MNB: last year, most investments in the real estate market came in the office and retail sectors

By: Trademagazin Date: 2023. 04. 27. 12:27

The investment turnover on the Hungarian commercial real estate market decreased by 28 percent last year, its value did not reach EUR 1 billion, while the majority of transactions continue to be made in the office and retail sectors, said the director of the Magyar Nemzeti Bank (MNB) at an online press conference on Thursday.

Tamás Nagy also touched on the fact that in the fourth quarter of 2022, the constructions started by the state decreased by 43 percent on an annual basis, which was only partially compensated by the constructions and investments started by the private sector. The latter was powered by new developments.

He pointed out that last year more than 200,000 square meters of office space were handed over on the office market, while the market was able to absorb more than 100,000 square meters of space. Thus, by the end of the year, the vacancy rate rose to 11 percent, which increased by another 1 percentage point in the first quarter of this year.

According to Tamás Nagy’s calculations, based on the delivery volume planned for 2023 and the more moderate demand in the office market, this rate could reach up to 13.5 percent by the end of the year, which is still significantly below the critical level, added the director of the MNB.

He said that the macroeconomic factors affecting the retail sector are fundamentally unfavorable. Retail trade is facing risks that have not been seen in recent years: inflationary pressure is high at the same time, while real wages and retail turnover have fallen.