The future of well-diversified portfolios
Diófa Asset Management has showed a significant increase in the past three years, and with major property investment deals the company has become one of the largest local investors in Hungary. We asked László Vas, investment director, about the market and the future.
László Vas, investment director.
Where is this turbulence coming from?
Diófa Asset Management has a strong and stable investor background as we manage four real estate funds: besides the Magyar Posta Takarék Real Estate Investment Fund, which is Hungary’s second largest domestic open-ended fund, we also maintain three private real estate funds established for institutional investors. We have transacted a total of EUR 320 million in property investment in the past 2.5 years and we hope more is yet to come.
Everyone is talking about international investors who are finally back again on the Hungarian market; what is your experience on the investment market?
Hungary offers competitive yield volumes and stable assets in the region. The market has changed significantly during the past five years and beside the fact that the competition has become stronger, more assets are present on the market, providing opportunities for growth. We are proud that we could close significant transactions in the office sector by purchasing the newly-built V17 office building and expand our portfolio in Infopark with a second office scheme. Beyond offices, our focus in 2016 has definitely been on the retail market. In total, we currently manage a portfolio of 230,000 sqm GLA.
The retail sector is a very interesting and challenging market where we see opportunities to create value for our investors. Diófa Asset Management was responsible for 30% of the retail investment volume in 2016, and, in terms of deal numbers, we have been the leading company. We purchased the Europark first generation shopping center, and built a strip mall portfolio of 11 schemes countrywide.
What are the plans for 2017? Where will this strong investment appetite lead the market?
We expect a similarly turbulent year as 2016 has been for us. Given the size limits of the Hungarian market, it will be more and more challenging to compete with the aggressive investment strategy driven by international players. For us, our clients are in first place. For 2017 we plan to turn our energy on developments. We will remain active on the retail and industrial sector, while our office portfolio is profitable and stable with more than 90% occupancy. Our professionally strong team is dedicated to turning a first generation shopping center into a modern and sustainable shopping scheme. For our strip mall portfolio, a new brand will strengthen the asset value. We are proud of our achievements and of our local and international client base.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.