Vacancy rates reached a record low level on the Budapest office market as a result of modest development activity and strong demand from tenants. The Budapest Research Forum has published its quarterly office market analysis.

Immofinanz has signed several lease agreements since the beginning of the calendar year 2016 accounting for approximately 40,000 sqm of its Hungarian portfolio. Of this figure, prolongation of leases accounts for more than 25,500 sqm, and new and expanded contracts sum up at 14,500 sqm.

Global financial services firm Brown Brothers Harriman (BBH) has signed a lease for an additional 7,500 square meters of office space in the Brown Brothers Harriman building at Kraków’s Orange Office Park. Now in Phase III of its building expansion, BBH will occupy over 14,500 square meters. Cushman & Wakefield represented BBH in the negotiations. Wardyński & Partners provided legal advice.

The total modern office stock in Warsaw reached 4.75 million sqm at the end of Q1 2016. As much as ca. 75% of this space is located in the central Core and Fringe zones, as well as Upper South and South West. Cushman & Wakefield has published the sixth edition of their Skyline Tracker report, outlining developers’ activity in the Warsaw office market.

International real estate developer HB Reavis has announced the acquisition of the BEM Palace in Budapest from Europa Property Fund. Located in the heart of Buda, BEM Palace is the company’s third development site purchased in the Hungarian market and their first redevelopment project across all markets. 

2016 could be the first year that European office employment levels surpass the previous peak of 2008, according to Colliers International’s latest research ‘EMEA Offices: Is Flexibility the Future?’. The report shows that office-based employment levels in the EU have grown by 5 million, representing a 4.3 per cent increase over the last 10 years and surpassing the previous peak of 2008. 

The size of office space lease and sale transactions in Moscow involving foreign companies decreased from 40% to 20% in Q1 2016 compared to Q4 2015. Although foreign companies continue to sign new deals, they are choosing smaller offices and re-negotiating current leases to decrease the amount of occupied space, according to a report by the international consulting company Colliers international.

TriGranit has started its first year backed with a new owner, TPG Real Estate. In Q1 2016, new leases and renewal agreements reached 25,777 sqm GLA, the average occupancy rate is over 95% in TriGranit managed assets and the company has 20,000 sqm GLA office development in progress. Due to the strong performance of the BPO sector in the region, the company plans further office developments in the near future in each of its core countries: Poland, Hungary and Slovakia. 

Flow East, the Anglo-Czech property owner and heritage campaigner announced that it has signed two new leasing agreements with Modrá pyramida stavební spořitelna and AON Central and Eastern Europe resulting in the 100% occupancy of its 13-building central Prague office portfolio.

According to the latest report by Cushman & Wakefield Q1 2016 saw a rapid growth in the supply of office space in Warsaw, which more than doubled the results for the same period in 2015. Due to the record-breaking levels of supply vacancy rates have increased by 1.9 pps to 14.1%. Although statistics show a fall in net absorption, this is probably a temporary decrease in the light of last year’s exceptionally high growth. Cushman & Wakefield expects the office market to continue its growth in the remaining months of 2016, with pipeline supply estimated at 330,000 sq m.