A Holistic Approach to Building Livable Communities
Architect-turned property developer Mihály Schrancz has an opportunity granted to very few: he gets to build complete communities. It must feel very rewarding, I tell him. “Look at my face,” he says, through a beaming smile.
The BudaPart development is significant on any scale. There will be a total of 27 buildings, 15 residential, with 3,000 units all told, and 12 offices with space for 23,000 staff. Five residential condominium buildings have been handed over, and two offices, BudaPart Gate and BudaPart City. Residential building “F” and BudaPart Downtown are under construction now and will include a hotel and retail units. The handover of the final building of the completed neighborhood is currently due for 2031.
“BudaPart is perhaps the largest, but certainly one of the most complex, projects in the modern history of Budapest, in terms of project budget, the number of inhabitants, and the number and complexity of development,” says Schrancz.
“Creating a business vision and coordinating the implementation of a real estate development project of this scale would be top league anywhere in the world.”
The development is emblematic of the evolution of city design over the past few decades. There has been a very definite move away from single-use or out-of-town projects. Schrancz says he takes a holistic approach to business, architecture, and city planning. He believes all three elements must work together to create livable cities on a human scale.
Central to this is the idea of neighborhoods. The “Downtown” development is the most obvious example at BudaPart, but not the only one. Groups of four or five buildings are clustered around what effectively become communal squares. Careful positioning and different heights create corridors offering lines of site for views and letting in more light, which in the end results in an increase in sales value.
Bordered by Dombóvári út and Budafoki út on two sides and Lágymányos Bay and the banks of the Danube on a third, the concept is to develop a Buda Business District here in District XI, a place where people can live, work, shop and eat in the same area, reducing the need to travel.
“From the very beginning, we imagined BudaPart not only as a unique living area but as one of the most important business districts of the city. At the moment, the Váci Corridor is the only spot in Budapest on the international real estate investors’ map, but BudaPart can be a new alternative since we have the same scale of offices. That’s why I came up with the idea of the Buda Business District brand,” Schrancz explains.
“If people do not need to move so far, they don’t need to use their car so much. We can reduce traffic congestion and air pollution. The question is, how do we make the change from a traffic city to a people city?” Schrancz believes this is the answer.
The developer cites the concept of the “15-minute city” put forward by the French-Columbian architect Carlos Moreno, and since championed by Paris Mayor Anne Hildago. It envisages a living and working environment with everything close at hand. It really began to gain traction around 2020-21, but Wikipedia says Moreno first proposed the idea in 2016.
“I am very proud to say we were already developing BudaPart here in 2016,” Schrancz says.
The idea of lots of communal squares almost inevitably conjures up the idea of Italian towns; indeed, Schrancz uses the word piazza and says he wants to fill them with public sculptures or design elements. That “Mediterranean” feel is not by accident, however. It has its roots in his hometown of Pécs, where he also studied architecture.
“We used to say there are more artists and architects per square meter in Pécs than anywhere else,” he jokes. “As I formed the development vision of BudaPart, I projected a neighborhood where pedestrians and not vehicles play the main role. In Pécs, people love to promenade. The city has many urban public areas and parks suitable for the evolvement of a community.”
Schrancz says real estate development as a profession still needs to be clarified. He likens it to the difference between making a film in Central Europe and the United States. In the former, the director is the most influential player; in Hollywood, the producer has the real power and makes the critical decisions, including hiring the director.
“Any investor, whether in the film or real estate industry, expects profitability in the long term. To fulfill this expectation, deep market knowledge is only the foundation. For sustainable profitability, I also have to think with the end user’s head,” Schrancz says.
He says his main focus is brand building and business planning and, as part of that, creating the philosophy and business vision of each project.
“I do the conceptual and development plan and then I give it over to my colleagues,” he explains. “I think my real added value is in doing the strategy and the vision, so I focus on this part. For most of my days, I deal with company building, HR issues, contracts. But we are a great team; everyone is motivated to create something lasting. The supportive background and trust of the investors, their exceptional business talent and ambition are key to realizing the developments.”
Schrancz was asked to lead Property Market (he was the first one hired) to develop BudaPart. The firm is now the country’s third-largest real estate development company with an active development portfolio of HUF 500 billion. It currently has 23 active projects. Schrancz has twice been voted among the 50 most influential real estate professionals in Hungary.
The 54-hectare plot had been owned by three Portuguese companies, who had acquired it from a Hungarian private investor in 2008, just weeks before the financial crisis hit. They had a master plan and zoning permission in place but had never been able to take the project forward.
Owned by Market Építő, one of the most successful construction firms in Hungary, led by the well-known businessman Sándor Scheer, Property Market was founded in early 2015 and closed the acquisition of the land in December of that year. Then began the process of drawing up an entirely new master plan and getting the various zoning permissions.
Not even COVID has derailed the plans since then, Schrancz says. “The leasing of the offices slowed down, of course. Interestingly, there were only two months back in 2020 when we could not sell as many apartments as before. Now we are really back at top speed.”
This article was first published in the Budapest Business Journal print issue of March 11, 2022.
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.