Colliers Market Reports 2025

HUNGARY

Colliers Market Reports 2025

HUNGARY

Investment Market Report

2025

Macro Environment Hungary

In the first three quarters of 2025, economic performance was constrained by weak activity in the industrial and construction sectors, as well as subdued investment, while the services sector provided some support, mainly driven by household consumption alongside nominal and real wage growth. Overall, the Hungarian economy expanded at a lowerthan-expected pace, effectively stagnating (Q1–Q3: 0.3% year-on-year growth) (Figure 1).

According to Colliers’ projections, GDP growth in 2025 is expected to be around 0.5%, followed by a more robust expansion of 2.0–3.0% in 2026. Despite the slowdown

in economic momentum, the unemployment rate has remained stable, largely reflecting resilient labour market conditions. As of November 2025, the unemployment rate stood at 4.4%. As the economy is expected to gradually recover and the labour market remains tight, no significant changes in employment levels are anticipated.

In November 2025, HICP inflation stood at 3.9% in the Czech Republic, 3.7% in Hungary, and 8.6% in Romania, while inflation in other CEE countries and across the EU stabilised at around 2–3% (Figure 2).

GDP growth for 2025 is expected to be around 0.5% and with a more robust increase of 2.0% to 3.0% anticipated in 2026.

Macro Environment Hungary

In 2025, Hungary’s base rate remained unchanged at 6.5%, and no adjustment is expected in the coming months. However, headline inflation in November stood slightly below the central bank’s 2–4% target range, at 3.8% (HICP: 3.7%). At the same time, government-imposed price caps and delayed price adjustments in the services sector may trigger a postelection rebound in inflation, posing risks for 2026 (Figure 3).In the eurozone, inflation is projected to be close to the ECB’s 2% target in 2025, largely supported by a strong euro, lower energy prices, and easing food inflation.

Amid stable eurozone interest rates, 10-year government bond yields have broadly stagnated. However, in 2026, alongside a more favourable inflation outlook and the potential for gradual base rate easing, yields are expected to decline.

Hungary’s 10-year government bond yields decreased to around 6.8%, driven by the continued disinflation process, fiscal imbalances, and both global and domestic interest rate dynamics. The cautious stance of the Hungarian central bank, combined with ongoing global uncertainty—particularly in the EU and the US continues to limit downward pressure on yields. As a result, investors still price in elevated risk, keeping long-term bond yields at relatively high levels (Figure 4).

The exchange rate remains exposed to multiple uncertainties, including the anticipated stagnation of the base interest rate and shifts in international market sentiment. A key factor supporting the forint’s relative stability is the carry trade, driven by the substantial interest rate differential resulting from Hungary’s elevated base rate.

As of end-December 2025, the average exchange rate stood at around 385 EUR/HUF. However, beyond the unchanged base rate, external risks such as uncertainty surrounding EU funding and geopolitical tensions limit the potential for further forint appreciation. This delicate balance between attractive yields and macroeconomic vulnerabilities keeps the forint broadly stable, confining the exchange rate to a relatively narrow range unless major global or domestic shifts occur (Figure 5).Examining the main commercial real estate–related segments, and in line with weakening international and domestic demand, industrial production declined by 3.5% in the first eleven months of 2025. The automotive sector the largest contributor to manufacturing output recorded a 4.5% contraction in the first ten months of the year, while the manufacture of electrical equipment, including battery production, fell sharply by 12.3% over the same period.

However, a recovery in industrial output could emerge in 2026, as several major FDI projects such as those by BMW, CATL, and BYD are expected to commence or expand production.

This industrial downturn was accompanied by a 5.5% decline in investment during Q1–Q3 2025, with the processing industry recording a 2.4% decrease. Nevertheless, Hungary continues to offer attractive investment opportunities and remains an appealing destination for foreign capital. Inward investment is supported by a fundamentally favourable tax environment particularly with respect to corporate taxation a skilled labour force, available state subsidies, and strategic advantages stemming from the country’s central location within the region.

Macro Environment Hungary

Retail sales increased by 2.6% in the first eleven months of 2025. However, clothing sales essentially stagnated, rising by only 1.5%, while the volume of ecommerce exceeded last year’s levels with an above-average growth rate of 7.6%. At present, the increase in real wages and individual entrepreneurial incomes primarily supports savings rather than consumption, indicating continued consumer caution.

Besides all of the economic uncertainties, ongoing fiscal imbalances, and stillelevated government debt, the credit rating agencies have so far not changed Hungary’s sovereign debt rating and continue to classify it in the investmentgrade category, which is broadly viewed as supportive for sovereign bond demand and foreign investor confidence.

As of late 2025, the sovereign credit ratings for Hungary are as follows:

• Fitch Ratings: BBB with a Negative outlook — reaffirmed in December 2025, keeping Hungary one notch above non-investment grade but signalling potential downward risk.

• Moody’s: Baa2 with a Negative outlook affirmed earlier in 2025, keeping Hungary just above the junk threshold but highlighting fiscal slippage and stalled EU fund disbursement as risks.

• Standard & Poor’s (S&P): BBB- — the lowest rung of investment grade, with the outlook revised to negative in 2025 due to stagflation and fiscal pressures.

Credit rating agencies have so far not changed Hungary’s sovereign debt rating and continue to classify it in the investment-grade category.

Investment Hungary

Hungary’s CRE investment market is approaching a turning point in 2025. Following a record-low and highly volatile year in 2024, total investment volume in 2025 (€960 million) has already surpassed the full-year 2024 figure by 137%.

The office sector emerged as the most active segment, accounting for 49% of total investment volume, followed by the industrial sector at 19% and hotel properties at 18%.Domestic investors remained the most active participants, representing approximately 77% of all disclosed transactions.

Across the market, yields showed signs of stabilization throughout 2025. However, financing costs remain relatively high, and Hungary continues to carry a risk premium compared to Western European and some Central and Eastern European markets.

By Q4 2025, prime yields were recorded at 6.5% for offices, 7.0% for retail assets such as shopping centres, and approximately 6.75% for modern industrial and logistics properties (Figure 11). In the office market, a shift toward a more tenant-driven environment is becoming increasingly evident. Headline rents for newly developed projects are expected to remain stable or experience only marginal changes. Institutional investors continue to focus on modern, ESG-compliant buildings in prime locations.

At the same time, opportunistic investors are showing growing interest in lower-grade office assets located in strong micromarkets, where higher yields are possible. These lower-grade offices are also increasingly being considered for conversion into hotel or residential properties. Overall, a significant shift in office yield levels is not anticipated in the near term.

Hungary’s CRE investment market is approaching a turning point in 2025. Following a record-low and highly volatile year in 2024, total investment volume in 2025 (€960 million) has already surpassed the fullyear 2024 figure by 137%.

Investment Hungary

For industrial properties, institutional investors primarily focus on logistics and warehousing facilities located in prime locations, mainly near Budapest or along major transport corridors, offering high occupancy rates, stable cash flows, and ESG compliance. Despite these favourable factors, the industrial market is expected to maintain its current prime yield level, hovering around 6.75%. From an investor’s perspective, the limited availability of suitable supply may pose a challenge. In rural areas, market activity is largely driven by end-users rather than conventional institutional investors.

In 2025, retail investment volumes were less dominant. Nevertheless, certain transactions involving high-street assets, retail parks, and shopping centres—mainly in countryside areas—showed growing investor interest. Prime shopping centres typically command yields of around 7.0%, while prime high-street properties, such as those on Váci Street, recorded yields of approximately 6.25%.

The hotel sector continues to benefit from rising foreign tourist numbers and increasing investment activity. In recent years, hotel investments have been primarily driven by domestic players, while international developers have remained focused on new developments and expansion a trend expected to continue.

Table 1. Main Investment Transactions in 2025

Figure 11. Prime Gross Initial Yields

Market Outlook Hungary

Investment yields in Hungary remained broadly stable in 2025, with only limited compression anticipated in 2026, supported by a more favourable interest rate environment particularly for forint-denominated financing. Maintaining an adequate yield premium will be crucial to preserving Hungary’s competitiveness relative to Western European and other CEE markets, and to reengaging Western European capital, especially German institutional investors, during 2026. While further yield compression beyond this period cannot be ruled out, the medium-term outlook remains subject to market and policy uncertainties.

In 2026 political developments are expected to play a key role in shaping investor sentiment, with the upcoming elections likely to influence future economic policy.

At the CEE level, institutional investment activity is already strengthening in several markets, most notably Poland and Czechia. This momentum could support capital flows into Hungary in 2026, provided EU-related risks ease and the domestic macroeconomic environment continues to stabilise.

In this environment, investors are expected to focus on core-plus and defensive income strategies, favouring grocery-anchored retail, prime logistics assets with long lease terms, and high-quality office buildings supported by strong tenant covenants. At the same time, selectively repositioned or repurposed secondary office assets converted into residential or hotel use may continue to offer attractive risk-adjusted returns, provided capital

expenditure is tightly controlled, and assets are upgraded to meet flexible occupier requirements and evolving ESG standards.

The residential sector, together with conversion opportunities from obsolete office stock, is expected to gain further momentum as structural supply constraints continue to limit new development. Alternative investment segments are also attracting increasing attention, particularly student housing and emerging Build-to-Rent schemes, although the latter remains at an early stage compared to Western European and other CEE markets.

Asian investors are expected to remain active, primarily as end-users, supported by continued foreign direct investment inflows. Looking ahead to 2026, relatively low euro interest rates could reduce financing costs, enhancing Hungary’s appeal to international investors. Capital availability is expected to remain sufficient to support increased activity from opportunistic investors targeting higher-yielding, lower-grade assets.

Colliers expects investment volumes to further increase in 2026, supported by renewed institutional activity. Hotels offices, and industrial/logistics properties are likely to remain the most sought-after asset classes, while retail properties and higher-yielding, lower-grade assets (such as B–C category offices) with potential for repurposing may also draw investor interest. ESG considerations continue to influence all types of investors and are expected to play an increasingly important role in pricing, asset selection, and overall investment decisions.

Colliers

expects investment volumes to further increase in 2026, supported by renewed institutional activity. Hotels, offices and industrial/logistics properties are likely to remain the most sought-after asset classes.

HUNGARY

Office Market Report

2025

Highlights / 2025

Market Summary

Overall transaction volumen stagnated in 2025, mainly due to large governmental owner-occupied transactions, with total leasing volume increasing by only 0.7% year-on-year (505,848 sqm compared to 502,151 sqm in 2024). However, net take-up which reflects new demand rose by 14.1% year-on-year, reaching 217,644 sqm versus 190,730 sqm in the previous year The increase in net takeup was primarily driven by a higher volume of pre-leases, largely attributable to one major transaction

At the same time, the limited volume of new completions has significantly reduced the availability of newly delivered office space. As a result, competition among tenants for the relatively small number of new buildings has intensified. This occupier preference is clearly reflected in vacancy dynamics across submarkets and building types: ESG-compliant office buildings recorded a vacancy rate of 15.3%, 0.6 percentage points lower than the average vacancy rate of speculative stock.

In 2024 and 2025, a total of nine new speculative office buildings were completed, adding 80,730 sqm to the market (Table 1). An additional 78,777 sqm was added to the owner-occupied (OO) stock, bringing total new supply to 159,507 sqm. Key OO additions included Bohn HQ, Richter’s new headquarters, the Knorr-Bremse R&D Centre, and Dürer Park I–II. As a result, total modern office stock now stands at 4.46 million sqm, of which 3.52 million sqm is speculative space

Newly delivered properties in 2024 and 2025 achieved an average initial leasing rate of 67.8%, with a modest annual increase of 2.8 percentage points.

Driven by positive net absorption, limited new supply, and the repurposing of older buildings, vacancy rates have continued to decline. In addition, business service centre (BSC) tenants have re-entered the market, alongside new Asian occupiers, further contributing to the reduction in vacancy.

The speculative pipeline remains limited at around 138,900 sqm, with 10 new buildings expected to be delivered by the end of 2028. At rents, a widening gap is emerging between older Category A buildings and newly delivered office properties. Average rents for existing Category A buildings remain at €17.1/sqm, while newly completed buildings command average rents of €19–21/sqm, with some prestigious projects achieving more than €25/sqm.

By the end of 2025, the overall market vacancy rate had dropped to 12.5%, while the speculative vacancy rate stood at 15.9%. Within this, Class “A” office vacancy was 15.8% and Class “B” vacancy reached 15.9% (Figure 1).

Prominent speculative leasing activity in 2025 was primarily driven by tenants from the IT, BSC and healthcare sectors. While energy prices have shown signs of stabilisation, volatility persists and stock exchange prices remain well above pre-2021 levels. Against this backdrop, occupiers continue to prioritise energy-efficient, ESG-compliant modern office buildings in order to mitigate exposure to potential future cost fluctuations

Market Summary

By the end of 2025, the overall market vacancy rate had dropped to 12.5%, while the speculative vacancy rate stood at 15.9%.

Leasing activity

In a year-on-year comparison transaction volume in Budapest increased by 0.7%, driven largely by owner-occupier transactions at Dürer Park. In 2025, total leasing activity amounted to 505,848 square meters. Net take-up reached 217,644 square meters, representing a 14 1% increase compared to 2024. In contrast, lease renewal volumes fell more sharply, declining 19% year-on-year.

The structure of transactions shifted compared to the same period last year, highlighting the increased share of net take-up (new demand). New leases accounted for 33% of total leasing activity, which represents a 3.3 percentage point increase year-on-year Expansion deals made up 4 5% of the total, a decrease of 2 percentage points, while renewals comprised 42% of leasing activity, falling by 15.3 percentage points. Owner-occupied (OO) transactions experienced notable growth, totalling over 76,000 square meters (Figure 2) In 2026, the planned relocation of government institutions to the Zugló Városközpont and Budapart developments could add a further 290,000 sqm to owner-occupier transactions. Additional owneroccupier relocations are expected in 2027, linked to the move to the MBH Bank HQ I–II buildings.

Net take-up represented 43.0% of total demand in 2025, which is 5 percentage points higher than the share recorded in 2024

As in previous years, the Váci Corridor remained the most active submarket, accounting for 33% of total leasing activity. Central Pest ranked as the second most sought-after location, driven largely by government-related transactions, and represented 21% of total leasing volume Excluding these government deals, South Buda would have been in second place, with 76,500 square meters leased.

Notably, 2025 saw the emergence of new market entrants, a trend less common in previous period This includes both new players in the BSC sector and growing interest from Asian companies in office space exemplified by BYD’s owneroccupier transaction in Q2

Net take-up represented 43.0% of total demand in 2025, which is 5 percentage points higher than the share recorded in 2024.

Vacancy rate

The current trajectory of the vacancy rate is shaped by several key factors In both 2024 and 2025, the market experienced positive net absorption, reflecting growth in occupied office stock The decline in vacancy was also supported by the low level of new deliveries, which limited the addition of unoccupied space. In parallel, some buildings previously listed as vacant have been converted to owner-occupied status such as the IP West transaction further reducing available supply.

Repurposing has also remained an ongoing trend, with several older office buildings being converted into residential units, dormitories, or student housing. Taken together, these factors have led to a notable decrease in the overall market vacancy rate, which now stands at 12 5%, while the speculative vacancy rate is currently at 15.9%. The relocation of governmental tenants will temporarily increase vacancy levels, but a further decline is expected after 2026

Vacancy levels vary significantly across Budapest’s submarkets and office categories (Figures 3–4). The highest speculative vacancy rates are found in the Periphery, and Pest submarkets, with Central Pest recording 22% driven primarily by Mill Park,

Millennium Gardens, and City Gate and Non-Central Pest at 21 4%, where Parkway, Olympia A, and IN15 Office Park contribute the most vacant space In contrast, the lowest vacancy rates were observed in Central Buda (9.4%), North Buda (11%), South Buda (12.2%) and Vaci Corridor (14.1%). These differences largely reflect the superior quality and desirability of modern office stock in the Buda submarkets and in Vaci Corridor.

New leasing demand is increasingly concentrated in more contemporary buildings, indicating a clear shift in tenant preferences This is reinforced by the fact that, even within the Class "A" category especially for buildings less than 10 years old vacancy rates remained below the market average.

Furthermore, green-certified speculative office buildings recorded a vacancy rate of 15 3% at the end of 2025, 0 6 percentage points lower than the speculative market average. A growing number of companies are moving away from older assets in favour of energy-efficient, ESG-compliant, and employee-centric environments. This is further reflected in segment differences: the vacancy rate for Class “B” offices stands at 15.9%, compared to 15.8% for Class “A” offices.

Rents

Since 2014, rents for both Class “A” and Class “B” office buildings have followed an upward trend, which has shifted to stagnation or slight growth over the past year As of Q4 2025, the average asking rent for Class “A” offices stands at approximately EUR 17.1 per square meter per month, while Class “B” offices average EUR 12.8 per square meter per month. New developments (less than one year old) command

headline rents ranging between EUR 19.0 and 21.0 per square metre per month on average, while prime rents can reach EUR 25.5 per square metre per month

While overall rent levels remain relatively stable, they vary significantly across different submarkets and building categories, depending on factors such as location, age, and green certifications

New developments (less than one year old) command headline rents ranging between EUR 19.0 and 21.0 per square metre per month on average, while prime rents can reach EUR 25.5 per square metre per month.

Average asking rent for class “A” office buildings in CBD surpasses 20 EUR/sqm/month and in some prestigious buildings it can be between 25-30 EUR/sqm/month.

Rents

Persistently high financing costs, especially for HUFdenominated loans, combined with expected rising construction demand and costs, are expected to support modest growth in headline rents for new office developments.

Older, less efficient buildings, coupled with soaring energy expenses and increasing vacancy rates overall, contributed to downward pressure on rent levels.

In core submarkets like Central Business District (CBD), Váci Corridor and South Buda, rent levels have experienced more pronounced increases compared to other submarkets. Average asking rent for class “A” office buildings in CBD surpasses 20 EUR/sqm/month and in some prestigious buildings it can be between 25-30 EUR/sqm/month (Figure 5 )

Development Pipeline

Table 2. Speculative Projects Pipeline 2026– 2028 Delivery

The total speculative office pipeline through Q4 2028 remains very limited, amounting to just 138,900 square meters. Of this, 47,906 square meters are expected to be delivered by the end of 2026 (Table 2). Several projects have already commenced construction, but their completion will depend on achieving sufficient pre-leasing commitments.

47,906 square meters of office space are expected to be finalized by the end of 2026.

Development Pipeline

Speculative office developments currently under construction through Q4 2028 are mainly concentrated in the Váci Corridor, which accounts for 89% of the total under construction volume. Consequently, the most significant ongoing projects including Centerpoint III, H2Offices Phase II and Lang Negyed are located in this submarket. The Váci

Corridor’s speculative pipeline amounts to approximately 123,600 square meters of office space.

The second most active submarket is Central Pest, where the M76 development represents the main project in progress (Figure 6)

Figure 6. Distribution of Pipeline until Q4 2028

Speculative office developments currently under construction through Q4 2027 are mainly concentrated in the Váci Corridor, which accounts for 89% of the total under construction volume.

Sources: Colliers, BRF

Outlook & Forecast

Although Hungary’s economic growth is expected to remain modest at around 0.5% in 2025, GDP expansion could accelerate to 2–3% in 2026 This improving economic outlook is likely to support a gradual recovery in occupier confidence and, in turn, increased demand in the office market.

According to the European Central Bank (ECB), eurozone inflation, which averaged 2.4% in 2024, is projected to moderate to 2.1% in 2025 and further decline to 1.9% in 2026. In Hungary, inflationary pressures began to ease towards the end of the year, with December inflation recorded at 3.3%. However, on an annual average basis, inflation remained above the National Bank of Hungary’s target, reaching approximately 4.4%.

In parallel with the strengthening economic environment, a gradual recovery is expected in the construction sector from next year, driven primarily by improving residential demand. As a result, construction cost pressures are expected to reemerge, although only a modest increase in construction prices is anticipated, rather than the sharp cost inflation seen in previous years.

With development activity at historic lows, Budapest’s office development pipeline has contracted to its smallest volume in many years. This reflects a prolonged period of cautious developer behaviour amid elevated construction costs, tighter financing conditions and subdued pre-leasing demand.

At the same time, market fundamentals are gradually improving. After several quarters of expansion, vacancy rates have recently peaked and are now showing early signs of a downward trend. This trajectory, however, may be temporarily disrupted by large-scale relocations of government tenants into newly completed office schemes such as Dürer Park, BudaPart and Zugló Városközpont, which could result in a short-term increase in vacancy over the next year. Nevertheless, this potential rise is expected to level off by the second half of 2026, after which vacancy rates are likely to resume their decline

The improving outlook is supported not only by stabilising occupier demand, but also by a continued decline in the share of lease renegotiations, indicating that occupiers are once again making longer-term commitments rather than merely optimising existing space. In parallel, new market entrants from the BSC sector largely absent in recent years are returning, further strengthening demand for high-quality, well-located office buildings.

Against this backdrop of limited speculative supply and gradually improving demand dynamics, competition among tenants for the relatively small number of new, future-proof office developments is expected to intensify in the coming period, particularly for ESG-compliant assets in prime and established submarkets (Figure 7 )

New market entrants from the BSC sector— largely absent in recent years—are returning, further strengthening demand for high-quality, well-located office buildings.

Outlook & Forecast

In 2026, the planned relocation of government institutions to the Zugló Városközpont and Budapart developments could add a further 290,000 sqm to owner-occupier transactions. Additional owneroccupier relocations are expected in 2027, linked to the move to the MBH Bank HQ I–II. buildings.

HUNGARY

Industrial Market Report

2025

Macro Tendencies

I&L related sector’s performance

• Weak corporate and household consumption, declining industrial production, subdued export markets, and low investment activity collectively resulted in stagnating GDP growth of 0.4% in 2025. However, in 2026, National Bank of Hungary estimates GDP growth to rebound to around 2.4%, while interest rates may begin to decline. Nevertheless, U.S. tariff policy and the 15% tariff measure still pose potential risks to production and growth volumes.

• In 2025, average overall inflation in Hungary reached 4.4%, accompanied by a stagnating HUF base rate and a stabilising EUR/HUF exchange rate.

• The labour market remained tight, with the unemployment rate stagnating at 4.4% in Hungary; however, regional disparities persist.

• Between January and November 2025, in line with the downturn in industrial performance, the automotive manufacturing and electric component

sectors experienced year-on-year declines of 4.5% and 12.3%, respectively. These decreases highlight Hungary’s strong reliance on German (EU) automotive and battery production, as well as the ongoing weakness in international demand affecting the automotive industry (Figure 1).

• In terms of GDP composition, the manufacturing sector accounted for a significant 14.9% of GDP in Q1–Q3 2025, while logistics including transportation and warehousing contributed an additional 4.5%. Within manufacturing, automotive production represented approximately 26% of output, equating to around 3.9% of total GDP. Battery production accounted for 9.3% of manufacturing output, or approximately 1.3% of Hungary’s total GDP (Figure 2).

• The warehousing sector showed positive momentum, supported by a 7.6% yearon-year increase in e-commerce volumes between January and November 2025.

Rental Market Supply

• However, while provincial stock is gradually catching up, the domestic logistics and industrial real estate market remains overwhelmingly concentrated in and around the capital. Approximately 67% of the total 6.13 million sqm of logistics stock is located in Budapest and its surrounding areas.

• This regional concentration is also reflected in the market structure: 62% of the Budapest inventory is controlled by the top five developers, while nearly 40% is held by just the two largest players (Figure 3).

• Considering total stock composition, city logistics plays only a peripheral role, accounting for just 11.1% of inventory, while Small Business Units continue to expand alongside the dominance of bigbox facilities.

• At the end of 2025, Budapest’s logistics/industrial real estate inventory

stood at 4.082 million sqm. Of this total, 89% comprised big-box logistics facilities, while the remaining 11% consisted of city logistics properties.

• In 2025, a total of 327,438 sqm of new space was delivered to the market (See page 6, Table 1).

• Inventory growth in the Budapest region has been continuous, albeit with slowing momentum. Between 2021 and 2022, stock expanded by 17%, equivalent to 460,800 sqm. From 2022 to 2023, total stock increased by 11.7%, adding 364,757 sqm. In 2024, growth moderated to 7.7%, or 267,924 sqm. In 2025, total stock expanded by a further 8.7% (326,705 sqm).

• Since 2020, the number of newly delivered buildings exceeding 20,000 sqm has shown a clear upward trend. By 2025, a total of seven such large-scale buildings had been completed.

Others; 21,74%

8,64% WING; 7,37% GLP; 5,46% Waberer's; 4,99% Logicor; 3,77% BSZL Zrt.; 3,24% W.P. Carey; 2,27% VGP; 2,19%

Rental Market Supply

Budapest-Stock & Vacant Area

Distribution

5. Suburban Regions Stock Distribution (Q4 2025)

Sources: BRF, Colliers

BUDAPEST

6. Suburban Regions Vacant Area Distribution (Q4 2025)

Sources: BRF, Colliers

New Supply and Pipeline

Budapest

By the end of 2026, 300,681 sqm new stock expected to be realized in Budapest and its surrounding areas (Table 2.). It is important to note that these numbers reflect confirmed deliveries only; additional space may come onto the market through speculative, pre-leased, or build-to-suit (BTS) projects. Currently, 53% (159,000 sqm) of the ongoing projects are pre-leased in the Budapest

region. In Budapest and its surroundings, the largest ongoing project is CTPark ERD, BERD05 80,000 sqm and HelloParks Maglód MG4, 45,000 sqm. Properties under construction are primarily focused on Big-Boxes, which is 93% of the total pipeline.

Market Demand, Rents

• In Budapest and its surrounding areas, total demand — including renewals — reached 667,490 sqm in 2025. Net take-up, which captures new demand only, amounted to 447,820 sqm in the Budapest region during the same period, exceeding the total level recorded in 2024, reaching the second-best year after 2020. (see Figure 7).

• Regarding contract types, renewals and preleases dominated the Big-Box segment, accounting for 33.1% (191,243 sqm) and 29.6% (171,424 sqm) of the total demand, respectively (Figure 8).

• In 2025, the pre-lease rate of newly delivered buildings stood at 51%, which is significantly lower than in previous years, except for 2023, when it was only 23% (Figure 9).

Market Demand, Rents

Budapest

• Regarding vacancy rates, an upward trend has been observed since the end of 2019, when vacancy reached a historic low of 1.9%. Since then, vacancy has increased steadily, with a temporary correction in 2024. By the end of 2025, the vacancy rate had risen sharply above 10%, reaching 12.8% in the Budapest metropolitan area (Figure 10).

• However, the indicator that most accurately reflects demand dynamics net absorption, defined as the change in occupied space turned negative in H1 2025, mainly due to weak take-up earlier in the year. A recovery occurred in the final quarter, which accounted for 45% of total annual net demand, bringing net

absorption to a positive level of 108,210 sqm for 2025 as a whole (Figure 11.).

• Nevertheless, this represents a significant unbalance compared to the 233,904 sqm of positive net absorption recorded in 2024 in the Budapest metropolitan area.

• Looking at transaction sizes, the number of leases exceeding 10,000 sqm has grown significantly since 2020. In 2023, there were 10 transactions above 10,000 sqm, totalling 209,657 sqm. In 2024, the market recorded 11 new lease transactions above this threshold, amounting to 197,111 sqm. In 2025, 12 new transactions exceeding 10,000 sqm were registered, totalling 238,000 sqm (Figure 12).

Market Demand, Rents

Hungary

• End-user demand to buy remains strong for modern, appropriately infrastructured, ESG-compliant smaller to medium-sized standalone buildings serving as company headquarters, warehouses, or industrial facilities. However, the supply for such properties remains sporadic, occasional, and limited.

• In terms of rental rates, for Big-Box properties, in 2025, they ranged from 5.25 to 5.75 EUR/sqm/month in the market (Figure 13.). Currently, stagnation and a slight correction are observed due to a stronger tenant-driven market.

• As for office rental rates, for Big-Box properties, they range from 9.00 to 12.00 EUR/sqm/month,.

• Compared to other CEE countries, Big-Box rental rates vary at 2025. In Bucharest, they are lower than in Hungary, at around 4.70 EUR/sqm/month. In Prague, they are significantly higher, at 6.20-7.40 EUR/sqm/month due to very low vacancy rates. In Warsaw, they are around 4.50 EUR/sqm/month, and in Bratislava, they are around 5.00-6.40 EUR/sqm/month for BigBox properties.

• Rental levels are also affected by the fact that construction costs are decreasing, financing costs are stabilising, and yields remain stable. Meanwhile, land prices are rising slightly, and in sought-after locations, available development plots are becoming increasingly scarce.

Hungary Countryside

• Currently, only about 25% of the total inventory in countryside locations belongs to international developers who are also active in the main market, Budapest. However, among these, there are several, more special manufacturing facilities, SLBs (sale and lease back), and unique standalone BTS (build-to-suit) properties.

• The total countryside stock amounts to approximately 2 million sqm. However, it is important to note that this stock has an extremely heterogeneous composition, and many properties do not meet the criteria for Budapest.

• In terms of territorial distribution, 17.5% of the logistics stock outside Budapest is located in Hajdú-Bihar County (mainly in Debrecen), followed closely by Győr-Moson-Sopron County (primarily in Győr) with 16.42%, Bács-Kiskun County with 13.5% (centered around Kecskemét), and Fejér County with around 11%. Together, these four counties account for 58% of the total countryside logistics stock.

• In terms of the pipeline, 250,777 sqm is currently under active construction in the countryside, of

which 60% is pre-leased. The countryside’s share of the total Hungarian pipeline is increasing and has reached 45.5%, which is 10 percentage points higher than at the end of 2024.

• For a long time, Győr and North-Western Hungary qualified as the second-largest market after Budapest in terms of demand. However, currently, it is evident that the route of M3 motorway, especially the triangle formed by Miskolc - Debrecen - Nyíregyháza, has come into focus. Furthermore, interest in southern locations (Kecskemét, Szeged, Pécs) is steadily increasing, parallel to government support of this region. In 2025, 58.8% of all transactions were concentrated in Eastern Hungary, while only 41.2% took place in Western Hungary.

• On the real estate buyer side, there is a high demand for existing modern industrial buildings in the range of 5,000-30,000+ sqm. However, the supply is extremely limited nationwide, with occasional properties typically available in the range of 5,000-10,000 sqm, only.

Market Pipeline

Countryside

és Innovációs

Ipari

és Innovációs

Industrial Investment Market

• 2025 marked a turning point in investment activity, as total Hungarian investment volume has already exceeded the full-year 2024 figure by 117.5%. At the same time, industrial investment volume surged by 213% to EUR 153.3 million, making it the second-strongest year on record after 2019.

• This growth is supported by the stability and relative attractiveness of yields compared to other CEE countries, the stagnation of financing costs for HUF-denominated loans, decreasing costs for EUR-denominated loans, and increased activity of domestic investors.

• From an investor's standpoint, logistics properties remain in high demand, as evidenced by the largest transaction in recent years the sale of two buildings at HelloParks Páty, acquired by the Erste Real Estate Fund.

• Yields, after an upward trend, have shown signs of stagnation in 2024 and 2025. The industrial market is still expected to maintain historically low yield levels, hovering around 6.75%. While investor interest in logistics remains strong, the limited availability of suitable investment opportunities may pose a challenge.

• On the supply side, in the current market and pricing environment, larger developers are more likely to hold onto their assets. A 'wait and see' approach is increasingly common.

• Maintaining Hungary’s competitiveness in the investment market, particularly in comparison to Western Europe and other CEE countries, requires yield stability. As a result, no major turnaround is expected in 2026.

• The rising importance of ESG compliance is becoming increasingly evident, even among investors who previously gave it less priority. This trend is expected to influence pricing going forward.

• The market is likely to be driven primarily by domestic and existing investors, although Asian players particularly from China remain active on the horizon. However, these Asian entrants are primarily end-users rather than investors, often linked to foreign direct investment inflows.

Hungary Land Market

• Between 2018 and 2022, there was significant demand in Budapest and its surroundings, with both developers and end-users active in the market. As a consequence, nearly all of the ready to develop plots in the direct vicinity of the M0 ring road were almost depleted.

• In 2023 and 2025, although the demand/transaction volume decreased, prices increased to a range of 30/40-60/70+ EUR/sqm. Reason of the price increase in recent years is partly due to the continuous reduction in supply of problem free areas with good connections and sufficient utilities and zoning, and partly because landowners, encouraged by favourable real estate market prospects and price increases, were willing to hold onto their plots for higher prices.

• Furthermore, supply growth remains constrained as developing new areas on available plots becomes increasingly challenging. Potential supply is tightly regulated; for example, converting arable land is a complex process that requires centralized approval to withdraw it from agricultural use, with rising associated withdrawal costs adding to the difficulty.

• In countryside markets, the land market is generally characterized by greater supply and more attractive pricing. However, in certain exposed locations for example, key automotive hubs it is more difficult to find plots near major manufacturing plants, and prices are typically higher.

Hungary Market Outlook

• In 2025, financial costs remained historically high despite the stagnation of Hungary's base rate and the decreasing interest rates on euro-denominated loans. The slower-thanexpected economic performance, alongside missing investments and weaker consumption, is also influenced by the weakness of the German economy and subdued activity in key industrial segments, including automotive manufacturing, electric vehicles (EVs), and parts production.

• In 2026, the Hungarian economy and industrial production are expected to rebound, supported by large FDI investments such as the BYD, BMW, and CATL factories, which are set to begin production; however, the volume of these investments also poses potential risks.

• With parliamentary elections scheduled for 2026, a temporary wait-and-see approach is expected among investors and businesses, followed by a potential rebound in activity once the political direction and economic policies become clear.

• Although HICP inflation is on a downward trajectory, it remains elevated compared to regional peers. In 2025, Hungary’s inflation rate (HICP) stood at 4.4%, which is 1.9 percentage points above the EU average.

• Significant actual FDI inflows are still expected, partly driven by targeted governmental incentives, particularly in countryside markets. A regional realignment may occur, with Southern Transdanubia and the Southern Great Plain especially areas around Szeged and Pécs becoming increasingly attractive for investment.

• This shift could open the door for limited volumes of speculative development in certain secondary regions. However, the pace and scope of new projects continue to depend on the availability of adequate infrastructure (e.g., electricity, water, connectivity). FDI is still predominantly directed toward owner-occupied facilities, sustaining a competitive and active market in countryside areas, while major developers remain cautious toward speculative projects.

• Ongoing investments tied to the EV industry, rising Asian demand (redefining the role of regional logistics hubs), and growing warehousing needs due to nearshoring and reshaped production strategies continue to absorb capacity. These factors are expected to contribute to long-term vacancy stabilization in the industrial and logistics sector.

• Easing of construction material supply disruptions and a moderation in overall construction demand have helped temper cost increases. This could facilitate the on-time delivery of ongoing developments and reduce cost-related risks. In 2026, alongside expected growth in demand from both the production and residential sectors, some further increases in prices are anticipated.

• Higher energy prices and ESG considerations are further boosting demand for green-certified industrial and logistics spaces. BREEAM certification is increasingly seen as a market standard. Despite overall subdued investor activity, interest in the industrial/logistics segment remains relatively resilient compared to other sectors.

HUNGARY

Retail Market Report

Market Summary of the Hungarian Retail Sector

1.

The retail market in Budapest is primarily centered around shopping centers, with a total of 23 modern shopping centers in the capital city, including 7 prime shopping centers. Additionally, the high street segment is strong, hosting numerous luxury and aspirational brands on Andrássy and Fashion Street and commercial brands, gift and F&B retailers on the pedestrian portion of Váci utca. Prime SC and High Street vacancy levels are very low. Key Money is again starting to be asked for Váci utca locations.

Within Hungary, tourism in Budapest is largely driven by the growth in the number of overnight stays by foreign tourists. In 2025, the number of guest nights by foreign tourists increased by 7.5% yoy.

By December 2025, the inflation rate decreased to 3.3%. In the clothing and footwear sector, price growth was lower, at 1.6% by the end of the year. The overall inflation rate for 2025 was 4.4%, at clothing sector it was 1.8%.

In Hungary, average purchasing power per capita increased by 6.5% in 2025, reaching EUR 12,323. In Budapest, which has the highest purchasing power, the average stands at EUR 15,739 per capita, 27.7% above the national average. However, Budapest’s figure is still 22.4% below the European average purchasing power per capita of EUR 20,291.

Nominal net wages rose by 9.4% yoy in January–November 2025, supporting household real income growth (+4.8%) and contributing to an increase in retail consumption. As a result, total retail sales grew by 2.67% year-on-year in 2025, while the volume of sales in the clothing and footwear segments rose only by 1.5% with health and beauty goods and e-commerce being the primary driver of the overall expansion with 6.1 and 7.4% respectively. Thus the largest increase in sales were seen in the FMCG , H&B and food sectors, providing strong revenue growth in convenience stores and retail parks.

Macro Trends of the Retail Sector

A stable EUR/HUF exchange rate contributed to easing inflationary pressures, with inflation in the clothing and footwear segment remaining below 2%, while overall inflation slowed to 3.3% by year-end, resulting in a full-year average of 3.3% (Figure 1).

Despite the inflationary environment, real wages increased by around 4.8%, supporting a 2.7% year-on-year rise in retail sales volume in 2025. The clothing and footwear segment recorded below-average growth of 1.5%, while health and beauty products and e-commerce emerged as the main growth drivers, posting increases of 6.1% and 7.4%, respectively (Figure 2).

Foreign tourism continued to underpin retail spending, with the strongest impact observed along City Centre high streets. International overnight stays increased by 7.5% year-on-year in 2025, reinforcing footfall in prime urban locations and sustaining demand for retail, food & beverage, and leisure concepts (Figure 3).

Despite the inflationary environment, real wages increased by around 4.8%, supporting a 2.7% year-on-year rise in retail sales volume in 2025.

Central

Macro Trends of the Retail Sector

According to the National Bank of Hungary’s expectations, disposable income is projected to continue rising in 2026 and 2027, supported by growth in individual entrepreneurial earnings and real incomes. As consumer confidence improves in the coming years, household consumption expenditure is also expected to increase. Average growth is estimated at around 4.7% for 2026, with slightly lower growth anticipated in 2027.

As consumer confidence improves in the coming years, household consumption expenditure is also expected to increase. Average growth is estimated at around 4.7% for 2026, with slightly lower growth anticipated in 2027.

Purchasing power

Hungary

In terms of purchasing power, Budapest held the top position in the country with an average of 15,739 euros available for expenditures and savings per person in 2025. This was almost 28% higher than the national average. Out of the 20 counties (incl. Budapest) in Hungary, only five had above-average purchasing power. This indicates a clear advantage for Western Hungary, including the capital itself, as well as Pest, Fejér, Komárom- Esztergom, and Veszprém counties.

Supply & Pipeline

As of the end of 2025, Hungary’s total modern retail stock excluding warehouses and high street units stands at approximately 2.39 million square meters, comprising shopping centers, retail parks, and outlet centers. In the shopping centre segment, no new developments have been delivered since autumn 2021, when Etele Plaza and the renovated Gobuda Mall added a combined 62,000 sqm to Budapest’s stock, bringing the capital’s modern shopping centre supply to nearly 784,000 sqm. The only recent addition is Zenit Corso in Zugló, an 11,000 sqm scheme that opened in Q4 2025 and is positioned primarily as a local neighbourhood centre

The pipeline remains limited, with the only major project being Indotek Group’s planned demolition and reconstruction of 30 year old Duna Plaza into the enlarged, tenant and catchment area compatible upscale 47,000-square-meter Duna Mall, scheduled for completion in 2029. Meanwhile, the total stock of retail parks and outlet centers has reached 720,000 square meters. In 2024 and 2025, five new retail parks opened in the provincial market, each ranging from 5,000 to 6,500 square meters, including new schemes in Várpalota (featuring tenants like Sinsay, Ecofamily, KIK, KFC, and JYSK), Hajdúsámson (hosting Rossmann, KIK, and TEDI), DERA Park (Ecofamily, Sinsay, Dm, TEDI, Pepco, Kik, Takko, Budmil etc.), MI-Shop Phase I, Miskolc (Rossman, Háda, Sinsay etc.) and Varda Market Phase II. The retail park segment remains active, with four more schemes planned outside Budapest between 2026 and 2027. Obtaining Building permits and the now more cumbersome Plaza Stop exemption

that is required prior to submitting a building permit, the progress of new development has slowed and retailers are becoming increasingly frustrated with the process. However and probably due to the Plaza Stop legislation which has been in place for the last 10 years, in terms in various forms, Hungary has the second lowest retail density statistics after Bulgaria, with around 250 sqm shopping centre GLA per 1,000 inhabitants.

A TimeOut Market gastro concept also opened in Q4 2025 in the historic Corvin Palace shopping center in the Downtown, featuring 11 F&B operators, 3 pubs and an event halls spanning 2500 m2. An 800 m2 outdoor terrace area with bar and 2-3 F&B operators will open by summer 2026 (Figure 6.).

In parallel, refurbishments are gaining traction, including the ongoing renovation and expansion of ALBA Plaza, and the transformation of 14 large-format Tesco hypermarkets acquired by Adventum into Shopland Shopping Centers, with downsized Tesco units and a broader range of fashion, F&B, and service tenants,. These will not only improve asset quality but also create an increase in total retail stock as they had previously been classified as hypermarkets which are not included in the total retail stock numbers. Shopping Centres have seen the entrance of new brands of 2025/26 including Health&Beauty brands Rituals, Belodore, Kaeri Korean Cosmetics, Hungarian beauty brand Andrienne Feller, Lululemon, or expansion of existing brands such as Mango and Nike. Several new brands are actively looking for locations to open in 2026.

According to retail density statistics, Hungary has the second-lowest level after Bulgaria, with around 250 sqm per 1,000 inhabitants.

Figure 6. Retail (SC, retail park, outlet centers) density in CEE countries GLA/1,000 inhabitants

Czechia

Leading Shopping Centers

In Budapest

Zara, H&M, Pandora, Douglas, Marionnaud,Media Markt, Hervis, BUZZ, Foot Locker, Humanic, NIKE Rise, 26 unit Food Court plus 9 restaurants and cafés elsewhere,Mutliplex 2.

H&M, Pandora, Van Graf, Intersport, Reserved, NIKE Rise, Douglas, Jysk, Best Byte, Interspar, Mutliplex

Primark, TESCO, Mango, H&M, SportsDirect, Pandora, ,Douglas, Peek&Cloppenberg, all Inditex brands, Notino, IMAX, Cinema CIty

Reserved, H&M, Pandora, Hervis, MediaMarkt, HalfPrice, Douglas, Notino, SPAR, Mutliplex

Zara, H&M, GAP, Zara Home, Douglas, Müller, Peek&Cloppenburg Jysk, strong Food Court, Mutliplex

Zara, H&M, Pandora, Hervis, Douglas, Müller, MediaMarkt, Marionnaud, Interspar, no multiplex

H&M, Pandora, Douglas, Müller, Michael Kors, Furla, Högl, LiuJo, 5 banks, Fjällräven, Reserved, Interspar, Mutliplex

Shopping Centers

In Budapest

Number of Shopping Malls: 23

Modern Shopping Center stock: 784,806 sqm

Latest development (2021): Etele Plaza (55,000 sqm)

rebuilt EuroCenter, GoBuda Mall (25,000 sqm) No new pipeline except for rebuilt, repositioned, enlarged Duna

into DunaMall (37,000 sqm in 2029)

Largest shopping centers by size

High Street Overview

Andrássy Avenue, designated a UNESCO World Heritage site due to the uninterrupted stretch of eclectic Beaux Art buildings lining the street, providing suitable venues for some of the world’s leading luxury and fashion brands. The most popular brands include Gucci, Louis Vuitton, Moncler, ROLEX, Hublot, Jimmy Choo are joined by premier brands such as Furla, COS, Max&CO, Northface or Michael Kors among many others. Several long vacant shops have recently been leased to high-end fashion and jewelry brands who will open by 2026, creating a much more vibrant atmosphere on the street than what has been in the past 10 years.

In comparison, Fashion Street, which runs between Andrássy and Váci Street might seem small, however it is under central ownership and managed to create an integrated stylish home to a number of upmarket international brands such as Massimo Dutti, Lacoste, ZARA Home, Tommy Hilfiger, COS, Helly Hansen and Philipp Plein.

It is bordered by numerous opulent hotels such as the Kempinski and Al Habtoor Palace. Retailer demand has pushed Fashion

Street rents to 3rd highest position in the region after Vienna and Prague.

Vaci Street is the oldest and most famous pedestrian shopping street of Budapest, with the highest footfall in Hungary, averaging between 40,000 and 60,000 per day, with stores reporting highest turnover levels in Hungary. It is bustling with restaurants, cafés and more mass-market retail stores. The commercial portion of the street from Vörösmarty Square to Kossuth Lajos Street is quite small, only 800 meters in length which means that surrounding streets are starting to become more popular. It provides great retail shopping experiences, including flagship stores for Zara, H&M, Bershka, Pull and Bear the North Face, Adidas among others.

The Bazilika area is the food and beverage hub of downtown Budapest. It boasts many restaurants including Bestia, MÁK Bisztro, Academia Italia, Textúra and high-end bars, such as High Note Skybar or La Fabrica. Numerous seasonal festivals are held in the large square in front of Saint Steven’s Bazilika, attracting locals and tourists alike.

High Streets Budapest

Type, Rents & Tenants

F&B Hub / Bazilika

Type: Restaurants, Cafés, Bars

Prime rent: 60-80 EUR/sqm/mo (+ Key Money)

Main tenants: La Fabrica, Textúra, MÁK, Akadamie Italia, Bestia, Tokio, Tom Geroge Osteria, Starbucks, Big Fish, MÁK, Trattoria Pomo D’Oro, Costes Downtown, Essencia Restaurant, High Note Skybar

Andrássy Avenue

Type: Luxury and aspirationalbrands

Prime rent: 80-120EUR/sqm/mo

Main tenants: Louis Vuitton, Jimmy Choo, Gucci, Moncler, MaxMara, COS, Max&Co, Pinko, Zegna, Boggi, NUBU, AERON, Michael Kors, Hublot, Breitling, Rolex, Watches de Luxe, Swarovski, TUMI, Hogl, Furla, Samsonite, Herendi, Missoni, Longines, WKruk, Messika, relocated MaxMara

Fashion Street

Type: Premium brands

Prime rent: 160– 200EUR/sqm/mo

Main tenants: Massimo Dutti, Hugo Boss, Zara Home, Marciano by Guess, Tommy Hilfiger, COS, Benetton, Lindt Boutique, OYSHO, Calvin Klein, Falconeri, Helly Hansen, Lush, NOBU, Starbucks, Jo Malone

* Prime means a shop 100-200 sqm with good frontage

Váci Street, VörösmartySquare

Type: Massmarket

Prime rent: 150 – 180 EUR/sqm/mo

Main tenants: H&M, Zara, C&A, Bershka HalfPrice, Pull and Bear, Hard Rock Café, Humanic, Kazar, Müller, Douglas, MAC, Swarovski, Pandora, MANGO, Adidas, BUZZ, Foot Locker, The North Face, ECCO, GEOX, Vapiano, McDonalds, Burger King, KFC

High Streets Budapest

Main luxury & Premium brands

Main luxury & premium brands

• Boggi Milano

• Breitling

• BUZZ

• Chrisand Fur

• Coccinelle

• COS

• Ermenegildo Zegna

• Falconeri

• Footshop

• Frey Wille

• Furla

• Ghraui Chocolate

• Gucci

• Harmont & Blaine

• Helly Hansen

• Hublot

• Hugo Boss

• iStyle

• Jimmy Choo

• Jo Malone London

• Lacoste

• LiuJo

• Louis Vuitton

• Marco Bicego

• Massimo Dutti

• MaxMara

• Max&Co

• Michael Kors

• Nanuska

• The North Face

• Omega

• PhilippPlein

• Pinko

• Rolex

• Spark Le Monde

• Swarovski

• Tag Heuer

• The North Face

• Tommy Hilfiger

• Tumi

• Wolford

Health & Beauy Brands

on main high streets

• Adrienne Feller

• Belodore

• Bobbi Brown

• Clinique

• Dm

• Douglas

• Estée Lauder

• Jo Malone London

• L’Occitane

• Lush

• MAC

• Rossmann

• Müller

• Neroli

• Omorovicza

Retail Brands by

Categories

on main high streets

New Market Entries

Rent Levels

Overview

Rental fee trends in Hungary’s retail market are showing signs of growth across most segments, although prime shopping centre rents have not yet returned to pre-COVID levels. In dominant shopping centres, average rents for 150–200 sqm units typically range between EUR 70–90 per sqm per month, while larger anchor tenants generally secure lower rates of around EUR 28–30 per sqm per month.

Prime high street rents on Váci utca have increased by approximately 15% since early 2024, reaching EUR 160 per sqm per month and, in exceptional cases, up to EUR 200 per sqm. This represents a roughly 20% increase compared to 2023/2024 levels. On Andrássy út, prime rents have shown a more moderate rise, currently standing at around EUR 60–70 per sqm per month for units with strong visibility. Further rental growth is expected over the next 12 months, supported by tight vacancy rates and rising footfall driven by continued strong growth in international tourism to Budapest.

In retail parks, rents for larger units exceeding 400 sqm increased to approximately EUR 12–13 per sqm per month by year-end 2025. However,

many tenants continue to seek landlord contributions or handover conditions beyond the standard Shell & Core specification.

Lease negotiations are increasingly commencing earlier than in previous years often up to two years before lease expiry as tenants aim to secure favourable locations and terms, particularly on prime high streets. Vacancy levels are also declining on side streets adjacent to Váci utca, such as Petőfi

Sándor utca, Szervita Square, and Fehérhajó utca, as well as in secondary locations including the Körút, where take-up has been driven by food & beverage, service-oriented, and discount retailers. These include barber shops, GSM stores, drugstores, and sneaker retailers.

Despite persistently high energy costs and rapidly rising labour expenses increasing retailers’ operating costs, rents in both primary and secondary shopping centres and high street locations have continued to edge upward.

This trend is expected to persist over the next 12 months, particularly in the most sought-after locations where competitive bidding among qualified tenants enables landlords to be highly selective.

Outlook Retail Market

In 2026, retail sales in Hungary are expected to continue expanding, supported by rising real wages, improving purchasing power, and growing disposable incomes. Foreign tourism will remain a key demand driver in the highstreet retail segment, benefiting not only Váci utca and Fashion Street but also strengthening locations such as Andrássy Avenue, Fehérhajó utca, and Szervita Square areas that are either emerging or have experienced a prolonged period of decline over the past 15 years.

Beyond high streets, discount retailers, along with brands in the health & beauty and sports fashion and equipment segments, are expected to continue expanding across Budapest and major regional cities. Consumer demand in these categories outperformed the overall market in 2025, a trend likely to persist and potentially place upward pressure on rents, particularly in retail parks where such retailers are most active.

Despite these positive demand dynamics, the retail sector continues to face structural challenges, including elevated operating

costs—most notably rising wages, sectorspecific additional taxes, and high commercial energy costs. In this environment, retailers that successfully adopt omnichannel strategies and offer experiential retail concepts are expected to gain a competitive advantage.

The introduction of the OtthonStart subsidised interest rate scheme is expected to accelerate out-of-city family home and apartment development in areas with currently limited retail provision, creating favourable conditions for future retail park developments.

In the food & beverage segment, leasing activity moderated slightly in 2025 following an exceptionally strong 2024, as many operators focused on consolidating and optimising their existing networks. Nevertheless, demand remains robust for drive-thru fast-food locations, particularly among major international brands such as KFC, Burger King, and Starbucks, as well as newer market entrants including Simon’s Burger and Popeyes.

Demand remains strong for drive-thru fast food locations, particularly among major brands such as KFC, Burger King, Starbucks, and newcomers Simon’s Burger and Popeye’s.

Kata Mazsaroff

Managing Director

+36 30 661 8777

kata.mazsaroff@colliers.com

Research

Kristóf Tóth

Associate Director, Head of Research

+36 20 859 0214

kristof.toth@colliers.com

Capital Markets

Balázs Zelles-Görgey

Director, Head of Capital Markets

+36 70 383 3809

balazs.zellesgorgey@colliers.com

Occupier

Miklós Ecsődi Director, Head of

Industrial

Director, Head of

+36 20 933 3943 tamas.beck@colliers.com

Retail Agency

Anita Csörgő

Director, Head of Retail +36 70 310 0547 anita.csorgo@colliers.com