The retail real estate market shows a double face – stable capital, decreasing number of stores in the countryside

Stable demand in the capital, low vacancy

According to the latest commercial real estate market report by the Hungarian National Bank, Budapest’s primary shopping centers operated with a vacancy rate of 1–2 percent by the end of 2024, which means almost full tenant saturation. In contrast, the vacancy rate in secondary locations is around 10 percent. At the same time, rental rates in the capital have not changed significantly: in the premium category, rates of 70–90 euros/m²/month are typical, while in less frequented areas, rates of 30–50 euros/m²/month are typical.

According to Péter Szegő, an analyst at Duna House, premium locations continue to generate stable demand, and in the inner-city districts – especially in V., VI. and VII. – rents can reach net 8–12 thousand forints per square meter per month. On Andrássy Avenue, they can ask for up to net 28 thousand forints. In contrast, premises are available in Soroksár or in the outer parts of Újpest for as little as 2–4 thousand forints/m².

Decrease in the number of shops and price correction are typical in the countryside

According to KSH data, the number of operating retail shops nationwide decreased to 96 thousand by June 2024, 7 thousand less than a year earlier. The largest decline affected non-food stores (–7.9%), but the number of grocery stores (–5.4%) and gas stations (–1%) also decreased. Budapest is both the most densely populated and the most affected area: 20 percent of all stores are located here, but the decline was also the largest here, almost 10 percent.

Although the number of stores has dropped significantly, the total floor space has decreased by only 1.5 percent, indicating that mainly smaller units have disappeared. The average store size has increased by 4.7 percent in one year.