DVM Group Starts Construction Work on Drechsler Palace


Drechsler building hotel redevelopment.

DVM group has started construction works on the Drechsler Palace on Andrássy út. The listed-building, once famous as the home of the Hungarian State Ballet Institute, is owned by the hotel developer and investor QPR Properties, which is redeveloping it into the first W Hotel in Hungary.

The heritage building by the architects Ödön Lechner and Gyula Pártos was built between 1883 and 1886 in a French Renaissance and Neo-Gothic style. Although part of the Andrássy út UNESCO World Heritage site, it has been left abandoned for the last 19 years and several attempt to bring forward development plans have stalled over the years.

When the hotel sector will recover from its COVID-enforced shutdown remains to be seen, although the importance of the industry to national income cannot be underestimated.

Hotel development has also contributed to the redevelopment of the city infrastructure over the years, given a use value and enabled the renovation and preservation of several listed buildings, therefore enhancing the atmosphere and look of Budapest and other areas of Hungary.

“Our task is not only to authentically restore the much-deteriorated building and its interiors, but also to prepare it to meet the technical requirements of a luxury hotel,” comments Balázs Czár, joint managing partner of DVM group, on the project.

“Heritage protection is combined with a significant mechanical and electrical rejuvenation across all premises of the 16,000 sqm property. One of the two most prominent architectural changes in the building includes adding a fifth floor by transforming the roof into valuable hotel space,” he explains.

“This week we are finishing the professional demolition of asbestos roof covering and the removal of joists, and starting the complex roof reconstruction, complementing the original Lechnerian design with modern HVAC [heating, ventilation, and air conditioning] systems. We will also convert the courtyard to an intimate, protected, sun-flooded atrium using a state-of-the-art, doubly curved hyperbolic paraboloid glass surface,” Czár adds.

Significant Experience

According to the investor, Farshad Khazei, the future W Budapest Hotel will offer 151 guest rooms and suites, a signature W Living Room, restaurant, conference center, meeting rooms and events space, Away Spa and Fit fitness center.

That QPR Properties would mandate DVM group with the restoration work comes as little surprise. The latter has significant experience in redeveloping and renovating similar heritage restoration projects in Budapest including the Eiffel Palace and the Váci 1 building.

Looking at the wider hospitality sector, CBRE says it has traced a development pipeline of more than 2,000 hotel rooms in Budapest and more than 300 rooms in the regions outside the capital, due for completion in 2021, despite the pandemic.

However, this pipeline realistically needs to be questioned and revised downwards, with a significant proportion likely to slip back to 2022 according to analysts, due to the pandemic and the already intrinsically complex hotel development process.

Indeed, several projects have been put on hold with no new delivery dates announced. However, the pipeline remains strong and hotel investment discussions are expected to restart, increasing the potential delivery for next year in the view of many analysts.

“The restrained performance is expected to continue until the second quarter of 2021, with expectation for recovery to start in the second half. Supply growth is expected to remain limited and some projects are anticipated to experience delays due to COVID-19. Ongoing refurbishment projects will improve the quality of hotels for when the market returns,” concludes Cushman & Wakefield.

This article was first published in the Budapest Business Journal print issue of  March 26, 2021.

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