Center owners are focused on redeveloping and upgrading their retail, leisure and service offerings to meet ever more sophisticated consumer demands. The retail park format, meanwhile, is becoming an increasingly popular investment option.
“Development activity will remain concentrated in retail parks, while Budapest’s established shopping centers and high streets are expected to focus on refurbishment, reconfiguration and attracting new international tenants,” comments Erika Garbutt-Pál, director and head of retail leasing at CBRE Hungary.
“The development of new retail formats in Hungary has been slower so far, partly due to the over-bureaucratized and constantly changing regulatory environment, which has stalled many developments or allowed them to be implemented [only] in a compromised format and size. As a result, the growth of the modern retail stock was significantly lower than that of its regional competitors,” she adds.
The CEE retail property market is, however, entering a new phase of its lifecycle. After three decades of rapid modern retail development, a significant share of the region’s shopping centers, retail parks and department stores are now 16-30 years old, and much of the retail real estate has reached an age where it requires new investment, according to Colliers’ latest “ExCEEding Borders Retail 2026” report.
“The region’s aging retail stock is not necessarily facing widespread obsolescence. Instead, the market is entering a major reinvestment and transformation cycle, with owners increasingly focusing on refurbishment, repositioning, tenant-mix optimization and selective redevelopment. The trend is particularly evident in the region’s capital cities,” the report finds. Budapest has the highest CEE share of modern retail stock over 15 years old at 84%, with Warsaw at 70%. Further, only 4% of modern retail stock in Budapest is between one and five years old.
“Development activity has remained subdued for more than a decade, constrained by the shopping center development moritorium (the “Plaza Stop” regulation), followed by prolonged periods of economic and regulatory uncertainty, elevated financing costs and construction inflation,” the Colliers report says.
Total retail completions for Hungary in 2026 are expected to reach 64,000 sqm, with a moderate 19,000 sqm under construction and due to be completed in 2027. However, approximately 157,000 sqm of retail space is in preparation beyond that, according to CBRE.
“Particular importance is the growing weight of Generation Z and Alpha. These generations are key drivers behind the growing demand for experiential retail. They increasingly seek a blend of shopping, leisure, and entertainment, viewing retail destinations as social hubs where they can spend time and connect with others. As a result, the ability of shopping centers to offer engaging, unique activities, and experience-led environments will be a critical factor in their future success,” says CBRE’s Garbutt-Pál.
The Westend Shopping Center, one of Budapest’s leading retail destinations for more than 25 years, has undergone a EUR 10 million development program, according to the owners, the GránitPólus Group, founded by the late Sándor Demján. The complex has achieved an “A+” energy rating, while the Crowne Plaza Hotel and the Westend Office Building have each achieved an “A” rating, meeting EU Taxonomy requirements. Westend is expected to obtain BREEAM In-Use “Excellent” and “Outstanding” certifications later this year.
As part of the transformation, Budapest’s largest rooftop solar park has been built, covering 6,500 sqm. The heating and cooling systems have been renewed, mechanical systems have been modernized, and an AI-based automated building management system now regulates energy consumption.
From a development perspective, new supply in CEE has continued to be driven by retail parks, reflecting a preference for accessible formats aligned with everyday spending and convenience shopping. The format is expected to retain a lead role in both development pipelines and retailer rollout strategies, according to Cushman & Wakefield.
The Zone retail park network, owned by the Magyar Posta Takarék Real Estate Investment Fund (MPTIA) and managed by Gránit Asset Management, is expanding its project in Budakeszi (14 km west of central Budapest by road) by developing a 4,290 sqm extension on a currently undeveloped site. This is the first new-build development under the Zone brand (currently present in 20 locations across 19 Hungarian cities, with two in Dunaújváros) since the nationwide integration of the portfolio earlier this year. Completion is expected in the fourth quarter of 2027.
“Functionality and sustainability were key considerations throughout the design process. The new building and its surroundings will provide an easily accessible location tailored to everyday shopping needs,” explains Eszter Kolozsi, the asset manager responsible for the project at Gránit Asset Management.
“We are applying modern, environmentally conscious solutions: the project is expected to include a ground-source heating and cooling system with approximately 30 geothermal probes and a 200-panel solar array, as well as a rainwater collection and reuse system,” she adds.
Retail parks have a lower critical mass than shopping centers and offer flexibility in lease sizes for tenants, often in areas of the country where modern retail provision has been limited. Several retail park formats are attracting investors, with portfolio acquisitions for assets across CEE, notably in Poland. Outside of the capital in Hungary, the CEE investor and developer TriGranit and DRFG Investment Group have acquired the 18,000 sqm Korzó Shopping Center in Nyíregyháza, seen as a dominant retail destination in eastern Hungary.
“For retailers already established on the Hungarian market, retail parks have become the preferred format because they are characterized by lower fixed costs, better parking facilities and daily shopping functions. The supply and development pipeline of retail parks is narrower than in Poland or Romania, for example. The strategy of retailers is increasingly focused on the ‘best houses’ in regions with strong purchasing power,” comments Garbutt-Pál.
This article was first published in the Budapest Business Journal print issue of October 19, 2026.
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