Strong Hungarian Presence at Annual Mipim Expo in Cannes

Office Market

Budapest-Hungary stand developers’ reception at Mipim 2023.

The Mipim commercial real estate and investment expo at the Palais des Festivals in Cannes attracted more than 23,000 participants from 90-plus counties, including delegates from Hungary and other Central and Eastern European countries.

Attendees included developers, investors, bankers, consultants, industry experts, architects, consultants, and city and country representatives. Delegates from financial institutions accounted for a quarter of attendees, according to Reed Midem, organizers of the expo.

This was the largest attendance in the post-pandemic period, representing a 15% increase in 2022, with evidence that physical contact in a conducive and pleasing environment like Cannes is still a preferred method of conducting business and making contacts for many companies and individuals.

Mipim is established as the primary annual commercial real estate event in Europe, along with Expo Real in Munich. The four-day event on the Cote d’Azur attracts a significant presence from the Central European region, including Budapest and major Polish cities, in addition to CEE representatives of the major international consultancies, promoting their respective countries. 

The Budapest-Hungary stand promoted investment in Hungary with a series of wine receptions and panel discussions looking at the booming industrial market, investment acquisition possibilities in the office, industrial and hotel markets in Hungary, and a focus on investment and development opportunities in Debrecen and Szeged.

Debrecen (220 km east of Budapest by road) is promoting itself as an industrial center, while Szeged (175 km southeast) is heralding its high-tech sector based around the University of Szeged.

The Budapest-Hungary stand was jointly organized by the Real Estate Developers’ Roundtable Association (IFK) and the Hungarian Investment Promotion Agency, with the Liget Budapest Project and the National Industrial Park Management and Development Company (NIPÜF) as featured exhibitors. The professional consultancy sponsor was CBRE. Guest of Honor at a wine-tasting reception was Georg von Habsburg, Hungary’s Ambassador to France.

The Budapest-Hungary stand.

Need to be Seen

Lóránt Kibédi Varga, managing director of CBRE Hungary, says there is a need for Hungary to be promoted through a stand as it competes for investment with Poland and the Czech Republic for office, industrial and hotel assets. This is seen as particularly important in more challenging economic times. In all, 11 companies were represented at the stand, with 90 people working in Cannes. 

One of the main talking points of delegates at Mipim is the ongoing yield readjustment in European investment markets due to geopolitical, economic, and financial factors that have resulted in a downturn in investment activity across the various markets. Vendors and buyers are unwilling to conclude deals in the current uncertain environment.

“With regard to investment transaction activity, the first semester will be quiet, not only in Hungary but across markets in Central and wider Europe. However, there are signs that the market will rebound and come back in the second half of the year,” comments Benjamin Perez-Ellischewitz, principal at Avison Young Hungary.

“Although there are not a lot of transactions happening, I would say that prime office yields stand at 5.5-5.75% and logistics at around 6.25-6.5%. On the basis of ongoing conversations, there has already been a 50-basis point movement out for Hungary,” he explains.

“The yield differentiation between Hungary and the Czech Republic is still 100-150 basis points. It is very difficult to say what total investment volume will be for the year, but I think that, for sure, it will be below EUR 1 billion, as the first months of the year have been very quiet,” Perez-Ellischewitz notes.

The other main taking point at Mipim was environmental, social, and governance issues that impact the whole development and investment process. Both Atenor and GTC commented on the need to develop office complexes in accordance with ESG principles.

That is timely, given the publication of the latest “synthesis report” from the Intergovernmental Panel on Climate Change, the scientific body that advises the UN on rising temperatures, bringing together all the most recent scientific findings and published on March 20. UN chief Antonio Guterres has called it a “survival guide for humanity.”

This article was first published in the Budapest Business Journal print issue of March 24, 2023.

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