“HB Reavis usually constructs high-end ‘A++’ category offices, and these are the only ones in Hungary,” says Mazzá. He adds that the Hub buildings are the only Breeam ‘Outstanding’ offices in Hungary, making them the greenest in the country.
“Agora has around 94-95% occupancy. Our core tenants are Raiffeisen, BP, Huawei and B+N,” Italian national Mazzá says. Raiffeisen established its Hungarian HQ in Agora, while BP transferred its Global Business Services office.
“We had to revise our strategy. The environment was constantly changing, not only COVID but also the war [in Ukraine], and the pricing of constructions and raw materials has increased substantially. It’s been a difficult transition for all developers in Hungary,” Mazzá explains.
The remainder of the Agora plot was sold to MBH Bank for its new HQ. But Mazzá says HB Reavis choosing not to complete the campus development (near the busy Róbert Károly körút and the Váci út office corridor) should not be seen as a lack of commitment to the market so much as a redefinition of its plans.
“We don’t just want to be one of the best developers in Europe; we also want to be one the best asset managers. This is our next step, our focus. We are heavily invested in it, strategizing around it, and doing everything we can to achieve it,” Mazzá says.
“Everything we do is to ensure that our tenants are fully satisfied with our services and that our buildings maintain that state-of-the-art status. We must become one of the best asset managers and the most efficient out there.”
One obvious indication of that is the More app the company has developed for its tenants to access services. Mazzá estimates that the developer puts on a couple of hundred events a year, for which it has a dedicated team. The list is impressively long, a random sampling of which includes wine-tasting, makeup lectures and courses, book swaps, portrait photography, pearl beading, yoga classes, bike repair events, rooftop movie night, farmers market, thrift shops, health checks and blood donations.
The reception does not go by that name; Agora has a concierge “because we basically offer the services you would find in a premium hotel.” That might be providing an umbrella, a bicycle or rollers, arranging for suit cleaning, booking a hotel or restaurant and calling a cab. You could order a courier, a cake, or some flowers, and you can even pay through the app, should you wish.
“The ultimate goal is to facilitate the tenants and their clients’ lives as well as to ease these processes to generate a more time-efficient environment in their everyday office life,” Mazzá says.
“We work closely with the tenant management to give these added-value things, so employees are happy to attend to the office more often. Whenever there is an issue for the tenants, we try to support them.” Another service offered in Hungary is the Qubes brand of flexible, serviced offices.
“We opened three floors of 5,000 sqm, and in a serviced office such as Qubes, that implements around 600 desks. [….] We have maintained above 80% occupancy for the last three years. Also, in 2022, we managed to lease 200 desks to one client, defining the largest services office transaction in Europe that year.”
The nature of serviced offices makes it harder to reach full capacity, but there have been some real success stories.
“We’ve had a client that arrived here with 12 desks, grew to 140 in two years, and then moved within Agora. This is fantastic; a client moved in and liked us so much as the landlord and the product and things that we do that, instead of moving away, they remained with us and signed a long-term traditional lease. For us, it’s the proof that we not only did well in constructing and designing the product, but we’ve been good as hosts and landlords with services.”
Parmar Abhishek, head of sustainable development for HB Reavis, based in the London office, also answered our questions about the company and its sustainability stance.
BBJ: What role does ESG play in HB Reavis developments? What third-party accreditation agencies do you use and why?
Parmar Abhishek: ESG plays a pivotal role in HB Reavis developments, influencing every aspect of our operations as an integrated developer that handles design, construction, and asset management in-house. ESG principles are deeply ingrained in our processes, with each department actively contributing to our ambitious carbon emission reduction goals, aligned with the Science Based Targets initiative (SBTi) 1.5°C pathway.
For third-party accreditations, we ensure that all new buildings achieve at least a Breeam, Leed, or DGNB certification at the highest level appropriate for their location. Additionally, all new buildings aim for the Well Building Standard certification at the “Platinum” level, reflecting our commitment to the highest standards of tenant health and wellbeing. Other certifications may be pursued on a case-by-case basis, depending on the project location.
BBJ: What do you expect to be the next significant steps for the industry in ESG?
PA: In response to growing ESG demands, the commercial real estate industry is poised for transformative advancements. Whilst EU Taxonomy has already brought about the reporting requirements through CSRD for listed companies from 2023, we know that enhanced transparency and reporting for non-listed and SMEs will become crucial, with detailed disclosures on environmental and social impacts aligning with global standards like GRESB and TCFD.
The sector will also harness advanced technologies such as AI, IoT, and blockchain to boost sustainability and transparency. Social aspects will gain prominence, emphasizing community engagement and inclusivity in real estate projects. A shift towards regenerative practices will focus on creating buildings that positively impact their environments and communities. As regulations tighten, compliance will become more integral, affecting everything from construction to operations and tenant interactions.
Finally, financial structures will evolve to support ESG compliance more robustly, with mechanisms like green bonds and sustainability-linked loans becoming more prevalent. These steps are integral to the industry’s commitment to sustainability, social responsibility, and robust governance.
This article was first published in the Budapest Business Journal print issue of May 17, 2024.
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