The rental revenue for the first three quarters of 2022 reached EUR 11.59 million, and the pro forma net profit reached EUR 4.31 million, which is about 6% and 18% higher than the same period of the previous year respectively, according to the third quarter report published by the Budapest industrial park Graphisoft Park.
The favorable result is primarily the result of high occupancy, a stable contract portfolio and the euro based, increasing indexation of rents. The high degree of uncertainty regarding office vacancies that arose as a result of the coronavirus epidemic has significantly eased by 2022, even with the rise of home office and hybrid working. Graphisoft Park's flexible office space, located in an inspiring, green environment and with many communal spaces, has seen a solid increase in demand over the past year, with occupancy increasing steadily to 98% for the third quarter.
However, the drastic increase in energy prices presents another challenge for the office market: the significant increase in utility costs imposes extra burdens on tenants, and therefore a decrease in demand for office space and a temporary increase in the vacancy rate must be expected again. At the same time, in the case of the tenants of Graphisoft Park (which are mostly technology and knowledge-based companies employing highly qualified employees), personnel costs still make up a significant part of the total costs.
Therefore, the increased utility costs – despite the drastic increase – represent only a small proportion from the total costs for the majority of our tenants. However, it is unavoidable that requests to reduce utility fees will arise, so to optimize office use and energy consumption, Graphisoft Park supports tenants with investments, renovations and modernizations that support energy efficiency, the flexible conversion of office areas, and the rationalization of energy consumption per building.
During its modernization and renovation work, which began in 2017 and has been carried out systematically over the past years, the Company took environmental awareness and energy saving as its basis: it installed more efficient building mechanical equipment and lighting fittings in the buildings and optimized the operation of the building's automation.
“As the tenants did not request any significant area reduction until the preparation of this report, and the expiring contracts were continuously renewed, based on the above, for the whole of 2022 - increasing the previously published forecast by an additional 200 thousand euros – we expect 15.4 million euros rental revenue and EUR 5.6 million profit after tax, that is 5% and 16% increase respectively compared to prior year. In 2023, despite recession forecasts, high inflation, and the resulting uncertainty, we expect further smaller growth compared to this year: rental revenue of EUR 16 million and a net result of around EUR 6.1 million,” the quarterly report states.
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