Responding to the sudden spike in demand, the developers started to expand on a scale never seen before in Hungary to meet the new needs as soon as possible. The development momentum has continued since then, so the supply is slowly exceeding the demand as a result of the uncertainty of the war.

In the second quarter of 2022, the stock of industrial real estate around Budapest exceeded 3 million square meters, and around half a million square meters can be expected to be handed over in the second half of the year as well. The vacancy rate has already exceeded 6% at the national level, and we can expect further growth by the end of the year with the handing over of speculative developments. Despite the increase in supply, developers continue to raise prices because this is the only way they can offset increased construction costs. In the Budapest area, the net monthly rent for new, premium logistics warehouses has increased to €5.50-6.00, which approximately represents a 20% increase in one year. The most sought-after rural cities are barely behind the rents of the capital, with the headline rents in Győr, Tatabánya and Kecskemét being around €5.00. In addition to higher rental costs, tenants have to deal with increased energy prices and higher operating costs. Uncertainty can be felt in the market, therefore the negotiations have slowed down, and the interested parties are waiting for the first invoices in January before making decisions.

The uncertainty created by the Russian-Ukrainian war is further strengthened by the existing energy crisis, as a result of which transactions in the office market have slowed down. In the current situation, the landlords are working together with the tenants to rationalize their energy costs. Keeping ESG aspects in mind has now become even more timely, as it is possible to reduce tenant costs through environmentally conscious and energy-efficient solutions. The rent difference between modern developments and older buildings has continued to increase, but at the same time, increased development costs encourage owners to promote tenant engagement by "making it greener" their existing, older buildings. After the total modern office stock in Budapest exceeded 4 million square meters in the first quarter of this year, it currently amounts to 4,176,000 square meters, of which more than 80% is "A" and "B" category modern speculative office space, the remaining 82,400 square meters being private property. The capital's office market was expanded by four new office buildings, more than 82,000 square meters, the first phase of Millenium Gardens, the second and third phase of Budapest One, the Major Udvar, and the privately owned Bosch Campus were handed over. The vacancy rate continued to increase, reaching 11% for the first time since 2016. The average Budapest premium rent is 24 EUR/sqm/month, while the average rent for "A" category buildings ranges from 14-17 EUR/sqm/month.