Market Talk: Developing a Growing Market

Office Market

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Some of the leading players in Hungary’s real estate market talk to real estate editor Gary J. Morrell about which are the most lucrative sectors, changing tenant requirements, the availability of assets and sustainability issues. Excerpts.

Nikolett Püschl 

Leasing and Development Director

Atenor Hungary 


Atenor Hungary is continuing its existing office projects in Budapest (Váci Greens and Aréna Business Campus) and Buda. In parallel, we are actively searching for plots for further new developments. We are focused on office developments, but we are open to enter the residential and/or retail market as well.  

It is not easy to source development sites but, as we have experienced, there is still significant potential in the various parts of Budapest. Recently, the biggest threat for tenants has been the lack of available, large modern, class “A” spaces where they can secure expansion areas, as most of the multinational tenants are going through frenetic growth. The good news is that developers clearly understand such challenges by delivering the appropriate amount of new supply.  

Atenor is a developer who is always thinking in the long-term. In all markets, recessions and expansions come and go, and we do not define ourselves as a player who only invests during good times; we were here during the crisis that started in 2008, and we are staying here in the future.  

We are confident that our ongoing projects represent value which meet with demand. Our successful leasing and sale results verify this strategy. Our development model remained unchanged: we purchase, develop, lease and sell and then start over again with new projects. The sale of Váci Greens E and F is in progress and Aréna Business Campus will soon follow.

Mátyás Gereben

Country Manager

CPI Hungary


CPI is a long-term asset holder and developer. In the Váci Corridor, we are due to complete the third phase of Balance Hall by the end of the year and we are waiting for zoning for a fourth phase of the project. In addition we have just completed a stand-alone, 13,000 sqm logistics building at our logistics park in the vicinity of the Ferenc Liszt International Airport. We see strong demand for logistics space, notably in the area around the airport. We have room for further development and could development on a speculative or built-to-suit (BTS) basis, although we are aware of a handful of BTS requirements on the market.

We are also working on the refurbishment/redevelopment of two buildings into a 160-room hotel on a plot in central Budapest. The location also offered the opportunity for office and residential development, although through our CPI Hotels business wing we see hotel as a fast-growing development option with the upcurve in the Budapest-Prague-Warsaw hotel markets.

The activity of CPI in Hungary has tended to divide between around 85% investment and 15% development. With regard to further office development, we have four-to-five offers for development plots in the Váci Corridor and I therefore do not consider that plots are difficult to source in the area.

An issue with regard to development is rising construction material and labor costs. Construction costs have risen by an annual 20-30% over the last three years. If a contract with a constructor was signed three years ago, this would represent a 60-90% rise in costs over the time period and the hope is that this tempo will slow down. Possibly less development activity in the public sector could free up labor for the private sector.

Balázs Czifra  

Director of Real Estate Investment

Diófa Asset Management


Diófa acts as an investor rather than developer in the local market and as such it is our core strategy to have a diversified platform. We still believe in all the major sectors (office, logistics, retail) performing in the long-term, although alternative sectors could also grow into such a position, for example hotel and student housing.  

We primarily acquire to grow our platform. Redevelopment and development is an option in well-defined available plots in our portfolio, or where the performance of the asset could only be improved via (re-) development, as happened for example with our Shopmark shopping center (formerly Europark).

Given the relatively stable tenancy in our portfolio, tenant requirements are a less crucial topic. However, ensuring a sustainable workable environment, for example by maintaining high quality property and asset management services, is a must. We also invest considerable amounts into adapting our space to changing requirements. The latest addition to our portfolio, an in-town logistics building, is suited to meet the logistics and online trading profile of our tenant.

We are careful to select the best matching architect to the individual product. Luckily, there is a good pool of experts any developer can select from.

The availability of quality assets have been limited in recent times. As several completions are delayed, there is not sufficient new product in general. Nevertheless, with a careful process, it is feasible to identify products.

Tenants have a better understanding of accreditation and what this could mean in the life of a building. Given that companies may find a limited supply of suitable and available space for their requirements, accreditation is a priority, but may be used in the assessment with a lower weight.

Dr. Gergely Árendás

Managing Director

Property Market


I think that the future is definitely in mixed-function developments. One of the main competitive advantages of employers over their competitors is the workplace environment and the surrounding infrastructure. Having workplaces, homes and services in the same project in a walkable environment adds enormous value to the customers’ everyday lives.

In addition to that, it is the sustainable way to build, as this reduces the carbon footprint of a project by requiring lower traffic capacity and produces lower emissions than monofunctional projects.  

Our primary goal at BudaPart is to provide residents, workers and visitors with all the essentials they need, while staying close to nature. All this makes everyday life simpler and more comfortable; thanks to a long-term, well-thought-out strategy and unique location, BudaPart will produce sustainable returns for investors.

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