As economic recovery gathers pace in Hungary, the overall property market has seen improvement in the second quarter of 2014, according to Cushman & Wakefield’s ‘Marketbeat: Country Snapshots: Hungary’ report. Driven by domestic demand and fixed investments, the country has seen a significant acceleration of GDP growth (2.7 per cent) –more than double last year’s 1.2 per cent. That’s expected to moderate in 2015, at 2.3 per cent, but still remain high and fully recovery its pre-recession peak of 2008.
Improving economic fundamentals, including real wage growth, falling unemployment and deflationary pressure is strengthening domestic demand and expected to support activity in the retail market. That’s especially due to growing interest from international retailers, particularly in shopping centres and high street destinations.
As demand grows, there are still prime units available for operators looking to establish a presence in retail, while the office property sector continues to enjoy an improving market sentiment, boosting activity levels in the second quarter.
Positive growth in this sector is supported by an increasingly expansion-based business strategy of SSCs, while the manufacturing and logistics sectors have seen a healthy level of demand in the industrial occupier market. The automotive industry is a key driver in this activity, as new tenants and existing occupiers continue to take up additional space. That means the vacancy rate of Budapest has decreased considerably to 19.1 per cent, the lowest figure in two years.