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Corridor are new Potential hub for Tenants
CROSS SECTIONS OF VÁCI CORRIDOR ARE NEW POTENTIAL HUB FOR TENANTS
While development plots are running out on Váci Corridor, there are new office developments underway on the intersecting streets near the main artery of District 13. The Green Court Office, developed by CODIC in partnership with Venta and Pesti Házak and represented for leasing in co-brokerage by JLL, will deliver 21,000 sqm of leasable space by the end of 2020.
With its record-low vacancy rate of 4% and stock reaching one million sqm, Váci Corridor has proven to be not only the biggest, but also the fastest growing office submarket in Budapest over the past few years. This and the sustained demand for category “A+” office space in that specific submarket may explain why more developers are recognizing the potential in new developments on the side streets of Váci út, especially in its central most section. Dózsa György út is probably the most obvious example of this phenomenon, with several new office projects announced.
Among these, Green Court Office, construction of which started in 2018, may claim to be in the most advanced stage, and is due to be completed in Q4 2020. Realization of the project has already begun with the groundworks and the laying of the foundation. In the coming months, the building itself will gradually emerge and reveal its architectural splendor.
The Green Court Office will complete the multifunctional Green Court complex, initiated in 2017 with the Green Court Residences, totaling 275 apartments and with several shop units on the ground floor, due to be handed over this year.
Bordered by four streets, the complex is nestled in a green, quality environment that the planners and designers opted to continue into the very heart of the Green Court project itself. With the handover of the office building, a fully developed green environment will welcome new tenants, including an inner courtyard which is one of the Váci Corridor’s most expansive green landscaped gardens of 3,300 sqm.
GREEN ACCREDITATION In order to further emphasize the environmental credentials of the building, Green Court Office will be green certified to a BREEAM “Excellent” rating. It will also feature, besides many other facilities, 100 bicycle racks, shower and changing facilities and several electric car chargers in the basement.
Unique features of the office building are the full height, continuous windows and the private terraces on each floor offering views of the beautiful inner courtyard. The double skin façade creates an acoustic barrier so that the office workers will be isolated from the traffic of the main road, though enjoy the advantages of a major transportation hub.
The project’s focal location on the Váci Corridor, high visibility, strong architectural expression and large floorplates make the development an attractive target for corporate tenants. JLL’s leasing experts underline that office projects around the area are of significant volume, yet not every sidestreet offers the opportunity for such a unique development combination. CODIC is among the first to realize a multifunctional complex in this district as a result of the developer’s conscious choice.
“We are very pleased to take part in this unique project and contribute to the rise of an important extension of Váci Corridor, to be known as the Cross-Váci Business Area. We foresee the potential in this zone and eagerly promote it, so that future occupants could enjoy the same wide range of amenities and opportunities that the Váci Corridor provides but in a more relaxed and green environment,” said Krisztina Deák Major, head of landlord representation at JLL.
“We understand that livability and environmentally conscious construction are becoming some of the most decisive factors for medium- and large-sized enterprises when selecting a new location. Green Court Office is exactly the development that can fulfil these expectations,” she added.
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transportation network. Even remotelylocated workspaces (office buildings) should have public transportation connections; this might be designated bus services or something similar,” the HuGB head explains.
Reflecting these locational development trends, the Budapest periphery suffers from an overwhelming vacancy rate of 38%, according to the Budapest Research Forum. This compares to around 4% in the ever popular Váci Corridor with its excellent public and road transportation links.
This corridor is the most favored area for office development with around 30% of total construction, followed by South Buda with about 22%. These two areas are expected to receive two-thirds of the estimated
office pipeline. The challenge for developers is to source suitably-sized, well-located development plots at a time when competition for sites is becoming more intense and therefore more expensive.
PROMOTING PROACTIVELY For their part, local authorities are pro-actively promoting suburban districts to developers as part of urban redevelopment schemes. The concept offers a reciprocal benefit to the developer, the companies that locate in the project and the surrounding population. The transformation of Váci út from a post-industrial area to a major business district is a good example of this, and the District XIII local
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authority is continuing to promote the area as a business destination.
But it is not the only location in town, of course. Atenor has undertaken the development of the 72,000 sqm Aréna Business Campus in District VIII.
“It is not easy to find development sites, but as we experience there is still significant potential in the different parts of Budapest. Our aim is not primarily to find a good plot in the most popular and successful part of the city, but creating submarkets to be the most popular in the future with the added value resulting from our developments,” comments Nikolett Püschl, development & leasing manager at Atenor Hungary.
“Of course accessibility is crucial, therefore we prefer locations with metro connections. On the other hand, spaciousness is another very important factor for us, as our goal goes beyond simply creating office space for rent. It is to enrich the urban landscape with sustainable buildings in a pleasant green and livable environment,” she adds.
The outer ring road is also now seen as a developing business district. Wing, for example, delivered the 58,000 sqm Magyar Telekom Group headquarters here in District IX last year. The complex is located at a metro, tram and road intersection with direct access to the city center and the capital’s international airport. The company has an option for a further office development on an adjacent site.
Wing has also broken ground on the 21,400 sqm headquarters it is building for evosoft Hungary Kft., part of the Siemens Group. This represents the latest built-to-suit, high-tech development project by the developer in Budapest. South Buda has been the established hightech hub of Budapest.
SECOND PHASE The LEED “Gold” accredited evosoft HQ will form the second phase of the Hungarian Nobel Prize-winners Research and Development Park, spread across a two-hectare site on the Buda bank of the Danube, in the vicinity of the Infopark technology park and Budapest University of Technology and Economics. Phase one of the project, the 24,000 sqm built-to-suit, LEED “Gold” Ericsson House was handed over in 2017 by Wing. Despite the green environment
close to the Danube and the technical university, the South Buda area is generally lacking in development sites with direct metro access, which has been one of the major reasons for the success of the Váci Corridor.
Atenor has acquired a plot around 5,000 sqm for the development of its latest office project in Rózsadomb. This site is located adjacent to local amenities and has easy access by public transport
and car to Árpád híd and the M0-M3 motorways and the HÉV suburban railway, according to developer. This is the first office development by Atenor on the Buda side of the river.
With regard to the Central Business District, large office development projects in the historical center of Budapest are rare, with suitable sites difficult to source. Horizon Development is currently developing the mixed-use Szervita Square,
consisting of 15,000 sqm of office, residential and retail space, the LEED Platinum accredited project is due to complete in 2019. Attila Kovács, managing partner of Horizon Development describes the permitting and planning process as longer and more complex in the historic center.
“Accessibility and public transport and metro connections is still the most important issues regarding the location for tenants and I do not think
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that this will change in the near future,” Püschl of Atenor says.
“In addition to a road connection, I think that the area and the building should be livable and contribute to the economy and therefore we prefer to develop campus-type projects. It is not easy to find such spaces but Atenor has bigger challenges in Belgium and Luxembourg and other parts of Europe, and it is easier in Hungary with a better price to value ratio,” she concludes.
