Budapest, October 8, 2024 – Are Hungarian office tenants planning to relocate? How has hybrid work changed employee expectations? What challenges arise from generational differences in the workplace? And how important are ESG considerations for tenants today? These were the key questions addressed by guest speakers Valter Kalaus, MRICS, Managing Partner at Newmark VLK, and Gábor Babus, Real Estate and Construction Law Leader at Deloitte Legal Göndöcz and Partners, during the first autumn session of the AmCham Workspace and Facilities Management (WFM) Committee.
In his opening remarks, Zsolt Kákosy, MBA MRICS, Senior Director at ICON Real Estate Management and Chair of the AmCham WFM Committee, emphasized that 14% of Budapest’s 4.4 million square meters of office space currently remains vacant. The trend of increasing vacancy may slow down, as few new office buildings have been built in recent years, and even fewer are currently under construction. This means that high-quality locations are gaining in value, and there is already a line forming for modern, well-located office spaces with extensive services.
The M76 is a visionary investment that, thanks to its mixed use, can flexibly adapt to urban lifestyles – as highlighted at the professional event introducing the development.
“The market is in a strange state. The crisis brought on by Covid is over, but its aftereffects remain with us. We’re seeing new shifts in international trends. For example, while Amazon’s move to call employees back to the office hasn’t yet reached our region, it will likely impact local work culture in the medium term,”
–said Valter Kalaus.
All three experts agreed that as long as labor shortages persist, employees are in control. A whole generation that started working just a few years ago has barely set foot in the office, whereas older generations often don’t understand why office presence is no longer mandatory. Since most companies now operate with multiple generations working together, it’s increasingly difficult for tenants, landlords, and facility managers to reconcile these differing expectations.
“The solution? We need to offer something new, something different to entice people back. We have to create work environments employees genuinely want to return to. Today’s modern office must rival the comfort of a living room, the style of a hotel lobby, or the vibe of a café. That’s what the younger generation is used to—where they felt good, where they worked for years—and now we need to win them back from that environment,”
–stressed Valter Kalaus.
Gábor Babus also pointed out that while employees value employer branding and extra services provided by office buildings, tenants are focused on cost-efficiency. And today’s market conditions are not ideal for relocations.
“80% of current new contracts are about staying put—either lease renewals or extensions. But this doesn’t mean companies lack the funds to move or upgrade; most are simply waiting due to market uncertainty. That’s exactly why businesses shouldn’t be afraid of relocating now—those willing to act can secure excellent conditions,”
–emphasized Gábor Babus.
