Budapest

Budapest is the most developed city in Hungary in terms of infrastructure. A network of tram, metro trolleybus, and bus lines efficiently connects the two sides of the Danube River, Pest and Buda. Liszt Ferenc Airport, located in the district of Pest, is the largest airport in Hungary and the main base of WizzAir. It offers a large number of connections to major European capitals.

Orsolya Hegedűs

Associate, MRICS, Head of Business Development Services, Cushman & Wakefield Hungary

Expert commentary

Hungary, particularly Budapest, has become a favoured destination for nearshoring in the CEE region due to its strategic advantages, including extensive transport infrastructure. The country has one of the highest densities of motorways in the region, significantly enhancing connectivity. Budapest seamlessly blends historic architecture with modern developments, reflecting its cultural heritage and urban growth.

The city’s public transportation system serves over a million passengers daily, encompassing metro lines, buses, trams, and trolleybuses. The metro, one of Europe’s oldest, has recently undergone upgrades for improved efficiency. Key tram routes, particularly the iconic yellow trams No. 4 and 6, provide vital links between residential areas and business districts. Liszt Ferenc International Airport (BUD) is a crucial regional hub, handling approximately 120,000 tons of cargo annually. The M0 ring road effectively manages traffic flow, while the city enhances cyclist infrastructure and pedestrian zones as part of its green initiatives.

Budapest is advancing its smart city strategy by implementing digital solutions to enhance urban services and energy efficiency. Plans include revitalising the Danube riverfront with parks and recreational spaces and promoting cycling through dedicated bike lanes and bike-sharing programs.

Budapest’s office market is robust, with office employment accounting for 34% of the population—the highest in the region. The Váci corridor is the largest office submarket, attracting international tenants, while the historically protected Central Business District (CBD) has limited Class A office space, making it the smallest submarket in the region. The city is also experiencing economic recovery, with tourism now constituting 13% of Hungary’s GDP.

Csaba Árvai

Managing Director at Raben Trans European Hungary

Expert commentary

From a logistical perspective, Hungary occupies a prominent place on the map of Europe thanks to its central geographical location and developed infrastructure, which makes the country particularly attractive to foreign investors. Its strategic significance is further enhanced by providing easy access to all parts of the continent, from the developed markets of Western Europe to the growing economies of the Balkans and Eastern Europe. The excellent transportation network, including highways, railways, Danube water transport, and international airports, enables fast and efficient freight transportation. The country’s strongest and most significant economic region is clearly Budapest and the central region surrounding the capital, which boasts the largest population, advanced office and public transport infrastructure, and an outstanding logistics background.

The Central Hungarian region, especially the immediate surroundings of Budapest, plays a prominent role as the country’s logistics hub. The capital is not only the economic engine of the country, but also an ideal location for logistics companies, as the most important transport routes meet here, such as the country’s largest international airport, Liszt Ferenc International Airport, and the intersection of north-south and east-west highways, which provides a significant advantage in freight transport. All major railway lines are located here as well, and one of the largest logistics centres in Central Europe, the Budapest Intermodal Logistics Centre, BILK.

In recent years, the central region has undergone significant development, particularly in the area of storage and logistics parks, equipped with state-of-the-art technology. Sustainability has also been prioritized – the state and municipalities are supporting energy-efficient and environmentally friendly solutions, such as the adoption of electric vehicles and renewable energy-powered warehouses. In the near future, the logistical role of the region and the country is expected to strengthen even further, driven by companies seeking to enter the European market (such as the Chinese automotive manufacturer BYD). These companies demand advanced logistical solutions, and their presence is supported across the board by the Hungarian government, ensuring mutual benefits between the country and the investors.

Tamara Szántó

Associate, MRICS, Head of Office Agency, Cushman & Wakefield Hungary

Expert commentary

Budapest’s office market has shown strong resilience since the pandemic, with office take-up increasing by 19% in 2023, building on gains of 10% in 2021 and 7% in 2022. This contrasts with declines in other European markets, where remote work has curbed demand. Despite positive growth, office demand in Budapest remains slightly below the 10-year average, reflecting adaptation to new work trends.

Budapest’s cost-effectiveness and strategic location, especially in the CEE region, bolster its office market performance. The city is a key player in the Business Services Centre (BSC) sector, hosting a large share of Hungary’s 201 BSCs, employing over 1 million people. The IT and finance sectors drive 72% of office demand, with long-term lease renewals common as businesses reassess their space needs. The ICT sector, in particular, is now the city’s largest industry, solidifying Budapest as a regional innovation hub.

In 2023, 103,000 sq. m of new office space was added, with 105,000 sq. m expected in 2024. However, net absorption remains below pre-pandemic levels, pushing vacancy rates higher, especially in older buildings.

With growing interest in sustainable, ESG-compliant offices, refurbishing or repurposing these older spaces is becoming more essential.

Currently, 445,000 sq. m of office space is under construction, with nearly 80% being owner-occupied. The market is increasingly focused on modernising existing spaces, with Non-Central Pest and South Buda leading new development activity, shifting away from traditional hubs like the Váci Corridor. Prime rents continue to grow, driven by demand for ESG-compliant spaces.

Entrepreneurs can count on the support of a number of business-related institutions . They provide entrepreneurs with economic and trade information on foreign markets, among other things, and foreign investors with information on the conditions and legal regulations for doing business on Hungarian territory.

Márk Fábián-Seremetyev

CFO, Owner at Asesor Consulting

Expert commentary

Budapest’s administrative support can be viewed from two main perspectives: one is the funding from the European Union dedicated to the city’s development, and second is the opportunities these and other resources create for businesses.

Below, I will explore these two areas. The first group includes TOP Plus funds, the goals of which are to implement the integrated territorial program of the capital in the Budapest area, including improving the livability of the capital through settlement development, green space infrastructure developments and human development programs. This also includes the development of social, healthcare, labor market and housing services, as well as subsidies.
The second category includes resources directly accessible to Budapest-based businesses, with digitalization playing a central role in their allocation. One element of the DIMOP Plus funds is to support innovative and smart economic transformation, accelerating the innovation activities and digital transformation of businesses and continuing the digitalization of public services.

This category also includes GINOP Plus funds, which aim to enhance the competitiveness of the domestic economy by strengthening the resilience of the SME sector, developing the R&D and innovation ecosystem, improving workforce adaptability, and ensuring a supply of skilled labor.

Closely linked to the directions mentioned above are the development of E-governance and the Digital Citizenship institution. These programs aim to establish a modern, efficient digital government ecosystem that prioritizes the user experience of citizens. As part of the initiative, unified framework services and planning support tools under the Digital Citizenship Service will gradually become available to facilitate administrative tasks for both public and private organizations.

In my opinion, the relatively low score of 5.6/10 assigned to this area reflects on the delays in EU funding over the past two years (2022–2023). However, as of Q3 2024, targeted support has been introduced and corresponding initiatives have begun.

Budapest is a strong academic centre, educating 125 000 students in higher education. One of the most prestigious universities in Budapest is Eötvös Loránd University (ELTE), a comprehensive institution known for its excellence in the humanities, sciences, and social sciences. ELTE consistently ranks among the top universities in Central Europe and attracts a large international student body.

The majority of universities have organizational units that engage with the business world. An example is ELTE’s Centre for Innovation, which aims to commercialize the results of research and development of the university. Corvinus University of Budapest holds international accreditations such as the Association to Advance Collegiate Schools of Business (AACSB) and European Foundation for Management Development (EFMD) certifications. Moreover, it is a member of numerous international organizations, such as the CEMS Global Alliance in Management Education, further strengthening the university’s international connections and reputation.

Anita Nagy

Head of Sales, Schönherz School Cooperative

Expert commentary

Budapest is home to several internationally recognized universities that offer high-quality education, particularly in the fields of medicine, engineering, and IT. Besides the high standard of education, the affordable tuition fees and the relatively low living costs also make Budapest an attractive destination for international students, with thousands choosing the Hungarian capital as the location of their studies each year.

International students studying here represent a valuable yet underutilized workforce, as many face significant challenges in entering the Hungarian labour market due to language barriers. However, for international companies and innovative startups, these talents not only provide a solution to the shortage of skilled workers but also offer a competitive edge in the global market.

For nearly thirty years, the Schönherz School Cooperative has supported the integration of non-Hungarian-speaking students through its internship and placement programs: It serves as a link to the job market, giving opportunities for internships and entry-level positions. This enables Budapest not only to be more than a significant educational hub but to also support international investments with its untapped labour market potential, promoting the city’s economic growth.

Based on the cooperative’s experience, employment rates in engineering fields are particularly high: young graduates with degrees in electrical, mechanical, civil, and architectural engineering are almost immediately able to find employment. The same is true for computer engineering and economics students, many of whom hold key positions even during their internship years, often leading to long-term employment offers.

Students who gain relevant professional experience during their studies are far more likely to stay with the same company long-term after graduation, providing valuable information for business decision-makers. Budapest offers not only a skilled workforce but also one that is loyal.

Imre Tüzes

Business Development Director at Profession.hu

Expert commentary

The centralised nature of Hungary also affects the functioning of the labour market: currently 18.7% of the economically active population (919 200 people) live in the capital^[1]. Since a significant portion of Hungary’s skilled workforce and the country’s most dynamic job market are concentrated in Budapest, employers must expect constant competition for high-quality candidates.

On Hungary’s most visited job portal, Profession.hu, 48% of job offers were located in Budapest in the first three quarters of 2024.

This trend is unlikely to change, as our survey conducted in September revealed that more than half of employers based in the capital plan to increase their workforce in 2025. By comparison, this figure is only 38% in the western part of Hungary and 35% in the eastern part.

Foreign workers living in Hungary also prefer opportunities in Budapest: according to official data, three-quarters of the more than 120,000 foreign workers in the country are employed in the capital.^[2]

This year, 13.5% of intellectual jobs in the capital were advertised in the finance/accounting category, 11.4% in administration, 10% in sales/trade and 7% in IT programming and development.

Our representative survey conducted during the summer of 2024 revealed that the proximity of the workplace is a priority for job seekers: the majority (64%) said that they had passed up applying for a job before because of the long commute. This attitude is especially true for Budapest residents (71%) and 18-29 year olds (79%). Another important factor in considering commuting may be that 57% of the workers in Hungary receive some form of travel expense reimbursement from their employers.

Budapest also stands out in terms of wages: there is a significant difference in average salaries within the country. An analysis by the Central Statistical Office (KSH)^[3] shows that while the average monthly net wage in the capital exceeds Ft500,000, only three counties in the rest of the country reach Ft400,000. In the other regions, average salaries are even lower.

The Hungarian capital is also a favorable location for employers with an international background, as 85.7% of the active job seekers in Budapest speak at least one foreign languages, primarily English (91.5%), followed by German (27%), French (5.5%), Spanish (4.8%), and Italian (4%) – according to our database.

In the 2024 fDi Intelligence ranking of European Cities and Regions of the Future, Budapest stood out for its cost-effectiveness, securing 8th place, ahead of cities such as Prague and Zagreb. Similarly, in Site Selection Magazine’s Global Best to Invest rankings, Budapest rose to third place in the Eastern European and Central Asian region, following Istanbul and Warsaw.

This success is highly attributed to Hungary’s record-breaking FDI inflows in 2023, doubling previously all-time high figures, further reinforcing Budapest’s growing reputation as a highly competitive and attractive destination for foreign investment.

Tomasz Lisiecki

Chief Executive Officer, TriGranit

Expert commentary

As the CEO of TriGranit, a nearly 30-year-old real estate development firm operating in the CEE region, I believe the future of Hungarian real estate hinges on multinational companies, sustainability, and international collaboration. Multinationals drive demand for quality office, retail, and residential spaces while attracting global investment.

Sustainability is essential; green investments, energy efficiency, and eco-friendly practices are now necessary, especially for meeting EU Taxonomy criteria. TriGranit is committed to upholding these standards and supporting well-being through our ESG-compliant developments across the CEE region.

Looking ahead to 2025, Budapest’s commercial real estate market will likely face ongoing challenges, although some areas may see a slight recovery. Vacancy rates for offices and industrial spaces rose in 2023, and with substantial new construction, these rates could continue to climb unless demand significantly increases, leading to potential oversupply.
Investment in the market dropped sharply in 2023 due to high financing costs, rising yields, and weak rental demand. While some stabilization might occur by 2025, investor confidence is expected to remain low unless the economy improves.

The hotel industry, buoyed by tourism, could continue recovering alongside economic growth and rising domestic demand. The retail sector might also improve as inflation eases and consumer confidence strengthens, boosting demand for retail spaces.

The industrial-logistics sector could experience long-term growth driven by foreign investments and capacity expansions. However, oversupply may hinder balance in the market by 2025.

Prime office property yields are rising, while capital values are declining. The supply of new office spaces in Budapest is highly constrained, which will ultimately lead to reduced vacancy rates in newly constructed buildings. Without improved demand and financing conditions, yields may continue to rise, and values could fall further, making it challenging for investors to achieve satisfactory returns.

Budapest is an attractive place to live. This city combines historical charm and youthful energy. It hosts a wide array of cultural and sport events. Budapest’s location at the intersection of Eastern and Western Europe has influenced its rich cultural heritage offering a unique blend of traditions, cuisine, and art. Its cultural richness, and modern business potential make Budapest a captivating destination where history and modern life seamlessly coexist.

Budapest in numbers:

• 5.4 million tourists in 2023, with 84% of being foreign tourists
• 342 tourist accommodation facilities
• 218 hotels in Budapest out of 271 hotels in the County of Pest
• More than 93 museums
• 250 parks, squares and green spaces
• 861 hectares of green areas