links providing visibility. At the same time, the competition for sites becomes more intense and therefore more expensive.
The professional activity for the first quarter was distributed between 51% for the Váci corridor, 13% for the south of Buda, 13% for the center of Pest and 8% for what passes as the Central Business District (CBD) according to the Budapest Research Forum, or BRF, made up of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary.
From a development perspective, office construction is undertaken in urban locations that are more integrated with the city at large. CPI is planning New Age, a complex on a site near Árpád híd, and has delivered the 16,000 m² Balance Hall, which is part of the 35,000 m² Balance Office Park on Váci út.
“Each location is different and a new building must be integrated into its surroundings. To achieve this, an open dialogue is necessary with the municipality, town planners, other developers and representatives of local inhabitants, ”explains Mátyás Gereben, Managing Director of CPI Hungary.
Another experienced developer in the Váci corridor, Skanska, has started the development of the first 26,000m² phase of the 65,000m² H2Offices, consisting of three interconnected buildings. Codic, meanwhile, is expected to complete the 20,000 m² Green Court office at the end of the year, also on Váci út, and have Modiano, an additional 13,500 m² project planned for this ever popular hallway.
South Buda is the other major office development of choice. “Although the number of available plots is constantly decreasing due to new developments in the main submarkets, developers can still find available plots even on the Váci corridor”, explains Péter Würsching, head of the office group at JLL Hungary .
“On the other hand, the lack of land to develop in certain areas can give impetus to other relatively undiscovered sub-markets and well served by public transport. A good example is the growing importance of the South Buda region where, following the development of the new [fourth] metro and tram line, the developers began in a relatively short time to actively seek land and build new office and retail projects, making it the most dynamic office location after the Váci corridor ” , adds Würsching.
On the banks of the Buda River in southern Buda, Wing completed the 22,000 m² Univerzum, the headquarters of Evosoft Hungary, part of the Siemens group. Indeed, South Buda has essentially become the high-tech hub of Budapest.
“We believe that the South Buda submarket has vast potential for further development as it holds one of the major public transport hubs providing quick access not only to talent coming from Budapest, but also to the breeding ground of talents arriving from urban areas, ”comments Kata Mazsaroff. , rental director at Horizon Développement.
“In addition, the proximity to universities easily connects students to businesses, especially in the IT sector, which is one of the main drivers of the office market in Budapest. The sub-market continues to emerge with a development pipeline of nearly 200,000 m² under construction with a current vacancy rate of 8.6%, ”she emphasizes.
“Occupants will look for office buildings in locations that can provide a healthy environment and good air quality with immediate connection to outdoor spaces. South Buda offers well-connected and easily accessible plots in a green environment that have excellent development potential as we reimagine the future of workplaces, ”adds Mazsaroff.
Another waterfront development south of Buda is BudaPart by Property Market on a 54 hectare site in Kopaszi Gát (Kopasz Dam). The project will include office, retail and residential aspects in addition to large green spaces and parks, all based on the concept of a new city district.
New morning on BakerStreet
Slightly set back from the river, but still in the south of Buda, Atenor has obtained the final building permit for BakerStreet, the first phase of which of 17,000 m² is expected to be delivered in 2023. The company has also signed an agreement for the purchase of an adjoining 8,000 m² plot, on which Phase II of 24,500 m² will be developed.
“The two BakerStreet buildings are being developed to meet the requirements of the BREEAM ‘Excellent’ green certification. In addition to [greater] environmental awareness, all these amenities will improve the quality of life for employees and residents of the region, ”Atenor explains of the development.
With land becoming increasingly scarce, Budapest’s southern outer boulevard has developed into another hub. Wing is scheduled to complete the 42,000 m² Liberty speculative office complex in District IX in 2022, while Atenor is developing the 85,000 m² Arena business campus in phases.
“There are some submarkets whose capacity is coming to an end, for example the CBD, or Central Buda, or the Váci corridor. Therefore, opening other locations is crucial. Many submarkets still have enormous development potential, for example Central Pest, Non-Central Pest, South Buda and North Buda. These places will be the focus of attention for more developers in the future, ”said Nikolett Püschl, Director of Rental and Development at Atenor Hungary.
At the western end of the city, in the 11th district, Futureal is developing the Budapest ONE business park of 68,000 m² on a brownfield site of a transport hub in Etele tér, next to Kelenföld station and Metro 4 station. The complex is considered a new part of the city by the developers.
“Accessibility remains one of the main questions asked by future tenants when looking for a new office location. The well-known mantra of location, location, location still prevails, so the availability of a good connection to public transport remains the focal point for both tenants and developers ”, says Würsching.
This article first appeared in the print issue of the Budapest Business Journal on May 7, 2021.
Balance Hall by CPI.