The COVID-19 pandemic has not affected the Budapest office building site Graphisoft Park as badly as many other businesses, according to the Interim Management Report published this Thursday.
The first wave of COVID-19 crisis affected Graphisoft Park less seriously than earlier expected, however general expectations still show uncertainty for years 2020 and 2021, the report states. Majority of its tenants are prestigious and financially stable companies operating in the information technology or biotechnology industry, and therefore, Graphisoft Park Group might count with less decline in results compared to the general forecasts considering the entire office market.
The occupancy rate of the office park was 97% at the end of the first half 2020 (which was continuous tendency for more than 1 year), which will
temporarily decrease by 2-3% in the remainder of the year, partly due to the coronavirus crisis and partly certain tenant requests.
"However, we do not count with permanent decline in occupancy: in our
view, which is based on our tenants’ feedbacks, besides “home office” which became general practice during the lockdown, on longer term personal presence will be also required, which need offices offering high quality services. This is also reflected in the development of investment property fair
value: in the end of 2020 Q1, because of the increased yield (due to the uncertain economic conditions) and the revenue decrease caused by the expected vacancy, the fair value of rented properties decreased by 1.8 million euros, while in 2020 Q2 the fair value remained unchanged
compared to the previous quarter despite of the same increase in yield," the report highlights.
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