Retail market: conformity and waiting


The retail market in Hungary continued to show signs of stability in the first half of 2011 after reaching this state last year, with market players settling into their groove and awaiting the inevitable rebound, the latest market report by Colliers International Hungary reads.

“The market shows a mixed picture, with some locations, especially well-situated projects with a clear strategy, developing and even thriving, while other shopping centers are still struggling with the effects of the crisis,” said Szabolcs Koroknai, associate director at Colliers.

Domestic spending showed no discernable change in the first months of the year, with official statistics indicating stagnation in retail turnover compared to the same period of 2010. No positive effect was seen from personal income tax changes implemented at the beginning of the year, and it seems the climb out of the current situation will be a prolonged one.

The first half of the year saw only one major retail center opening, the 5,600 sqm Europeum on Blaha Lujza tér, developed by ABLON. The project has seen success in its first months, with solid turnover and over 80% occupancy, from tenants such as H&M, Müller and Deichmann. The project can be considered more of a high-street venue than a shopping center. It has also gave new life into the surrounding area of Nagykörút, with several new shops opening in the vicinity.

Retail activity has also started to return somewhat to normal on the section of Nagykörút leading from Nyugati tér to the Margit híd, as the latter was reopened to traffic following reconstruction works. The number of vacant shops here has decreased as tenants return to business.

In October, ORCO’s landmark Váci1 (11,000 sgm GLA) will open its first three floors, offering shops such as Hard Rock Café and a flagship shop for local patisserie Szamos Marcipán, as well as Pinko and Vilebrequin. The second phase, to follow in autumn 2012, will open the upper floors of the building, including a rooftop lounge restaurant and a special tourist attraction occupying the entire 1,700 sqm fourth floor.

The KÖKI Terminál (55,000 sqm) the Árkád Szeged (34,000 sqm) and Siófok Pláza (6,000 sqm) are also planned to open by the end of the year. However, finding tenants has become more difficult, with owners often having to provide fit-out contributions in order to attract retailers.

Luxury goes

Budapest’s dominant high streets Váci utca and Andrássy út remain popular targets for retailers, especially luxury brands, and have seen a pick-up in activity, especially Andrássy. Sinequanone and Replay have opened new stores here, and there are also several contracts currently under negotiation for new, international top-quality brands.

Andrássy also has a beneficial effect on surrounding areas, with a few connecting streets (Paulay Ede, Hajós, Nagymező) beginning to see some tenant activity as well, especially for local eclectic and designer retail concepts.

Koroknai said that rents are still generally low, having fallen between 10–30% over the last two years, but the best sites have been able to maintain or even increase their rent levels. One such positive example is MOM Park, which has been able to attract new, high-quality tenants at rents that are in some cases substantially higher than what previous tenants paid. Brands set to open new shops here include French Connection, Stefanel, H&M and Vapiano. Other similar positive examples are Mammut and Arena Plaza.

Additional pipeline shopping center supply will be delayed until 2013–2015. There will be greater activity in the next two years for older centers to refresh themselves in design and concept to attract new tenants, the report says.

“Such project underway is the overhaul of the former Material Center, a home furnishings shopping mall in Budapest into a downtown outlet centre, the Grand Fashion Outlet (GFO), set to open in spring 2012. Colliers International is the project’s exclusive consulting and letting agency. This will be the first concept of its kind in Budapest, an easily accessible fashion outlet centre occupying 8,000 m2 on three levels of a mixed use building, located in the city centre rather than in the suburbs,” Koroknai said.

Parents Spend HUF 5,000-10,000 on Children's Day Figures

Parents Spend HUF 5,000-10,000 on Children's Day

EC Advances Infringement Procedure Over Hungary's Sovereignt... EU

EC Advances Infringement Procedure Over Hungary's Sovereignt...

Hell Energy Inaugurates HUF 80 bln Capacity Expansion Manufacturing

Hell Energy Inaugurates HUF 80 bln Capacity Expansion

Puskás Arena to Host 2026 Champions League Final In Budapest

Puskás Arena to Host 2026 Champions League Final


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.