Thanks to an exceptionally strong December, the CEE region’s investment market again crossed the EUR 10 billion mark for the year.
The total volume was 50% higher in 2024 than in the previous year, and investors expect a further 15-20% growth for this year as a market recovery accelerates as the year proceeds.
Last year, retail real estate was the most attractive sector; this year, logistics could be the most appealing, CBRE believes. Experts expect EUR 700 million-800 mln of real estate investment across all segments in Hungary this year, up from EUR 300 mln last year.
“According to our property investment survey, most people in Western European markets are looking to invest in rental housing, but there is also a very optimistic mood for hotels. Last year, a third of Central Europe’s turnover went into retail property, and this year, logistics is the clear favorite and could drive the markets. The perception of office is unfairly negative, although, at current pricing, there are good opportunities for entry, especially as development volumes are low across Europe,” said Gábor Borbély, CBRE’s director of market analysis for Central Europe.
“This year could be the year of logistics in real estate investment in Hungary,” reckons Tim O’Sullivan, head of capital markets at CBRE Hungary. “We are currently working on real estate sales totaling almost half a billion euros, and the total annual turnover could easily be much higher, as there is a higher volume of products for sale, for example, in the case of offices,” he says.
“The coming months will be filled with active marketing for everyone to ensure that as many transactions as possible reach the finishing line and that they can then increase this year’s investment turnover,” O’Sullivan concludes.
The drug store chain Rossmann says it has commenced the installation of advanced system technologies at its latest logistics hub. The facility has been handed over by the developer, Panattoni Hungary, and owner, OTP Real Estate Investment Fund.
The HUF 20 billion project, one of the most significant build-to-suit agreements in 2023, reached this milestone in just 11 months, according to Panattoni. The 28,000 sqm warehouse in Üllő (just 28 km southeast of Central Budapest by road), which includes a 4,000 sqm, three-story semi-automated racking system and a 4,000 sqm office building, is due for full completion in the third quarter of this year.
“This project posed a highly complex challenge, and we consider it a remarkable achievement to reach this phase on schedule, allowing Rossmann to commence the installation of its technological systems,” says László Kemenes, managing director of Panattoni Hungary, on the project.
“This collaboration highlights Panattoni’s unique market position: our BTS projects are not only developments but also significant investment transactions, which are particularly valuable in today’s cautious market environment,” he notes.
András Farkas, head of project development at Rossmann Hungary, was equally pleased, noting: “Delivering a project of this magnitude requires precise, coordinated work from all parties involved.”
He adds, “We highly appreciate our partner’s adherence to the deadlines set out in the lease agreement. We engage daily with the general contractor, developer, and landlord to discuss planning and implementation, as our active involvement is essential to the project’s success.”
The selection of an interior contractor for the office space is currently underway, to be followed by the preparation of tender documents for the kitchen’s operational and technological requirements.
The complex is being developed under a forward funding agreement with OTP Real Estate Investment Fund. Operations are expected to begin in early 2026.
The hotel market in Budapest continues to thrive, with the upmarket Ruby Hotels signing a lease agreement at the recently renovated Corvin Palace in Blaha Lujza tér for the hotel group’s first venture into the Central and Eastern European region.
The 181-room luxury hotel on four levels with a rooftop lounge and bar will be the final tenant at the historic building. CBRE represented the owners in negotiating the lease agreement.
“Our newest project will be housed in the historic Corvin Palace, Budapest’s oldest department store, built in 1926. The ironic landmark will be re-imagined into a vibrant hub for retail, dining, culture and seamlessly blending Ruby’s signature style with the city’s rich architectural heritage,” comments Oliver Balogh, co-owner and developer of Corvin Palace, on the deal.
The latest international hotel brand to enter the Budapest hotel market is seen as taking advantage of the unique opportunities provided by the conversation of existing buildings in European city centers.
“The hotel market in Budapest shows sustainable growth and offers a lot of potential for our ‘Lean Luxury’ hotel concept, which we believe will fill a gap in the market for stylish, high quality, yet affordable hospitality options,” says Elena Gunther-Jakobs, associate director for development in Northern Europe and CEE at Ruby Hotels. The hotel chain currently has a portfolio of 20 hotels, with a further 12 in the pipeline.
Time Out Market Budapest will also open in Corvin Palace this year, creating what it describes as a “food and cultural market that brings the best of the city together under one roof: a curated mix of the best local and homegrown chefs, restaurateurs, drinks and cultural experiences.”
Balogh of Corvin Palace concludes: “We believe we have found the perfect tenant mix for our heritage building to celebrate its 100th Birthday.”
In a strategic partnership with Recorde Asset Management, the Forestay Group has purchased Váci utca 81 for redevelopment into a 200-plus key upper-midscale hotel and apartment hotel.
“This property offers a unique opportunity to integrate cutting-edge technological concepts into a historically significant location. Our vision is to transform obsolete structures into a sustainable high level that meets future market demands,” comments Bálint Botos, managing director of Forestay.
This article was first published in the Budapest Business Journal print issue of February 7, 2025.
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