Hungary Investment Market
- Hungary’s investment market showed signs of recovery in H1 2025, with volumes surpassing €280 million, a 55% YoY increase. The growth
was driven by three large deals, though most transactions remained below €25 million. - Offices led (49%), with two major deals; industrial stayed strong with HelloParks’ sale, while retail softened.
- Yield stabilisation is underway, led by a 25 bps drop in industrial yields; sentiment is cautiously optimistic for H2, with more deals in the pipeline and the €100M+ Marriott sale expected to push volumes beyond 2024.
Budapest Office Market
- Budapest’s office stock remained flat in H1 2025, with limited completions and 88% of the 306,000 sq m under construction being BTS. Vacancy declined on strong end-user demand, while speculative development slowed, shifting focus to central repositioning and repurposing projects.
- Net take-up remained stable at 47%, with owner-occupier demand rising to 11%. No pre-leases were recorded, a trend expected to persist in the near term.
- Prime CBD rents held firm, while rental growth was recorded in South Buda, Central Buda, and the Váci Corridor, with further increases anticipated for ESG-compliant space.
Hungary Industrial Market
- Hungary continues to solidify its position as a key hub for EV and battery manufacturing. L&I stock expanded by 192,000 sq m in H1
2025, reaching 5.8 million sq m. Vacancy increased to 13.4% in Greater Budapest and 10.8% in regional markets, due to excess second-hand space. This uptick peaked in Q2, with no significant further rise expected. - Take-up hit 439,800 sq m (+35% YoY), led by regional demand. Pre-leases made up 20%, with renewals at 36%. Development remains
active in H2, with 506,000 sq m under construction and 47% pre-let. - Prime rents in Greater Budapest fell to €5.50 (–5.2% YoY), while regional remained stable, a trend expected to continue. Rising incentive levels are further widening the gap between new and older stock.
Hungary Retail Market
- Retail development has been slow, but 55,000 sq m is planned for H2 2025, including Zenit Corso and 12 retail parks. Refurbishments and extensions show cautious growth, with Time Out Market boosting Budapest’s appeal.
- Inflation eased to 4.4% but remains above target, keeping spending subdued. Retail sales rose 3.1% YoY (Jan–May) and are expected to hold steady, with e-commerce at 8.1%.
- Prime high-street rents rose 7.7% YoY, reflecting recovery and demand in key locations, while other retail segments remained stable and are expected to stay steady.
Budapest Hotel Market
- Budapest’s hotel market has shown growth in the first half of 2025, with a YTD RevPAR increase of 8.2% year-on-year, driven by recovering occupancy. Despite occupancy levels remaining shy of the 74% seen in 2019, RevPAR has risen by 23.3% since then.
- The Budapest hotel supply saw a limited increase, with three openings (Kimpton BEM, Radisson Collection Basilica, and Tribe Budapest Airport). The midscale segment represents over 38% of the total stock. Supply growth is expected to remain constrained, rising by 1.3% by year-end 2025.
- Total demand in paid accommodation in 2025 is expected to exceed 2024 by over 14.5%, driven by a 15.5% rise in international demand and stronger air connections.
