Little cheer for Budapest office sector

Colliers has released a rather glum assessment of Budapest’s office sector, warning that the overhang of supply in 2009 is even greater than in 2008. It asks what it would take for vacancy levels to get down to 6% (the magic number that would spark rental growth) and answers that the lack of credit for new projects could do the trick by 2012. Until then, however, hang on to your seats.

Today the Budapest office market is facing the most challenging crisis in its history, with new supply twice the demand 2008 and approximately three times the demand in 2009. At the beginning of 2010, Colliers International forecasts that the total stock of vacant modern office space in Budapest will be equal to approximately 5 times 2009’s total absorption. Fortunately it appears that new supply in 2010 will be limited, however the ongoing crisis will leave a significant overhang of partially completed buildings which are sure to have an impact on the market over the course of the next few years. Even if the market bounces back quickly to historical levels, the overhang of space would be equal to three years absorption.

Invesco announces Thamova 18 sale

We mentioned it a couple weeks ago, but Invesco today announced officially that it’s sold the 6,500 sqm Thamova 18 office building in Karlín for a little over €12m to an unnamed private investor (we hear it’s a local one). Unilever is the tenant in the building. Invesco was represented in the transaction by Colliers, which says there are three other office buildings in the wider center of Prague under active consideration by various foreign real estate funds and investors.

Hadley Dean takes regional role for Colliers

Colliers International has just announced that its longtime Polish MD, Hadley Dean, has been appointed to the position of managing partner for CEE.

According to Colliers’ statement “Hadley Dean will be responsible for the regional client engagement strategy and cross border initiatives for the Colliers International offices in Czech Republic, Slovakia, Hungary, Romania and Ukraine in addition to his current role as Managing Partner of Colliers International Poland.”

Dean began his career in London and in 1999 he moved to Prague to build and lead an agency team. In 2000, he moved Poland, where he focused on developing the Colliers International’s presence. Hadley holds degrees in business and property valuation and management from Newcastle University and Sheffield Hallam University.

Colliers HU: How can industrial developers continue to speculate?

Colliers’ Budapest office has put out its most recent report on Hungary’s industrial market. Right in the headline, it gets your attention: Decreasing developer activity, discounted rental rates, less transactions…How can developers continue to speculate?

In early 2008 Colliers International forecasted the construction of 390.000 sqm of speculative industrial warehouse space, of which 64% (250.000 sqm) was realized during 2008 and a further 33% (130.000 sqm) was under construction during H1 of 2009. Compared to the original forecast, 92% of the space was realized, raising the speculative stock up to 1.051.000 sqm in Budapest. One quarter of this (263.000 sqm) was vacant on the last day of H1.

Colliers reports that most big tenants are putting off making decisions on new leases, and then admits that large volume spec development has all but ceased. Vacancy has risen from 17% at the end of 2008  because big boxes delivered around the beginning of the year of last year have remained empty. That despite rents being offered at €3.50 and lower. Here’s a link to Colliers News though there doesn’t seem to be a link yet to this report.

Colliers takes over Harvey Spack Field in Poland

Colliers International has announced it acquired the Polish operations of Harvey Spack Field, the UK retail warehousing firm.

HSF’s client list includes leading retail park and commercial centers developers in Poland including Helical Poland, Apollo-Rida, Saller, NEPH, Jermon Poland and Quinlan Private Golub. It’s also been retained on behalf of UK retailers who have entered the Polish market including TK Maxx, Halfords and Carpetright.

The former HSF team will be joining Colliers International including the former Managing Director, Gary Thursby, who will join Małgorzata Trzaskowska, head of Retail Department of Colliers International Poland as the joint head.

HSF’s Poland operations and projects will merge into the Colliers International operations and brand. Harvey Spack Field UK remains independent of this corporate transaction.