Spreading the SSC net to Secondary Cities

The Hungarian Investment Promotion Agency has successfully promoted and attracted companies to Hungary as a quality but cost-effective SSC destination. More than 120 SSCs are operating in Hungary, making it the second-largest industry in Hungary, according to KPMG.

SSCs are undertaking increasingly complex functions such as R&D, well beyond a purely administrative role, and, therefore, SSC and BPO tenants have evermore sophisticated specifications with higher sustainability accreditations. All of this means companies are looking to base SSCs in offices at the very top end of the office market.

In the first half of 2021, IBM agreed to a 14,500 sqm deal with Futureal to establish a new Budapest headquarters at the BREEAM- and WELL-accredited Corvin Innovation Park.

From a real estate perspective, the essential requirement has been that there is a stock of well-located, developer-led class “A” office space with a premium on direct public transport links and quality interiors that facilitate the wellbeing of staff and high productivity.

There is now a further emphasis on anti-virus provisions and internal organization that facilitates this. Companies increasingly need to consider issues relating to hybrid models of office and home working and the property and facility management considerations necessitated by the post-pandemic working environment.

The Váci Corridor is regarded as an excellent SSC location that has transformed District XIII into a significant business sub-market with its direct metro links, accessible residential area, and easy access to the urban infrastructure. The South Buda area is also attracting several SSCs, although it has no direct metro links.

Nordic Light Trio interior.

Global Support

The international pharmaceutical company Roche Services (Europe) has established its headquarters at the 14,000 sqm Nordic Light, designed by Paulinyi & Partners on Váci út. The office has more than 1,000 employees and provides global support and consultancy to more than 120 Roche subsidiaries in finance, procurement, human resources, and IT processes.

The building is among the first to receive WELL certification in Hungary. “This milestone is another proof that Nordic Light Trio is one of the most sustainable, healthy, and inclusive office buildings in the country,” says András Ábrahám, project director of Skanska’s commercial development business unit in Hungary.

“WELL-certified buildings have a positive impact on employees’ performance and therefore on the overall performance of their employers as well, retaining their value for an extended period and being truly futureproofed investments,” he explains.

“The pandemic reaffirmed the need for healthy workplaces built with great care. Skanska created bright, comfortable, and flexible working areas that benefit the health of office users. The carefully designed building makes it easy to implement health and safety measures that affect how employees feel when coming back to their workplaces,” Ábrahám says.

“The building has highly effective ventilation and air filtration system with microbe and mold control; water quality is also constantly controlled and monitored. Excellent lighting conditions have been created in the workplaces thanks to the electric light glare control. The offices are designed to provide a pleasant temperature all year round and create a calm, noise-free environment for work,” he adds.

According to Atenor, which aims to attract SSCs to its projects, business complexes are expected to integrate into their surroundings by offering services, public squares, and green areas that provide a mutual benefit to the development and the surrounding areas.

The most crucial factors for an SSC office are the proximity and variety of public transport, various amenities within walking distance, the business nature of the district, and accessible green areas nearby. Concerning transportation links, the most favorable is a metro within 400 meters. 

Brownfield Site

Futureal is developing the phased, 65,000 sqm, BREEAM and WELL accredited Budapest One Business Park located on a brownfield site at a transport hub at Etele tér adjacent to the Kelenföld railway station and the Metro 4 station. It will house both Vodafone’s new headquarters and BT’s regional service center.

“Once completed, Budapest One office park will expand the capital’s office market with a total of more than 65,000 sqm of leasable area,” says Tibor Tatár, CEO of Futureal.

“Due to the coronavirus epidemic, employees’ expectations have changed; therefore, companies must focus on spaces that encourage creativity, collaboration and provide a comfortable, healthy, and safe environment. There is still a strong market demand for office buildings that provide high-quality and human-centered solutions,” Tatár adds.

HIPA is promoting second-tier cities such as Debrecen, Pécs, and Szeged as suitable for establishing SSCs following the success of secondary centers in Poland and the Czech Republic in doing just that.

In addition to developer-led class “A” office accommodation, cities require a strong university background, an available qualified workforce, and a modern business infrastructure. This, in turn, attracts office developers to the cities, creating a speculative office development market outside of the capitals.

This also facilitates young people being able to achieve a high standard of living without the necessity of relocating to the bright lights of the capital. Debrecen is seen as being particularly successful in this sense, not least because the municipal government is aware of the enormous potential of SSCs and has worked to promote the city.

This article was first published in the Budapest Business Journal print issue of November 19, 2021.