Will office rents in Bucharest and Budapest continue to underperform?

Having lagged over the past year, the improving economic backdrop should support office demand in Bucharest and Budapest in the coming few years. However, while we think high vacancy rates will limit rent growth in Budapest, we expect more upward pressure on prime office rents in Bucharest, where supply conditions are tighter. In fact, we think rental growth in the Romanian capital could outpace Warsaw over the next few years, though it is still likely to undershoot gains in Prague.