Real estate industry players expressed their worries about the government’s planned ban on major shopping mall developments, the Association of Property Developers’ Roundtable (IFK) said in a press release today.
Such developments currently require detailed feasibility studies anyway, the association reasoned, adding that they would welcome possible new regulations in the area given they were involved in the preparation process.
“It is important to know that today shopping malls cannot be built without any control in Hungary,” the press release said.
The bill, submitted by a member of opposition LMP party, would place a moratorium on shopping mall and hypermarket developments, as well as on supermarkets and other discount commercial units.
If passed, the law would only allow building shopping malls no bigger than 400 sqm in towns with fewer than 100,000 inhabitants, while in towns with larger population the size of shopping malls built after 2012 could not exceed 800 sqm.
According to the IFK, the ban would cause further setback in the already struggling construction sector, what's more, it would not back the government's employment plans.
“A shopping mall provides jobs for 1,000 people on average, while a hypermarket employs 400-500 people,” the IFK said. “Projects currently in the making, totaling in more than 300,000 sqm, are expected to create several ten thousands of workplaces.”
Retail has been the only area performing relatively well despite the worsening economic environment, the press release said. Decline in retail turnover has come to a stop last year, with steady demand. Lowering personal income taxes would result in increased retail turnover, the association projected.
“A suggestion that restricts further developments would significantly slow down recovery,” the IFK stated.