September 2014 www.resourceinfo.hu HUF 750
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CEE Property Forum 2014 25 September 2014, Hotel Park Royal Palace, Vienna
Moscow stormclouds cast a long shadow
INTERVIEW ANALYSIS OPINIONS FOCUS Alan Vincent, Office develop- CEE: mix of CEE developers managing director ment boom on risks and and develop- of ConvergenCE core CEE markets opportunities ments
_B1-REs-1409.indd 1 9/11/14 11:53 AM WHEN IT COMES TO YOUR OFFICE, HOW AMBITIOUS ARE YOU? D D O NOR NOR NO WIEN W WIEN NORD
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_B2-REs-1409.indd 2 9/11/14 11:48 AM REsource
OPINIONS What are the most attractive markets in CEE? How have the different markets been developing after the crisis? What are the risks on the various regional markets? CONETENT What opportunities do the different pricing 10 and yield spreads offer investors? Is it time for the real turning point for less favoured markets? What are the most attractive COVER STORY investment assets in Budapest? Leading The whole world is concerned about the escalating Russian-Ukrainian conflict and CEE experts share their opinion. the Cold War-like tension between the EU and Russia, and this dark cloud casts a long shadow on the CEE property markets’ performance as well. The markets of Ukraine and Russia, formerly coming increasingly into the crosswires of property market players, may be powerfully affected by the continuing crisis.The future is at the moment uncertain, the magnitude of the damage depending on how long the situation lasts. Fallback, however, is already perceptible.
5–9 Brief news ANALYSIS COVER STORY 28–29 Time for the real turnaround 26 10–12 Moscow stormclouds cast 29–31 Hungarian home loans: a long shadow rewriting the past INTERVIEW ANALYSIS 32–33 Some succeed, others don’t – All of the CEE markets have reached a level 14–15 Getting out of the woods Residental markets in CEE of maturity now, each market has its own particular characteristic. As such CEE 16–18 Improving macroindicators in 34–35 The Hungarian housing market can no longer be seen as a homogenous CEE countries is really reviving investment location. It’s clear that the 19–20 Spreading optimism in CEE 38–39 City developments in CEE Polish and Czech markets came out of the 21–22 Offi ce development boom in 39–40 A huge conference centre to be crisis in better condition than Hungary, but Warsaw and Prague built in Budapest comparing prime office investment yields OPINIONS with Warsaw at 6%, Prague at 6.25% I see LIST 23–25 Risks and opportunities - What Budapest as the most attractive location 36–42 do CEE markets off er? CEE developers and develop- with comparative yields for the best offices ments INTERVIEW at 7.25, Alan Vincent, B.Sc., MRICS, managing director of ConvergenCE belives. 26–27 Budapest: an attractive investment market
CEE PROPERTY 21 FORUM Vienna 2014 ANALYSIS The Warsaw and Prague office markets are regarded as thriving despite some concerns over vacancies. Some say that Poland as an almost “core” destination and Warsaw office stock is expected to reach five 25th September 2014 • Hotel Park Royal Palace, Vienna, Austria million sqm within the next three years. At
More information and registration: www.portfolio.hu/conference y [email protected] y Phone: +36 (1) 327 4086 the same time the Budapest and Bucharest
PARTNER: SPONSORS: office markets are showing signs of recovery after a period of limited delivery.
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HUNGARY’S LEADING, BILINGUAL REAL ESTATE MAGAZINE Katalin Major EDITORIAL Editor-in-chief//[email protected] Let’s see! What’s in store for the CEE?
After last year’s huge success, we are organising a conference together with RICS in Vienna for the second time, We are bringing 50 speakers – leading real estate experts MEMBER OF THE PORTFOLIO GROUP and opinion makers of the property world to share their views on the more and more exciting Central Eastern European property markets. In our event 200 top level real estate decision makers, CEE real estate professionals, real estate executives from IngatlanInfó Austria, the Czech Republic, Slovakia, Poland, Hungary, Bulgaria, Romania, Serbia RE SOURCE and Croatia will be discussing what this region has in store for investors, real estate For further news and analyses, visit our website! developers consulting fi rms.In honour of this event the current issue is dedicated to the www.resourceinfo.hu Central Eastern European (CEE) coutries, which are off ering more and more opportu- resourceinfo newsletter READ US DAILY//SUBSCRIBE@//www.resourceinfo.hu nities, but and also challenges. While the markets of the CEE region are of course devel- oping in diff erent ways, the general picture shows that optimism is spreading in the Editor-in-chief Katalin Major – [email protected] region: while the Polish and Czech markets continue to fl ourish, we have fi nally hit and Contributors passed rock bottom in less favoured markets as well. Less favoured – so far: the RICS Ákos Budai, Gergely Ditróy, David Lawrence, Bálint Nagy, István Palkó, Commercial Property Monitor for Q2 2014 revealed that most regional markets, slowly Tünde Madurovicz-Tancsics but steadily, seem to be getting out of the woods. In most Central and Eastern Euro- Advertising coordinator Krisztina Barta pean markets macroeconomic challenges infl uence real estate sentiment, but expecta- Translator tions are improving with a longer term outlook for capital values. Th is year is expected Adrian Bury, András Nagy
to be the strongest since 2006 for the Polish investment market, and there is a real offi ce Copy editor development boom in core CEE markets, despite some concerns of over development McLean és Társa Kft. and vacancies. At the same time the Budapest and Bucharest offi ce markets are on the Photo Lázár Todoroff , Shutterstock.com, MTI, Profi media.hu way to recovery. It appears that international investors are once again beginning to trust Sales in the more peripheral markets of the region, and despite rating the risks as high, they Attila Bacsa – [email protected] are chasing yield. And yield diff eneces between core and peripheral CEE markets are Publisher persuasive: looking at prime offi ce investment yields, for example, while Warsaw is at Zoltán Bán 6% and Prague at 6.25%, Budapest off ers 7.25%. NET Média Zrt 1033 Budapest, Polgár u. 8–10., Hungary At the same time a dark cloud casts a long shadow on the region’s performance. Th e Tel: (+36-1) 327-4080, fax: (+36-1) 327-4081 world is concerned about the escalating Russian-Ukrainian confl ict and the Cold War- E-mail: [email protected] like tension between the EU and Russia. Th e emergence of this crisis has a signifi cant www.resourceinfo.hu infl uence on the property markets in the two countries as well, which were previously HU ISSN 1419-4392 on the upswing. Th e signs can already be seen .
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Unusual deal on the Budapest Optimism on the Hun- offi ce market garian property market Th e Budapest property investment mar- Th e majority of real estate experts are now ket has been shaken up by a rather optimistic with regard to the future accord- BRIEF NEWS unusual deal: the Hungarian National ing to the latest Market Sentiment Survey. Bank (MNB) has purchased a premium It turns out from joint research by Eltinga, category, inner-city offi ce building. Since Portfolio.hu and RICS that in the premium August 1st the MNB has been the regis- segments of the offi ce market, not only have tered owner of the recently transferred rental fees reached the nadir, but they have Eiff el Palace Offi ce Building, located at even begun to rise to an extent clearly visi- 78 Bajcsy-Zsilinszky Road in the Inner ble to the naked eye. City. Th e title deed attests that the cen- Six months ago we reported that experts tral bank purchased the property from participating in the Market Sentiment Sur- Eiff el Palace LLC., and at the same time vey resulting from collaboration between this UniCredit Bank’s 28 million euro PICS, Portfolio and Eltinga are increasing mortgage was cancelled, as was its right fessional consensus is well above the mar- optimistic with regard to the investment of pre-emption. ket value of the offi ce block. market, with no-one now expecting dete- Th e MNB is at present in operation in a In an interview György Matolcsy, pres- rioration of morale. Th e optimism has con- number of properties, one of these being ident of the Hungarian National Bank, tinued to rise in this present survey: accord- the Krisztina Boulevard offi ce block spoke of a 6.5-7 percent yield level in ing to more than half of the respondents, housing the former Hungarian Finan- connection with the purchase of the the investment appetite on the domestic cial Supervisory Authority, for which the Eiff el Palace, which means that the cen- property market will improve. Based on the rental agreement will presumably expire tral bank really did pay a rather high price research, the Budapest yield levels continue in a few years, making it worthwhile for for a property. At least, market players do to be basically stable. Exceptions to this are the institution to look for another loca- not usually pay so much for a Budapest the lower category offi ces and retail proper- tion. Taking into account the present offi ce building nowadays. Th e 6.5-7 per- ties. In the top premium category which can business and yield environment it is not cent yield level certainly rates as very low be considered a reference point (top CBD - surprising that instead of concluding a (i.e. expensive) in Budapest today. We do Central Business District – building), 7.5 new rental agreement, the central bank not know of a transaction in recent years percent has been regarded as a stable con- has decided to purchase a property. where the yield level fell below 7.5 per- sensus for a relatively long time. Th e Eiff el Palace is an absolutely pre- cent. Th is is corroborated by the joint In the more expensive segments of the mium category offi ce block in district V; research of Portfolio and RICS and by offi ce market, rents have already begun originally opened in 1893, the building individual signifi cant open market trans- to rise: according to the experts polled, was revitalised by Horizon Development actions in the recent past. rental fees have increased both in the top with reconstruction launched in 2011. For that matter, this was not the fi rst CBD offi ce block and the premium non- Th e major tenant of the block is Pricewa- news in recent weeks about a prop- CBD offi ce building categories. One of terhouseCoopers, the offi ce building hav- erty purchase by the central bank. Th e the most important fi ndings of the pres- ing been let out to the extent of almost MNB bought a manor house located in ent research is that rents are perceptibly 70 percent according to the information Tiszaroff for 415 million HUF, and at the increasing in the upper segments of the available. During reconstruction the exte- end of last year the former headquar- offi ce market. A typical rental fee for the rior of the building regained its original ters of an organisation for the safeguard- top CBD offi ce buildings has increased by appearance, and the interior spaces, tech- ing of interests named the Hungarian 2 euros compared with the end of 2013, i.e. nical structure and building technology Association of Craftsmen’s Corporations it has already reached the 15 euro level. A system have been renovated on the most (IPOSZ) came into the possession of change in the cycle is also indicated by the up-to-date principles. the central bank – for 450 million HUF, fact that typical rental fees have begun to Th ere is little information available to according to press information. Th e four- depart from minimum rents, whereas in the public on the details of the transac- storey building, however, on June 18th of recent years precisely the opposite of this tion; according to an announcement by this year was passed on to its own, newly was observed. the central bank the property was pur- established educational-scientifi c foun- On the retail market, however, the cor- chased for 45.3 million euros (almost 18 dation, the Pallas Athene Domus Scien- rection in the rental fees has not yet stopped, billion HUF), which according to the pro- tiae Foundation. the fall has continued over the last six
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Th e south Klotild has changed hands before: in 2010 the local government sold it together with the Párisi udvar and 15 Szent István Square to one of the compa- nies of the SCD group – which has since gone bankrupt. But in the end the buyer BRIEF NEWS did not pay the purchase price, and the deal fell through.
HB Reavis sale in Prague
KLOTILD PALACE Th e HB Reavis Group has sold the Prague River Garden Offi ce I offi ce building to the months according to property analysts. values with respect to the rental fees and Prvý realitný fond (PRF) managed by IAD Together with this it is worth emphasis- transaction yields in that the median rent is investment. ing that typical rents for top shopping cen- divided by the median transaction yield for Based on the transaction the offi ce block tres are at the 2011 level, i.e. signifi cant fee each category (top CBD offi ce, city logistics may be valued at more than 50 million reductions have not come about in the pre- property, retail park, etc.). Th is calculation euros, which represents a derived yield of mium segment. Th is cannot be said, how- is performed for each category and various 6.5%. Th e River Garden Offi ce I opened ever, about retail parks and big box type weightings are coupled with the categories, in 2012, is located in the developing Kar- properties, where falls of 12 and 25 per- which represent their signifi cance within lin district of Prague and has around 19,500 cent respectively have occurred in the past the whole property sector.) square metres of rentable area. Utilisation 3 years. In both categories of the logistics is 100% at present, thanks to tenants such sector (premium out of town logistics real as Unilever, ADP, Monster Worldwide, estate, city logistics property) rents have A Turkish investor has Alpiq, Tengelmann or HB Reavis them- continued to fall, in the former case reach- bought the south Klo- selves. ing a round 3 euro level, and in the latter the 4 euro level has “fallen”. Th e fees in both cat- tild palace egories are at a nadir at present. Th e south Klotild palace has been sold; the Plaza stop: still an issue Participants in the survey were also asked monument has come into the hands of a about the results of the April parliamentary Turkish investor, the sale price being 2.15 Th e government is willing to make con- elections. According to almost half of the billion HUF. Th e buyer is Melis Invest- cessions in the issue of the ban on build- property experts the eff ect of the election ment LLC. belonging to the Özyer Group, ing large new shopping centres (the so- result on the international opinion of Hun- and a hotel will probably be opened in the called plaza stop), in order to dispel the gary is neutral, whereas it is positive accord- memorial building. Besides paying the pur- concerns of the European Commission. ing to around 40 percent. Less than 15 per- chase price, the buyer has had to undertake Th e Ministry of Justice has responded to cent think that the election results will have to renovate the building completely within all matters raised by Brussels on the plaza a negative eff ect on opinion of the country. fi ve years. stop issue, according to which the govern- At the same time, the Budapest Com- Th e local government invited entries for ment is willing to change certain elements mercial Property Index (BCP) which aggre- an open, international competition in sev- of the regulation but continues to insist on gates the results of the study has fallen to a eral legs for the local-government owned the paragraph banning the construction of new low. A slight rise may have been reg- part of the Klotid palace, empty since 2009, shopping centres larger than three hun- istered in the fi rst half of the year, but the and the present, third competition has dred square metres. Work on formulating present fall of more than 100 basis points been successful. Th e competition guide the modifi cations is already underway in has pushed the value of the index to under was purchased by four enquirers. Since its the Ministry for National Economy. 90. In contrast to the past three years, the foundation in 1948 the Özyer Group has Before this year’s European parliamen- fall was not caused by a reduction in rental been a group of companies in family hands, tary elections, the commission launched fees, but by the yield increase observed in which is the owner of seven hotels, and its infringement proceedings against Hun- the cheaper offi ce market and retail seg- activities have been expanded to include gary in connection with the restrictive ments. (Th e Budapest Commercial Prop- jewellery trade, property development, rules known as plaza stop. According to erty Index (BCP) incorporates the median media and energetics branches. the European Commission the regulation
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restricting the construction of shopping nomic College of the Budapest Region Tri- centres larger than three hundred square bunal have been doing their work in one metres is disproportionate, and in addi- building, in the M3 offi ce block owned by tion it is also considered problematic that CPI Hungary (formerly Ablon), as have the minister for national economy and the Budapest Region Administrative and not an independent authority is commis- Labour Court, the Executors’ Offi ce and BRIEF NEWS sioned to decide on any possible exemp- the Penal Group. CPI Hungary is a mem- tions. According to press releases, the Min- ber of the CPI Property Group. Besides istry of Justice sent a letter to the European Ablon, CPI bought the Endurance real Commission at the end of July, and the reg- estate fund in 2013, thus becoming one ulation may be altered depending on the of the most active investors in the CEE response to this. Hungary is prepared to region. Th e company group manages more review certain elements and conditions of M3 BUSINESS CENTER than 610,000 square metres of retail area, the plaza stop if necessary, to discontinue 407,000 square metres of offi ce space, 17 any possible disproportionateness and to Környéki Törvényszék). hotels (with 8,000 beds) and 212,000 avoid even the appearance of off ending EU Besides the organisational units of the square metres of industrial and warehouse law – announced the Ministry for National Tribunal, housed until now in various space in the region. Economy. buildings, the court of public administra- tion and labour will also move to the M3 Business Center. Th is 5900 square metre Housing market is The biggest deal rental is the biggest new rental contract catching up of the year of the year so far. Since 15 August 2014, the Civil Divisions of the fi rst and second Th e property market continues to be char- 6000 square metres of offi ce space in the instance of the Civil, Administrative and acterised by high transaction volumes in M3 Business Center has been rented since Labour College and the Court of Company the current year. 27 percent more resi- August by several organisational units of Registration and the Bankruptcy, Liqui- dential property changed hands in August the Budapest Region Tribunal (Budapest dation and Litigation group of the Eco- than one year previously – as it turns out ADVERTISEMENT
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from Duna House Transaction Estimates. Compared with the level during the years following the crisis, high transaction vol- umes continue. Th e number of sales tak- ing place in August fell slightly short of the
preceding month, but this is a normal, sea- János Marjai/MTI Photo: BRIEF NEWSBRIEF NEWS BRIEF NEWSBRIEF sonal phenomenon. Sales of 8978 proper- ties were transacted in August. Th e volume in the preceding month is thus 27% higher than the value estimated one year before, which is remarkable. Based on Duna House estimates the total transaction volume for the current year is approaching 64 thousand, which signi- VÁRKERT BAZÁR fi es a 16% growth compared with the same period of 2013. Based on the high forecasts a building in a similar category before on 2,500 sqm of exhibition space. Th e second for September and the seasonally strong the Budapest market. Th e Green House is phase included the construction of new end-of-year months, it is increasingly cer- after all the premium product of a leading areas, the reconstruction of the royal gar- tain that volume this year will approach or European developer, with high utilisation dens and the completion of a new under- may even reach 100 thousand, which will and the latest green solutions. Th is market ground garage. be the highest level on the property mar- segment has been dominated almost exclu- Transportation in the area is also being ket since 2008. sively by foreign institutional investors for improved as part of the reconstruction pro- around the past 20 years. Th e domestic ject. Lánchíd utca was refurbished, a new property market (has) suff ered to a signifi - pier for BKK boats was inaugurated and the A milestone on the cant extent for about the last 6 years, from opening of a new tram stop serving Várk- Budapest investment the fact that international (typically West- ert Bazár is underway, while some nearby ern European and North American) insti- roads and squares are still under construc- market tutional capital disappeared on the clients’ tion. Th e total cost of the reconstruction of Th e Green House offi ce block of Skanska side, which was generally explained by the Várkert Bazár, which is expected to attract Hungary Real Estate LLC., which has also risks of the Hungarian market. 250,000 visitors each year, was HUF 11 bil- been awarded an international prize, has Although one swallow does not a sum- lion. been sold. Th e new owner of the green mer make, Diófa’s acquisition must defi - offi ce building is the open-ended Torony nitely be regarded as a positive sign. On Real Estate Investment Fund under the the one hand it suggests the possibility that Starwood Capital direction of Diófa Fund Management, reg- Hungarian institutional capital may play a has been shopping istered as a member of the FHB Group. more active role on the Budapest property Th e Green House is the sixth offi ce market in the future. On the other hand the in Poland investment by Skanska in the Hungarian fact of the transaction is a positive message Within the scope of one of the largest offi ce capital. Located in District XIII, the build- for the whole market, which is particularly market transactions in Poland in the year ing which was opened in the December of important in such an illiquid situation. so far, the Ghelamco Central Eastern Euro- 2012 off ers tenants offi ce space on 7 sto- pean offi ce development fi rm has sold reys and 17,800 square metres. Th e offi ce three important offi ce projects to a con- block which is rented out to the extent of Várkert Bazár: opened trolled subsidiary of the Starwood Capital 98 percent at present houses international for the second time Group global investment company. companies such as the AVIS Budget Group, Of the three offi ce spaces sold, two are MSCI or the ABB, among others. Although Th e renewed Várkert Bazár opened for the located in the business quarter of War- the parties have not made details of the second time this year on August 29. Recon- saw, the T-Mobile Offi ce Park completed transaction public, rumour has it that the struction works on the long-neglected in the May of 2013 and the £opuszañska yield level of the deal worked out between building started in February 2013 and the (Łopuszańska) Business Park off er a total 7.5 and 8 percent. Buda Castle’s newest attraction was briefl y of 78,000 square metres of offi ce space, Th e transaction could even be regarded opened to visitors in April. Th e fi rst phase and the third project, the Katowice Busi- as a milestone, as no institutional investor included the renovation of the parts orig- ness Point opened in 2010, is to be found with a domestic background has purchased inally designed by Miklós Ybl, containing in Katowice city centre. Th e popularity of
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the offi ce blocks in question is shown by “B” category offi ces, the volume used by pri- high quarterly volume was also boosted by the fact that close to 100% of the offi ces are vate owners being 636,500 square metres. the transactions in excess of 5000 square rented out. Each one also has a green rating Th e offi ce market vacancy index is at pre- metres which were concluded in the sec- (BREEAM), the T-Mobile Offi ce Park being sent 17.6%, which means a fall of 0.9 per- ond quarter. Th e gross rental reached the fi rst offi ce park in Poland which could centage points for the quarter, and of 2.3 248,900 square metres in the fi rst quarter boast of this recognition. Th is unprec- percentage points over the year. At this of 2014, which means a 71% increase in BRIEF NEWSBRIEF NEWS BRIEF NEWSBRIEF edented triple sale well exemplifi es the point, however, we must not forget to men- demand compared with the same period growing dynamic of the Polish market, as tion the performance of the complement of in 2013. 20 percent of the demand was well as its increasing signifi cance for inter- rented offi ces which may be more relevant new contracts, expansions and pre-leases national investors. from the point of view of the market, and represented an 11 percent proportion per which likewise fell compared with the pre- type of contract, whilst 5 percent of the vious periods, though at the moment it is total demand was made up of private take- Record letting on the ranging well above 20% (21.9%). overs. Th e strongest rental activity was Budapest offi ce market With regard to the submarkets, the per- registered on the “Pest Central” submar- formance of South Buda is once again the ket, where 34 percent of the gross rental Th e full complement of offi ces in Buda- best (11.8%), whilst the highest vacancies was realised. pest, including speculative buildings and are still measured in the Budapest metro- It is particularly welcome news that the those in private ownership, amounted to politan area (the agglomeration), where the strong performance for the quarter is high, 3,205,600 square metres in the second proportion of vacant offi ce space reached resulting in a net absorption of more than quarter of 2014. Th e BRF has registered the 31.9% in the second quarter of 2014. 46,000 square metres. Th is is one of the conveyance of a new offi ce block on Váci Th e gross rental volume in the second most important data points with respect to Road. With the opening of the Váci Cor- quarter was 191,720 square metres, which the present and future of the offi ce market, ner Offi ces (21,100 square metres), the is an outstandingly high quarterly value. which shows what the extent of expansion complete modern speculative complement Th e net rental also displayed a record high is really like, and whether there is genuine includes 2,569,100 square metres of “A” and value, reaching 81,210 square metres. Th e demand for the new spaces.
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COVER STORY COVER cast a long shadow
TÜNDE MADUROVICZTANCSICS The markets of Ukraine and Russia, for- Th e Russian economy may be hit hard merly coming increasingly into the cross- by the European and American sanctions. wires of property market players, may be An important component of these is that powerfully aff ected by the continuing cri- the accessibility of European and Ameri- sis. The future is at the moment, the mag- can credit markets has been restricted for nitude of the damage depending on how the Russian state banks. Th is makes access long the situation lasts. Fallback, however, to longer term resources more expensive is already perceptible. for the fi nancial institutions, and therefore for the fi nancing of the Russian economy. Political uncertainty in Ukraine has been Th is has indirectly increased uncertainly in increasing since the beginning of 2014. Th e connection with the Russian markets, thus prime minister resigned at the end of Janu- worsening the business environment. As ary, the president Viktor Yanukovych and a result of the Ukrainian confl ict and the his government left the country, following sanctions, a larger measure of capital out- which a temporary government was set up. fl ow and a more volatile exchange rate have Early elections were held at the end of May, been observed in recent times, which have and a new government was formed under also had a negative eff ect on the property the leadership of Petro Poroshenko. Besides market. the political changes, Ukraine was com- In contrast to investments of record pelled to face numerous new challenges, and magnitude in 2013, the Russian investment after the loss of Crimea, fi ghting broke out in market signifi cantly underperformed at East Ukraine. Sanctions were then imposed the beginning of 2014, although accord- on Russia by Europe and the United States ing to 2013 data from Cushman & Wake- because of its disputed role in the develop- fi eld it had previously been the 12th most ment of the situation. attractive investment target. In the fi rst six Th e emergence of this crisis situation may months of the year the estimated invest- have a signifi cant infl uence on the property ment volume was approximately 1.2 bil- markets in the two countries, which were lion dollars, which is roughly 30 percent previously on the upswing, and the signs less than in the same period last year. Even of this can already be seen. Great losses though last year was outstanding with could be suff ered by the Ukrainian econ- regard to the data from the fi rst six months, omy, which following the stagnation of last this result still gives food for thought, since year has already experienced a fallback in numerous transactions were initiated at the fi rst quarter of 2014, the real GDP of the end of last year, their completion slip- the country falling back by 1.1 percent com- ping through to 2014. According to Col- pared with the level one year earlier. Th is liers estimates, property investments for tendency is expected to have continued in the current year may fall back to half of the second quarter, though the actual data those measured in the past three years, will only come to light later. According to not even reaching the level for the year the IMF forecast of July, the Ukrainian econ- 2007. Overlooking present activity levels, omy could shrink by 6.5 percent this year. It the investment sum by the end of the year is likewise bad news that domestic consump- could be 3.7-4 billion dollars, in contrast to tion is falling, but industrial production and the investment volume of more than 8 bil- investment activity have also fallen sharply. lion dollars last year.
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In the fi rst quarter it was domestic inves- and rental fees are beginning to come under tors who were principally active; they trans- pressure. MOSCOW acted around 80 percent of the investments, with Finnish and Swedish players also mak- Everything depends on stabilisation ing purchases. In the second quarter the Th e Russian property market has therefore balance tipped further in the direction of lost some of its earlier momentum, but we COVER STORY COVER domestic buyers: with regard to the fi rst half must not forget that the Russian market has of the current year, only somewhat more numerous advantages, even just due to its than 6 percent of the total investments may size. Consumption is constantly increasing, be linked with international players. incomes and the population are expanding Damian Harrington, MRICS, M.Sc; too, which may make the country attractive Regional Director of Research & Con- to investors in the long term. A very impor- sulting, Eastern Europe Regional Team tant role with respect to the future, however, declared: at the start of 2014 they predicted is taken by how long the crisis takes to end. that a reduced regional investment volume Should the political and economic situation turnover would be plausible in 2014, as a stabilise, the Russian commercial property direct result of the Russia/Ukraine con- market may continue to count on the inter- fl ict. As of mid-year, this has become a real- est of international and domestic property ity with most investors focused on Russia players. A protracted confl ict, however, may deploying a ‘wait-and-see’ mentality while cause the market further signifi cant losses. there has been a weakening of international Existing as well as future sanctions may investment sentiment towards the coun- unsettle the country’s economy, which will try. Although Russian investment volumes also adversely aff ect domestic property com- have been lower in H1 2014 than previous panies, and cause foreigners to lose interest years it is not all bad news. Owner occupiers in getting involved. It may be a warning sign are taking the opportunity to buy assets – a that Russian investments are falling in spite number of offi ce, retail and logistics/distri- of the fact that the volume of investments has bution facilities having been acquired so far increased in other countries in the region: in 2014 – and some long-term foreign inves- to a highly signifi cant extent in Poland, for tors have remained active. instance, but investors are also starting to In a similar way to the previous year, the return to Hungary. attention of investors in the fi rst six months Árpád Török, CEO of TriGranit said about was primarily focused on Moscow, 87 per- the situation, that in Russia they don’t see any cent of the property investments coming sign of decrease in retail turnover, mostly to the whole country being registered here. only stagnation. Th e Russian domestic mar- Th e yields have not yet changed over the fi rst ket is strong while the volatile economic envi- six months, but according to the July expec- ronment in Ukraine immediately brought tations of Colliers International, growth of down the willingness to invest. However, it half a percent is likely by the end of the year. seems like the retail chains that are present As a result of the credit market restriction in Russia are holding back the realisation of it may be more diffi cult for property market their expansion and network development players to fi nd resources in the future, and plans. Th e trends of lending activity trends refi nancing may become more expensive. show deterioration, and the ongoing confl ict Th e banks may think more carefully about has already set off a decrease of international who to provide with loans, though good investments and foreign bank loans. property projects will hopefully continue In connection with the crisis and the to have access to credit. Th e sanctions may, future of the Russian real estate mar- however, also aff ect demand. Th e strictures ket Damian Harrington said: while Russia on the credit market may also set back retail remains a blocked market for many interna- turnover, and in the case of the offi ce market tional investors this will play into the hands the slowdown may have a negative eff ect on of other CEE locations. Aside from the leasing. Th e vacancy rate may develop unfa- change in the distribution of capital across vourably in every property market segment, the region, there have been some other
www.resourceinfo.hu | 2014/9.
10-15-covstory-REs-1409.indd 11 9/11/14 5:20 PM REsource
Domestic and international investors' in Russia (billion USD)
8
7 Domestic International 6 COVER STORY CÍMLAPSZTORI COVER 5
4
3
2
1
0 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014 SOURCE: CBRE, RESOURCE KIEV
direct impacts on the Russian market in par- vnia has been greatly devalued, which has whereas it is 11 percent in the industrial ticular. Th e depreciation of the ruble has had exercised a further signifi cant negative eff ect property segment. a negative eff ect on tenants, especially in on the Ukrainian business environment. Th e Downward pressure is weighing on rental retail whose core business implies costs are present attitude of investors is well refl ected fees on the offi ce submarket, the vacancy rate denominated in foreign currency (including in the fact that thanks to the unstable politi- and rental fees will remain sensitive to the import of goods and rental rates) while their cal environment, v ery few investments were economic performance of the country in the income is denominated in Russian rubles. concluded on the Ukrainian property mar- medium term, and to developments in the Despite the appreciation of the ruble in June ket in the fi rst half of 2014. crisis. Th e rental market continues to have and July, as sanctions have been imposed According to DTZ estimates, the value signifi cant potential in Ukraine, thanks to the and the confl ict continues, the ruble has of property investments in Ukraine in 2013 magnitude of the population and the coun- fallen back to the lows of March earlier in totalled around 48 million dollars, but in try, as well as the present very low maturity the year. the fi rst quarter of 2014 there were practi- level of the market. Th ere are likewise many On the other side of the coin, Western cally no secondary investment deals. In the opportunities inherent in the logistics market sanctions on Russia have started to place a second quarter there were transactions, to a in connection with the upswing in retail. drag on economic growth in the eurozone total value of 16 million dollars, but this only Th e future for Ukraine, however, is very with Q3 growth looking rather unhealthy aff ected two properties in all: a Kiev offi ce uncertain for the time being, and it cannot after growth had stagnated in Q2. Italy has building was sold for 12.5 million dollars and really be seen at present when the political fallen back into recession, France is fl atlining a warehouse on the outskirts of Kiev for 3.5 uncertainly will be resolved. and even Germany has seen a big fall in out- million dollars. Th e long-term situation depends on how put. Whilst these issues are driven primarily According to DTZ forecasts, this year’s sec- quickly the confl ict can be resolved. All sim- by the need for structural reform and chok- ondary investment transactions may reach ilar confl icts automatically lead to uncer- ing austerity, the extra burden on markets 25-150 million dollars by the end of the year, tainty, which in this case has a stronger eff ect resulting from sanctions is likely to exacer- irrespective of the stabilisation of the present on the Ukrainian real estate market than on bate the short-lived nature of Europe’s eco- situation. Th ere may be investor demand for the Russian one, said Árpád Török. nomic recovery, fi ltering into weaker occu- income-producing offi ce buildings, retail In the case of Ukraine they certainly pier demand into 2015. Mario Draghi’s and logistics properties located primarily expect long-term negative eff ects. Th ere recent move to cut ECB rates to try and in Kiev, but in the case of retail properties will be a setback in the fi eld of development stimulate growth and fend off a period of other major cities may also come into view, and real estate investments because of the defl ation is evidence of how real the prob- although investors will clearly avoid the east- increased country risk, therefore lending lem has become. ern region of the country. activity will drop or narrow down completely, Premium property market yields in Kiev but loans will defi nitely become more expen- Ukraine is suff ering too continue at a high level compared with the sive. All this leads to deteriorating yields, Th e business attitude with respect to rest of Central Europe. According to data and as a result also to value loss. Currently Ukraine at present is characterised by wait- from March, the yield is 12.5 percent on Ukraine is too dangerous even for opportun- and-see. Th e Ukrainian currency, the hry- the offi ce market and the retail market alike, istic investors with a higher risk tolerance.
2014/9. | www.resourceinfo.hu
10-15-covstory-REs-1409.indd 12 9/12/14 11:39 AM REsource CÍMLAPSZTORI
Nordic Light
Excellent business location, energy and cost efficient solutions. 26,200 sq m quality space to accommodate your office and retail requirements.
96-98 Váci Road, 1133 Budapest, Hungary Contact: [email protected], +36 1 382 9100 www.skanska.hu www.resourceinfo.hu | 2014/9.
10-15-covstory-REs-1409.indd 13 9/11/14 5:20 PM REsource Getting out of the woods
The RICS Commercial Property Mon- expect increasing investment activity in beyond the prime segment. Retail rents itor for Q2 2014 revealed that most the next two years, as well-positioned are supported by reasonable pre-leasing ANALYSIS regional markets, slowly but steadily, and well-managed properties may prove rates for new developments and a return seem to be getting out of the woods. to be profi table investments, especially to growth of consumer expenditures In most Central and Eastern European when compared to other CEE countries. since the start of the year. And in indus- markets macroeconomic challenges On the other hand several value-adding trial and logistics real estate the shortage infl uence real estate sentiment, but products are available in the marketplace; of supply is putting upward pressure on investors willing to take greater risks may rents while demand builds up.” expectations are improving with a lon- also fi nd attractive deals.” In Hungary, confi dence in the rental ger term outlook for capital values. A positive value was registered for outlook turned positive for the fi rst time Occupier Sentiment in Bulgaria, Hun- in four years, while in Romania confi - In Bulgaria and Hungary, rents and capi- gary and Romania, while it is slightly dence in the outlook for rents turned tal values are expected to pick up across negative, but in relatively neutral terri- negative and rents are projected to fall in the board over the next 12 months. Sim- tory, in the Czech Republic. In Hungary all but the retail sector (where they are ilar movements are expected for capi- the index has reached its highest level expected to remain fl at). tal values in the Czech Republic, but the since the global fi nancial crisis, while in Th e Czech Republic demonstrated outlook for rents shows a more mixed the Czech Republic and Romania it has the highest Investment Sentiment index picture across market sectors. Th e next eased back relative to the last quarter. reading by some margin, although the 12 months look to be gloomier in Roma- Occupier demand increased across the reading is also positive in Hungary. Th e nia where growth in capital values is pro- board in Bulgaria, Hungary and Roma- Index reacheds its highest level since jected to slow and rents are expected to nia, particularly in the offi ce sector in 2011 in the Czech Republic and since fall. Bulgaria and in the offi ce and retail sec- 2010 in Hungary. Th e index is in neutral All four countries have their own mac- tors in Hungary. In the Czech Repub- territory and indicates a more or less sta- roeconomic challenges to face, but a lic, growth in availability outpaced occu- ble investment market for both Romania brighter economic outlook is captured pier demand in both the offi ce and retail and Bulgaria. In Romania it turned neu- in the latest Q2 survey. In Bulgaria, the sectors, in the industrial sector, however, tral for the fi rst time since 2010. government’s resignation and a swift demand is outpacing availability and ten- “Bulgaria together with a number of outbreak of vulnerability in the banking ant inducements are falling. In Romania other SEE and CEE countries is among sector could cause some challenges and growth in availability accelerated, espe- our primary targets. Although the num- jeopardise a brighter outlook, while the cially in the offi ce sector. ber of investments one could make in other three countries are facing record Rents are expected to increase across Bulgaria, and more precisely in Sofi a, is low infl ation and interest rates. all three sectors (offi ce, retail and indus- Balázs Czifra MRICS, Country Head, trial) in Bulgaria and Hungary over the DTZ Hungary added: “Hungary shows next twelve months. In Bulgaria a par- signs of being on the path to recovery. ticularly fi rm increase is expected in Th is can be seen on the occupier market, the offi ce market. In the Czech Repub- where there is increasing interest; a lack lic offi ce rents could be set to fall further, of available, larger prime space in prac- but the retail and industrial areas of the tically all market segments. Although market should see growth. vacancy rates are still high, occupiers “In Bulgaria, investor interest is going have a quite limited choice of modern, up on the back of a brighter outlook good quality, large contiguous space. Th is for occupier demand and rental growth trend will lead to pre-let or built-to-suit across all three commercial real estate agreements and impose upward pressure segments,” Michaela Lashova, MRICS, on rental levels. Hungary has once more Managing Partner at Forton, the Cush- become an interesting, potentially attrac- man & Wakefi eld Alliance Partner in tive market for investors mainly looking Bulgaria and FYROM, said. “Th e funda- for retail and offi ce products. With the mentals further improved in the offi ce positive signs on the occupier market we market with positive spillovers seen BALÁZS CZIFRA
2014/9. | www.resourceinfo.hu
10-15-covstory-REs-1409.indd 14 9/12/14 12:19 PM REsource ANALYSIS
STUART JORDAN MICHAELA LASHOVA
rather limited, there are some good qual- Republic, with growth anticipated in all In Romania capital values are expected to ity investments that can generate decent sectors, although the industrial sector remain fl at in all areas of the market. returns and therefore be of interest to is the standout performer. “Th e level of Nevertheless, the longer term outlook investors,” Lila Pateraki, Director of Busi- activity in the industrial sector and the for capital values (12 months) is encour- ness Development at Zeus Capital Man- weight of capital forcing itself into the aging for all four countries, with some agers, said. “We believe that there are still sector has benchmarked pricing, with a degree of growth projected in each sec- opportunities in the offi ce market and in signifi cant appetite for single stand-alone tor. In Bulgaria a fi rm pick up is expected, the retail sector.” investment assets, through to industrial the Czech Republic exhibits the stron- In all four countries investment enqui- parks, portfolios and even entire plat- gest readings with a strong appetite in the ries continue to increase across the board. forms.” commented Stuart Jordan FRICS, industrial sector now being refl ected in a Th e growth was particularly strong in the Head of Capital Market, JLL. Meanwhile, competitive retail sector, while in Hun- retail sector in Bulgaria and Romania, modest growth is expected in Hungary gary and in Romania capital values are and in the industrial sector in the Czech across the board. Results vary in Bulgaria, only expected to pick up moderately. Republic. where retail values are expected to fall Th is is a result of elevated capital value while offi ce and industrial segment val- expectations (3 months) in the Czech ues are anticipated to be more or less fl at.
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10-15-covstory-REs-1409.indd 15 9/11/14 6:55 PM REsource Improving macroindicators in CEE countries
ANALYSIS Macroeconomic data shows that most countries in the region are performing better in 2014 than they did in 2013. Growth is expected to accelerate in all members of the Visegrad Group, but most of them are still fi ght- ing stubbornly high unemployment rates and facing budgetary issues. Also, all examined countries in the CEE region are experiencing record low infl ation rates that may cause problems in the longer run. All in all, the countries in the region are increasingly showing signs of recovery, but they are still not entirely out of the woods.
ÁKOS BUDAI
fter spending two years in 56.5 in July, remaining in expansion ter- with high debt fi gures. Public debt stood A recession, the Czech Republic’s ritory, where it has been since May 2013, at 85.1% of GDP at the end of the second economy is expected to grow suggesting that the Czech manufacturing quarter despite the government’s continu- 2.5% this year. Yearly GDP growth was sector will remain on its growth trajectory. ous pledges to reduce it. Consumer con- 2.5% in Q2, lower than the 2.9% rate reg- Estimates for Hungary’s GDP growth fi dence has been on an upward path for istered in Q1. Nevertheless, economic this year, after a 1.1% expansion in 2013, more than two years now, but July’s fi gure conditions continued to improve in the have been on the rise for months now. of -18.9 is still not as promising as April’s past months. Th e labor market especially Based on higher than expected quarterly eight-year high of -15.3 was. Th e manu- benefi ted from the recovery in domes- fi gures in the fi rst two quarters most ana- facturing PMI rose sharply to 56.7 in July tic demand, as the unemployment rate lysts estimate 2.8% economic growth from 51.7 in June and has been expanding decreased from a record high of 8.6% in for 2014. Unemployment in Hungary for 12 months now, which is a distinctly January to 7.4% in July. While business has been on a downward path for more positive sign in an economy that other- sentiment decreased somewhat in the sec- than a year now (at 7.9%, a six-year low wise shows a very mixed picture. ond summer month, Czech consumers are in July), but the increase in employment Poland’s economy has proven to be one optimistic. Consumer confi dence declined is mostly due to the sharp rise in public of the most resilient in Europe during the slightly to -4.3 in August from a four-year work schemes since 2010 and to the jump years of the crisis, but it appears to have high of -2.3 in July. Meanwhile, the Pur- in the number of Hungarians taking jobs lost steam last year. Economic growth in chasing Managers’ Index (PMI) stood at abroad. Also, the country still struggles the region’s largest country stood at 1.5% in 2013 and is expected to be at 3.3% in 2014, but Poland is likely to suff er the most Real GDP growth (y/y, nsa, %) from Russia’s recently imposed ban on the 8 import of almost all fruit and vegetables. Unemployment nearly reached a two- 6 year low in July at 11.9%, while industrial 4 production and retail sales growth both 2 bounced back in July from reaching one- year lows in June. After three months of 0 deteriorating expectations for the future, -2 business confi dence also bounced back in August to 5.1. Manufacturing shows a less -4 promising picture: the PMI began con- -6 tracting for the fi rst time in a year in July. HU SK RO PL CZ -8 Economic growth in Romania is expected to slow down to 3.0% in 2014 from 3.5% -10 in 2013. Several sectors of the Roma- 2009 2010 2011 2012 2013 2014 nian economy are showing signs of losing SOURCE: EUROSTAT, RESOURCE steam. Industrial production grew by
2014/9. | www.resourceinfo.hu
16-27-pt1-REs-1409.indd 16 9/11/14 6:50 PM REsource Property valuation based on new foundations
In the past year, the domestic suit developments, and I also believe commercial property market has that high-quality projects make sense been showing signs of recovery. in the long term in every segment.. SPONSORED ARTICLE Are you experiencing the recovery of the market through more client As one of the signs of recovery approaches? from the crisis, a property valuation Ágoston Jakab (Á.J.): We have def- practice based on new foundations initely experienced market recovery, has emerged in Hungary (too). How both in the growth of the number of do you see this issue? engagements from banks, and the N.S.: As a result of the crisis, the mar- number of valuations either preceding ket and economic conditions have or following other market transactions. become more diffi cult, so there is even It is important to note, however, that more need for qualifi ed valuers in the NÓRA SARLÓS ÁGOSTON JAKAB for us the recovery mostly involves the future. There is an increase in the signif- updating of earlier valuations; there is icance of experts who are familiar with property trade in order to obtain max- N.S.: The growth in the number of a far greater number of these than of unpublished market background infor- imum information on the market, are our engagements, and also their nature, engagements due to new develop- mation because of their market pres- informed on the areas directly and attests that asset management by local ments. ence. Property valuers are faced with indirectly connected with the prop- governments is playing a prominent signifi cant diffi culties: due to the lack erty trade, represent an ethical atti- role nowadays. The individual usage In the past year both the devel- of transactions, suitable market data tude and have advanced professional concepts for property asset compo- opment and the investment mar- are not available, and so input param- qualifi cations. nents may hold ambitious expecta- ket appear to be recovering, more eters have become more uncertain for tions which are diffi cult to support by transactions have been concluded certain methodologies, i.e. the results Is the question of defaulted prop- the market at the moment, and which in the current year. What are you of individual approaches are more scat- erties still a current issue on the do not necessarily harmonise with the experiencing in this area? tered. The appearance of huge quanti- domestic market? How are these current market value of the asset com- Á.J.: Over the past few years (2008- ties of defaulted properties on the mar- assets to be assessed? ponents. 2012) our professional activities linked ket has had a negative eff ect on the N.S.: The defaulted properties can’t to investments has been very low key, value of functioning properties. Insofar necessarily do anything about being How does a property expert pro- but in the last two years we have man- as the actual data for speculative trans- defaulted. I prefer the appellation ceed in such cases under the present aged to get engagements again in the actions are public, they distort the mar- defaulted credit transaction. In most uncertain market conditions? case of several green and brown fi eld ket signifi cantly – damage could even cases the property “houses” an eco- N.S.: It is extremely important that development projects, which rep- be caused if the off er price becomes nomic business, which will either be with regard to the given property asset, resent signifi cant growth compared public. Revaluation of the portfolios of successful, or not. The value of the the valuation analyse several forms of with the preceding period. Due to properties valued before the crisis has assets is embodied in certain forms of value, diff erentiating the market value the new business credit opportuni- in many cases not been done, or not value. The individual forms of value are form featured in the balance sheet and ties, we have an increasing number of properly, and this signifi cantly distorts defi ned along certain assumptions. In that for investment assuming defi ned requests for the review and valuation the market. The discount rates are “the- the case of the determination of mar- development concepts. An anomaly of smaller and larger developments oretically constructed” or come from ket value, the highest and best use so typical of the period immediately for pre-fi nancing banking purposes, foreign sources, there are no transac- of the given asset must be examined, before the crisis may thus be avoided, and in addition, for supervision of the tion data to rely on. which is the possible and legal use of it when in many cases the market valua- full project from the bank’s point of As a result of all this it can be said which may be realised in practice, may tion of properties was made based on view following signature of the loan that there is greater uncertainly in the be properly justifi ed, is fi nancially fea- an unprepared project. contract. We interpret this tendency valuation process due to the unreli- sible and results in the greatest value. as clear recovery of the investment ability of the market and the appear- In the case of usage for speculative market. ance of distorted data, and so the purposes, value for a given market applicability of valuation methodol- player is to be determined by means What kind of property develop- ogies is limited. Valuation requires a of the assumption of a defi ned use. ment projects have a raison d’être in circumspect method, qualifi ed valu- Hungary today? ers are needed who have professional What is the experience in the Nóra Sarlós (N.S.): Primarily build-to- experience, practise networking in the state sector?
www.resourceinfo.hu | 2014/9.
16-27-pt1-REs-1409.indd 17 9/12/14 11:41 AM REsource 16-27-pt1-REs-1409.indd 18 ANALYSIS According to the president the 5percent- 11.5% on a yearly basis inJune reg- basis after 11.5% onayearly Minister Victor Ponta gave hisassurance (as opposed to 10.1%inMay). Unem- opposed (as intheyear-on-year fi rst summermonth were raised in Bucharest about certain certain about inBucharest were raised Băsescu sent a previously approved social approved social sent apreviously Băsescu 2014/9. | ployment has been steadily above 7.0% above steadily been has ployment for months now. Th issummer, concerns month, while retail sales grew by10.3% month, grew sales whileretail tions could create a risky shortfall ingov- shortfall tions could create arisky this year’s of2.2%GDP. target istering a 13.4% growth in the previous inthe previous a13.4%growth istering that thedefi budget cit wouldnotsurpass budgetary issues. InJuly, issues. Presidentbudgetary Traian ernment revenues. In response Prime Prime Inresponse ernment revenues. age point cut in social security contribu- security insocial cut age point security tax reform back to reform Parliament. back tax security 10 -2 0 2 4 6 8 2009 2010 2011 2012 20132014 2009 2010
HU www.resourceinfo.hu SK Inflation (HICP, y/y, %) RO After two months of never before seen seen before twomonthsAfter ofnever 4.7% inMay, by2.5%ona grew sales retail yearly basis in June (as opposed to 1.6%in inJune opposed basis (as yearly Republic saw inprices Republic aslight increase Slovakia’s to expand economy isexpected from aratefrom of0%inJune to 0.5%inJuly. ment rate has been decreasing for more decreasing ment rate been has record low infl is picking upin2014. is picking than 18 months, but still stands at butstillstands than arel- 18months, the previous month), whilethethe unemploy- previous by 2.5% in 2014. Industrial production production by 2.5%in2014.Industrial defl growth acceleratedgrowth to 7.5%inJune from atively high12.7%inJuly. Allinall,most signs suggest that economy suggest thesigns Slovakian PL After a low growth rate of0.9%in2013, alowgrowth After All regional countries have All regional experienced increased inHungary ation, the CPI CZ ation this year. Th SOURCE: EUROSTAT, RESOURCE e Czech year-end fi around to be isexpected gure kia’s infl steadily ation been rate also has from June.from in Romaniaisthe onlycountry level: the CPI in August stood at 1.0%. inAugust stood the CPI level: the growth of consumer prices. Slova- ofconsumerthe prices. growth infl a32-year-low Poland ban. seen import has tion in the past few months, but2014still months, few tion inthe past thatthe region hasn’t defl experienced the same territory for a while, depending for awhile,depending the sameterritory to 0.1%inJulystay in andisexpected utility price cuts andthe eff utility pricecuts brought record low increases inthe price brought record lowincreases on the next round ofgovernment-induced growth at -0.1% in July was unchanged at unchanged -0.1%inJulygrowth was 0%, but as in the case ofHungary, inthe case 0%, butas Rus- around 0% for almost a year now.around ayear 0%for almost Price sia’s to risk adownside poses ban import ation rate of-0.2%inAugust andthe ect ofRussia’sect BUDAPEST PRAGUE a- 9/12/14 12:38 PM REsource
Spreading optimism
This year is expected to be the strongest since 2006 for the Polish investment market as volumes are ANALYSIS expected to top €4 billion for the year. Over €2 billion in volume is predicted for the improving Czech Republic. A more modest €500 million plus is anticipated for Hungary.
DAVID LAWRENCE
lthough private equity funds A and CEE regional investors are Investment volumes in the CEE region (2014 H1, %) actively investing in Hungary, the Poland 39 major Austrian and German funds are still persuing a “wait and see” strategy, prefer- Russia 21 ring the economically successful Polish Czech Republic 18 and Czech markets. Romania, the second largest CEE EU country after Poland, is Baltics 7 fi nally regaining its status as an investment Hungary 6 destination and 2014 is expected to set a new post-2008 economic crisis investment Romania 6
volume benchmark. However, institutional Slovakia 2 investors have still not entered Romania. “Core investors that are focused on Others 1 prime in Warsaw and Prague are start- 0 10 20 30 40 50 ing to seriously consider Bucharest. What SOURCE: COLLIERS INTERNATIONAL, RESOURCE Romania needs is an arm’s length institu- tional deal at an attractive price. Th e devel- opment activity by for example Skanska saw. Th e almost fully let Class A property regional and logistics will be present both and AFI Europe is signifi cant,” commented portfolio has been placed in the Starwood around Prague and regionally,” said Tewif Troy Javaher, Head of CEE Capital Markets Opportunity Fund 1X. “Improving busi- Sabonyui, Managing Director of JLL in the at JLL on the prospects for Romania. ness conditions and easing credit condi- Czech Republic. Unsurprisingly, Poland reported a circa tions are likely to support an increase in 50 percent share of CEE investment (or investment in Poland,” Keegan Viscius, Budapest is back on track €1.433 billion) for the fi rst half year accord- Vice-Preident of Starwood Capital Group In Budapest, Skanska Property Hungary ing to JLL. Th is was followed by the Czech commented on the deal. has sold the 17,800 sqm Green House Republic with 25 percent (or €719 million), Th e Prague offi ce market is also active offi ce centre to the Hungarian open-ended Romania with 15 percent (or €430 million), after a two-year downturn. One of the property fund, the Torony Real Estate Hungary with 8 percent (or €230 million) largest transactions in Prague and CEE in Investment Fund managed by the Diófa and Slovakia with 2 percent (or €34 mil- the fi rst half year was the purchase of the Fund Management, a member of the FHB lion). City Tower offi ce centre in Prague by PPF Group. Erste Bank was the fi nancial part- Th e thriving Polish investment mar- Real Estate for €130 million. In another ner in the acquisition. Th e deal is generally ket is attracting investors to regional cit- deal, HB Reavis Group sold the 19,500 regarded as a signifi cant step in the recov- ies not only for the retail and industrial, sqm River Garden Offi ce I in Prague to ery of the Hungarian property investment but also for the offi ce segment. In a recent the Czech investor Prvý Realitný Fond market, in that a class A offi ce centre by deal, Starwood Capital Group purchased (PRF), managed by IAD Investments, for a major international developer is the sub- three offi ce developments from Ghelamco. a reported €50 million plus. “Th e Czech ject of an investment acquisition. Michael Th e 78,000 sqm Class A portfolio con- Republic is back on the investment map, Edwards, Partner at Cushman & Wakefi eld sists of the Katowice Business Park in Sile- which was not the case two years ago. (C&W) sees the closing of the deal as a sig- sia and the T-Mobile Offi ce Park and the Although Prague offi ce will be the high- nifi cant advance for Hungary. Lopuszanska Business Park, both in War- est in terms of volume, retail will be more Distinct signs of a recovery in the
www.resourceinfo.hu | 2014/9.
16-27-pt1-REs-1409.indd 19 9/11/14 6:50 PM REsource
Investment volumes in the CEE region (pre 2009) Investment volumes in the CEE region (post 2009) Slovakia Others Baltics Others Slovakia 8% 8% Baltics 3% Poland Romania 4%2% 5% 28% Russia 4% ANALYSIS Romania Hungary 35% 7% 5%
Czech R. Czech Republic 12% 16% Hungary 17% Russia Poland 16% 30%
SOURCE: COLLIERS INTERNATIONAL, RESOURCE SOURCE: COLLIERS INTERNATIONAL, RESOURCE
Hungarian investment market were evi- Offi ce was the dominant sector for In addition to offi ce the logistics sector is dent as Dutch ING Real Estate completed investment in Romania in the fi rst half year attracting investors with yields of 7.25 per- the sale of its remaining 50 percent stake as it accounted for 80 percent of deals. Th e cent for Poland. In one of the biggest trans- in the 47,000 sqm Allee shopping centre in largest transaction was the acquisition by actions of the year, the US-based Blackstone Budapest for a reported €95 million. Globalworth of the BOB and BOC offi ce has acquired the 200,000 sqm Standard Life In one of the largest European retail buildings in Bucharest in addition to 446 Poland logistics portfolio for €118 million. deals of the year, TriGranit, Europa Capital apartments and 25 retail units in an adja- Standard Life made the purchase through and PKP sold the Poznan City Center retail cent project from RREEF for €210 million. its European logistics platform, Logicor. complex to a consortium of Resolution and Globalworth also purchased Tower Center Th e portfolio consists of 200,000 sqm of ECE. “Core investors are looking at Poland International in the Bucharest CBD for €58 GLA of warehouse and offi ce space devel- and the Czech Republic for prime, land- million. Th e international investor is focus- oped by Standard Life Investments and its mark shopping centres, seen as off ering ing its activity on Romania. development partner PDC in addition to a better value compared to other core Euro- 70,000 sqm development plot. pean countries. Meanwhile the regional cit- Yields are lowest in Prague Outside the more traditional invest- ies across both countries have opened up, JLL put prime offi ce yields for Bucharest at ment sectors, the hotel investment market with a signifi cant shift of core and value- 8.25 percent compared to 6.25 for Warsaw is also active. Th is year has seen the sale of add capital towards this sector. Prime shop- and 6.00 and heading to sub-6 for Prague. the Four Seasons Hotel in Prague to North- ping centres in Hungary and Slovakia are Th is compares to 7.50-7.75 percent for wood for a reported €80 million. In Buda- also back on the radar for investors search- Budapest. In general a two percent yield pest, the Dubai-based Al Habtoor Group ing for stock,” said James Chapman, Head diff erential is expected between Warsaw has purchased the Intercontinental Hotel. of CEE Capital Markets at C&W. and Bucharest. Th e group, which is active in hotel and hos- pitality development, bought the Le Meri- dien Hotel in Budapest in 2012. Further hotel transactions are expected to close this year in Prague. According to C&W it makes more sense to buy an existing trading hotel rather than build a new one, simply because property prices are still below replacement costs. Th e German Halaba bank is fi nancing Starwood Capital Group’s Poland offi ce portfolio purchase with the provision of a €136 million long term loan. Commen- tators stress the importance of investment fi nancing for a functioning investment market beyond Poland and the Czech RIVER GARDEN Republic.
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Outside of the capital, Skanska Property Offi ce development Poland has installed the facade of the fi rst building at the 46,000 sqm Silesia Business Park located in Katowice. Th e development boom in Warsaw and Prague is Skanska’s largest project in Poland and is a sign of the success of the Polish market, ANALYSIS The Warsaw and Prague offi ce markets are regarded as thriving despite in that such a large, quality complex by a some concerns over vacancies. At the same time the Budapest and leading developer is being constructed in a major city outside of Warsaw. According to Bucharest offi ce markets are showing signs of recovery after a period of Skanska, the fi rst building is 65 percent let limited delivery. after a pre-lease was signed with PwC. “We are developing the complex phase by phase DAVID LAWRENCE and the fi rst building will be available for occupation by the end of 2014,” said Mar- evelopers regard Poland as Ghelamco is developing the 49-story, iusz Krzak, Regional Director of Skanska D an almost “core” destination and 220 meter high Warsaw Spire that together Property Poland. according to Savills, Warsaw offi ce with two adjacent buildings will provide a Th e standard of offi ce buildings in CEE stock is expected to reach fi ve million sqm mixed-use complex next to the Palace of is generally regarded as on a similar level to within the next three years. JLL research Culture in central Warsaw. Th e developer that found in Western Europe, as develop- records that over 1.1 million sqm of offi ce is one of a number of leading international ers need to meet the requirements of ten- space is in the pipeline, not only in Warsaw companies that are active in the Warsaw ants and investors in order to let a building, but in Krakow, Wroclaw and Tri-City. offi ce market, as the conventional wisdom facilitate debt fi nance and attract investors. Th e Warsaw offi ce market is continu- is that the city is the major business cen- Developers of prime products are construct- ing to thrive as construction activity has tre of Central Europe. Th e development of ing in accordance with BREEAM, LEED and reached 579,000 sqm with an additional high visibility skyscrapers is in fashion as DGNB certifi cations in order to conform 62,000 sqm under refurbishment. Th e lat- the city seeks to live up to its reputation as to EU legislation, and this is now a basic est delivery was the 38,000 sqm fi rst phase a leading European and indeed, world city. requirement from tenants and investors. of the 67,000 sqm Eurocentrum offi ce com- Furthermore, there are few height restric- In Prague, developers such as HB Rea- plex by Capital Park Group. For 2014 a total tions that restrict development in Prague vis, Karimpol, PPF Real Estate, Skanska and of circa 350,000 sqm of newly built and and Budapest, where there are concerns Immorent have anticipated that there will refurbished offi ce space is expected to be over the need to preserve the historic cen- be a scarcity of supply at some point and completed, according to JLL. tres. have started construction on a specula-
WARSAW SKYLINE
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of the recently completed fourth metro, Total investment volumes in CEE (EUR billion) located on the western edge of Budapest. Refl ecting the current situation in the slow- 16 moving Budapest offi ce market, Futureal 14 is persuing a phased development strat- egy with construction going ahead once ANALYSIS 12 pre-lets have been concluded. Th e develop- 10 ment project is planned to become a busi- ness and leisure hub that will include retail 8 and service elements. 6 In another major development the equity-rich developer, Skanska is set to 4 commence construction of the fi rst phase 2 of the 26,000 sqm Nordic Light in Váci út.
0 Th e project will be developed in two phases 1998 2000 2002 2004 2006 2008 2010 2012 2014 depending on pre-lets. Economic and political concerns from SOURCE: COLLIERS INTERNATIONAL, RESOURCE international developers have put a brake on market development since the eco- tive basis. About 300,000 sqm of space will international developers such as Skan- nomic downturn and eurozone crisis. How- be delivered in the next two years accord- ska, Atenor and Futureal. Th ese companies ever, Romania is now attracting prestigious ing to Tewfi k Sabonyui, Managing Director are able to fi nd fi nancing and construct in developers such as Skanska, AFI Europe, of JLL in the Czech Republic. Although the what is considered to be a challenging offi ce Raiff eissen Evolution (RE), Portland Trust Prague offi ce market is generally viewed in market. Th e market has historically high and the Atenor Group, and this is seen as a a favourable light, one potential black cloud vacancy rates and these currently stand at signifi cant step forward. on the horizon is a high vacancy rate that 18.5 in the city with circa 2.55 million sqm Skanska is due to complete the fi rst has risen to 14 percent. Vacancy in Warsaw of speculative offi ce stock, according to the 19,500 sqm phase of the Green Court offi ce is predicted to rise to 14 percent and this is Budapest Research Forum. Around 80,000 complex in the fourth quarter after an esti- expected to put pressure on rents. sqm of space is under construction. mated €46 million investment. A 13,700 However, this vacancy level should be Th e largest completion belongs to HB sqm pre-lease has been signed with Orange. qualifi ed in the case of Prague, as there is Reavis, which has offi cially opened the Th e company has applied for a Gold LEED considerable variation across the city with, 21,000 sqm Váci Corner offi ce complex certifi cation for the planned three buildings for example, a vacancy of 6 percent in after a two-year construction period. Th e totaling 52,000 sqm. Th e lastest offi ce deliv- Prague 4 and 31 percent in Prague 7. Tew- so-called Váci út Corridor has developed ery in Bucharest was by the Belgian Atenor fi k Sabonyui, Managing Director of JLL in into the major out-of-centre business dis- Group with the 18,000 sqm fi rst phase of the Czech Republic, argues that there could trict of Budapest. Zoltán Radnóty, CEO of the Hermes Business Campus (HBC). Th e be offi ce oversupply in particular locations, HB Reavis Hungary expects the complex to three-phase project is planned to deliver a but overall there is no such oversupply. be fully let by the second half of 2015. A €21 total of 78,000 sqm of space. However, another problem for develop- million debt fi nancing agreement has been Regarding pipeline projects, DTZ Echi- ers in Prague is the lengthening lease nego- concluded with Raiff eisen Bank as was the nox estimates that new Bucharest offi ce tiation process that is now often as long as case with earlier HB Reavis projects in Slo- supply will reach 150,000 sqm in 2014, in a year. “Th is puts pressure on landlords and vakia and the Czech Republic. a city with a total stock of a little over two it takes longer to get tenants into a build- Robert Papp, senior consultant at the Hun- million sqm. Th is is signifi cantly lower than ing and banks can get nervous. Th is can garian fi rm Robertson argues that the dif- Prague and Budapest and half of the stock force landlords into off ering fi nancial incen- fi culties of the Hungarian offi ce market are in Warsaw. Prime rents are quoted at €18.5 tives and concessions,” said Tewfi k Sab- grossly misrepresented. “Th e right asset in per sqm per month with vacancies put at 15 onyui. Pre-lease requirements from lend- the right location will have no problem let- percent, according to JLL. However, vacancy ers for Prague offi ce developments are put ting as has been the case with Skanska’s data should be treated with caution as it var- at 40-50 percent. Green House and Atenor’s Váci Greens,” he ies widely depending on the sub-market. Although offi ce development in the Hun- said. Bucharest, Prague and Budapest are garian capital is limited, cranes working in Another CEE developer, Futureal has regarded as being at the bottom of the the Váci út business district are an indi- launched the €170 million Budapest One offi ce rental cycle in contrast to Warsaw, cation of the popularity of the area with business park adjacent to the terminus where rents are falling, according to C&W.
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Of course, this trend also poses risks. Risks and opportunities – In the near future, for example, we will need to keep a close eye on developments in Warsaw: large volumes of high quality What do CEE markets off er? fl oor space come onto the market and will increase the competition and – in some OPINIONS What are the most attractive markets in CEE? How have the diff erent areas – the low vacancy rates will rise in the markets been developing after the crisis? What are the risks on the vari- future. At the same time, potential stays high ous regional markets? What opportunities do the diff erent pricing and in areas with less development activity. Bucharest has emerged as highly prom- yield spreads off er investors? Is it time for the real turning point for less ising: demand is high for centrally located favoured markets? What are the most attractive investment assets in offi ce space, which opens up defi nite oppor- Budapest? Leading CEE experts share their opinion. tunities for development activity. Due to our expertise, we consider Hungary an attrac- KATALIN MAJOR tive market, too, with one weakness: the low availability of external fi nancing. With regard to the current Ukrainian- Bruno Ettenauer, CEO, Poland, property prices are partly under the Russian confl ict, I think that the middle CA Immo AG. production value which makes the region European industrial nations will be more rather attractive for investments. Th e vol- affl icted than the geographically close CEE In our view the markets of the CEE region ume of transactions is increasing, especially countries. Most likely, the losers in this con- are developing in diff erent ways. What most in Poland. Due to the current pressure to fl ict will be the European industrial nations of these countries have in common is that invest, money is fl owing into the market and and Russia, while Asia and also the USA will the rental level in the offi ce sector is at a low, real estate is in demand on account of the remain unscathed or will even benefi t from that is to say a sustainable level. Excluding prevailing interest rate situation. this situation.
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1. 2. 3. 4. 5.
1. BRUNO ETTENAUER, CEO, CA IMMO AG; 2. JENŐ FARAGÓ, INVESTMENT ANALYST, PORTICO INVESTMENTS; 3. MIKE EDWARDS, HEAD OF VALUATION & ADVISORY, CENTRAL EUROPE; HEAD OF CAPITAL MARKETS AT CUSHMAN & WAKEFIELD; 4. DAMIAN HARRINGTON, DIRECTOR OF RESEARCH, EASTERN EUROPE, COLLIERS; 5. DIETMAR REINDL, COO IMMOFINANZ GROUP
more investors tend to forget that the cur- Th e best opportunities are the core ones. Jenő Faragó, Investment rent good data are not exactly a result of a Th ere are clear arguments for future yield Analyst, Portico Investments well-founded and well-governed economy. compression and rental growth. Vacancy A positive mood is spreading on the mar- Th is might after all be indiff erent from the in the best buildings is actually quite low ket, some are optimistic about the coming point of view of the result, as most market – I would suggest sub-10% - and rents and years, and some are already positive about actors move when there is confi dence in the incentives are beginning to readjust from a the present. Pessimists are in the minority. market. If some start to believe that things tenant’s market. Th e lack of supply in recent Th e numbers appear to support this mood. are going well and others follow them, we years means that there is little prime stock Real estate investment volumes are up. In might end in an upward spiral, attracting available and pressure could be brought to some countries, 2014 forecasts say they will more foreign capital – and the optimists will bear on rents again - indeed rents have to hit 2006-2007 levels, and all countries’ prog- nod and say: “I told you so”. increase to justify development and, based noses talk about the highest investment vol- on recent statistics, demand seems to be umes since the crisis. Th is is supported by increasing. good GDP data and GDP forecasts, the Mike Edwards, Head of Valuation As for the attractive assets in Buda- lowest unemployment levels in a long time, & Advisory, Central Europe; pest, investors are focussed at polar oppo- growing industrial output and what is most Head of Capital Markets at site sides of the market. Some are look- important for us: increased retail spending. Cushman & Wakefi eld ing at distressed assets, whilst others are By looking at Portico’s portfolio we can con- Th e diff erent markets have their own merits. after core assets with long leases. Owners’ clude that in all our countries tenants report Poland is seen as the most established and expectations are still some way from buy- increasing turnovers each quarter. therefore stable market off ering buyers a vis- ers’ for “value add” opportunities, such as A more in-depth look at the region reveals ible exit, but Budapest’s comparative pricing those assets with vacancies etc. One issue that Poland and the Czech Republic are tak- may off er better prospects for rental growth we have identifi ed is that there are a number ing the lead and the main investor focus is and yield compression in the medium term. of investors looking for large volumes that on these two countries, while other coun- Last year, Hungary saw next to no invest- the market cannot match. You will begin tries are feeding on the crumbs only and ment; this year we have already seen Green to notice investment in property com panies investment activity comes mostly from House and Eiff el Palace trading and there rather than the assets themselves as a result. domestic players. Th e fact that the Hungar- are various well-known assets under due ian real estate market was shaken up by a diligence. Investors are actively looking very unusual player, the Hungarian National and, critically, access to fi nance is increas- Damian Harrington, Director of Bank, sends ambiguous signs to foreign ing – but let’s not get too carried away just Research, Eastern Europe, Colliers investors. yet. Th e focus is on the very best-class assets In 2013 commercial real estate volumes While more and more investors were con- and when one considers the fundamentals for CEE reached €10.8 billion, up around vinced that the Hungarian real estate mar- of these assets – occupancy, class of tenants, 20% on 2012. Th rough the fi rst half of 2014 ket had bottomed out and the next years location and quality – then Hungary seems investment volumes across CEE have been may therefore be regarded with cautious very underpriced compared with other mar- positive, but have slowed marginally, los- optimism and a slow catching up, more and kets. It is natural that investment is returning. ing some of the momentum that was gained
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during 2013. Th is is primarily the result of it is beginning to moderate in those mar- Looking at our core countries, Poland and a slow-down in Russian investment trans- kets that led in 2013, including Moscow, St. the Czech Republic are currently the most action volumes, due to concerns over the Petersburg and Kyiv, and is starting to rise in active transaction markets in Eastern Europe. current Russia/Ukraine confl ict. Th e Rus- other peripheral cities, including Bucharest, Th e sale of the Silesia City Center, our Pol- sian market has seen €750 million worth Bratislava and Tallinn. ish shopping centre, during 2013/14 repre- of deals close in H1 2014, but the hiatus in As for the future, if investment demand sented a benchmark deal for the CEE region. OPINIONS international investor activity puts this fi g- continues to diversify across the region in However, investors are also shifting their ure below the €2.5 billion, half-yearly aver- the second half of 2014, this could take us attention to other CEE destinations – e.g. age which the market has posted over the back towards a more robust “Mid-Case sce- Bucharest – because of the attractive risk- last three years. nario” for investment volumes. However, return profi les. With regard to our develop- Although there may have been a decline it is more likely that it won't be until 2015 ment activities our focus will be – besides in closed deals in Russia, this should not before regional investment genuinely picks Germany – fi rst and foremost directed detract from the growing popularity of the up pace outside of the core CEE markets of towards Poland, Romania and Russia. core Polish and Czech investment markets Poland and the Czech Republic. As emphasised in the past, our business in which continue to see increasing deal vol- Russia is a source of considerable satisfaction umes and should at least match 2013 levels. in spite of setbacks: the returns are signifi - Equally, investment activity is also picking cantly higher than in Eastern and Western up across the Tier 2 markets of the region Dietmar Reindl, Europe, and the occupancy in our proper- - notably the Baltics, Hungary and Roma- COO IMMOFINANZ Group ties is well over 90%. However, the crisis in nia. Th is has led to some yield compression Th e spin-off of BUWOG gave IMMOFI- Ukraine, its further development and the in these locations during the fi rst half of the NANZ a sharper profi le as a commercial sanctions imposed by the west and Russia year. Th ere are also signs of increasing inter- property specialist with a focus on Cen- represent uncertainty factors that have sub- est further south and east in the likes of Bul- tral and Eastern Europe. Russia is now our stantially clouded the mood of investors over garia and Serbia. largest single market, followed by Aus- the past weeks. New development activity is also begin- tria, Romania, Poland and Germany. Even Apart from these developments, the Euro- ning to recover in the smaller markets of the though Eastern Europe is still not the pean Central Bank has also set a signal in region. For example, as of H1 2014, the vol- growth story we would like to see – it would favour of real estate investments with its ume of offi ce space under construction in be good to have stronger impulses from the interest rate announcements. Th ere is no Budapest is at its highest level since 2010. economy for our rental business – we are end in sight to the loose monetary policy Although as the individual markets adjust to convinced of the long-term growth story and the related low interest rates. Th at, in such a large volume of incoming new supply, and the convergence potential of this region. turn, has increased investors‘ search for rel- many have continued to experience fl uctuat- In 2013 the total return on our CEE prop- atively safe investments as an alternative to ing vacancy rate conditions through the year. erties brought us the “IPD Property Invest- the money market. Th e economic recovery Similar movements can be seen in the ment Award in Central & Eastern Europe” in Central and Eastern Europe is continuing retail segment. While there is still a huge for the highest performance among the 49 with a higher GDP growth than in Western amount of new construction underway portfolios surveyed in this region. Europe. ADVERTISEMENT
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16-27-pt1-REs-1409.indd 25 9/12/14 1:18 PM REsource attractive rent or sell it with ease. In Hungary there Budapest: an will be some industrial and production opportunities in the regions and smaller investment market scale commercial investment in provin- cial cities but this will be more of interest to local investors. Downtown residential INTERVIEW How does a CEE real estate pioneer see the post-crisis CEE market? How may fi nally pick up and start to show good did CEE markets transform into mature property markets starting in investment returns after being fl at for ten the late nineties? Which countries are the most attractive in the region? years, thanks to the government invest- What does the Budapest market off er? We spoke to Alan Vincent, B.Sc., ment in the downtown area, the City and the 5th district, which are fi nally bring- MRICS, managing director of ConvergenCE. ing out the true beauty of Budapest land- KATALIN MAJOR marks.
ou are one of the real estate larly in the offi ce sector) in Warsaw. On Which markets are the most attrac- Y pioneers in Central Europe, the other hand, being the capital city of tive in CEE at the moment in terms you have experienced how a country of 40 million people, Warsaw of investment? Budapest is still very CEE markets developed over the last will continue to be an attractive invest- cheap, compared to Warsaw or Prague, 20 years. You have seen a lot: the boom ment location for global investors. I fore- the yield diff erence is still considerable. of the late nineties, the crisis, the post- see a quite illiquid investment situation Is Budapest still a market for opportun- crisis period, and now – hopefully – the approaching in the smaller capital cities istic buyers or are there opportunities stabilisation. How do you see the region (similar to Vienna) once the best build- for institutional capital as well? now in the context of the past 20 years? ings have traded to traditional long term For institutional investors this is a ques- I think all of the Central European mar- institutional investors. tion of returns. Th ey are chasing yield. Th e kets – Poland, Hungary, the Czech Repub- It’s been interesting to see that although brave ones who come in early will benefi t lic and Slovakia – have reached a level of Hungary and Budapest were way ahead of the most. Comparing prime offi ce invest- maturity now. It’s a logical progression any of the other CEE countries in the early ment yields for the fi rst half of 2014, with from the underinvestment during commu- nineties, in terms of development and Warsaw at 6%, Prague at 6.25% and even nist times followed by the boom in foreign FDI, they started to fall back from about Bratislava at 7%, I see Budapest as the direct investment which caused this mas- 1998. Th e cause was partially demographic, most attractive location with comparative sive development through the nineties up which is understandable compared to yields for the best offi ces at 7.25%. Simi- to 2007. I would say the fi rst ten years was Warsaw, but obviously as we all know, lat- lar spreads are also present in the retail catching up and the last fi ve years became terly there was a perception problem with and industrial sectors. In fact these yields a speculative boom. As I have said in the Hungary, because it was very much seen as are already moving down fast (witness the past, that period will in future be com- a small peripheral market. When Greece recent sales of Vision Towers North and pared to the 1880s and 90s in terms of the crashed, a lot of investors were expecting Eiff el Palace). Investors realise that they development of Budapest. that something similar would happen here. can buy here at a discount compared to Each market has its own particular Th is, combined with all the politically other CEE capital cities. characteristic. As such CEE can no longer motivated negative media that followed Opportunistic buying of distressed be seen as a homogenous investment loca- the fi rst Fidesz landslide victory, did not assets has been much more diffi cult than tion. It’s clear that the Polish and Czech help bring investment back to Hungary. expected, due to the unclear and frag- real estate markets came out of the crisis Fortunately we seem to be past that now. mented approach as well as overpric- in better condition than Hungary, both in Budapest is catching up, but from now ing by the banks holding these portfolios. terms of the health of local banks and in on I see signifi cantly fewer development Th at was an opportunity that I think eve- terms of investor perception, but it seems opportunities than in the past, as it has rybody expected but it hasn’t really hap- Budapest in particular is catching up. become a mature market. Th e future will pened. Th e banks, of course, will be very I see Budapest, Prague and Bratislava as be far more controlled and less exciting; happy to see capital values improving at more stable rental markets than Warsaw the development and renovation of the the best end of the market and they may going forward, mainly due to the urban existing stock and a more normal mar- believe that this will also have a positive structure and limitations of the built fab- ket will follow. We are defi nitely not going impact on their portfolios, but I think that ric of these cities, compared to the rela- back to a situation where you can build an is going to take some time, because they tively unlimited development potential, offi ce building in Soroksár, for example, are at the complete opposite end of the and therefore risk of oversupply (particu- call it an A grade building and expect to risk scale.
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Offi ce market indicators in Budapest appear to have improved in the last 12 months. What do you expect for the next 1-2 years? I believe that there will be a steep increase in interest from investors, which INTERVIEW will raise capital values quite signifi cantly. I expect retail and offi ce yields to reach the mid-6% level, rents to stabilise and conces- sions such as rent free periods to signifi - cantly reduce as vacancy continues to fall. Th e big challenge in Budapest is going to be the renovation and re-use of historic build- ings, fi nding ways to make them effi cient.
Th e Eiff el Palace is a very good exam- ple here. Th ere is an interesting issue around this offi ce building as the Cen- tral Bank just bought it. Th e transaction is quite controversial, experts are debat- ing whether this was a good investment and whether a central bank should invest in real estate at all. What do you think about this issue? It is diffi cult for anyone who is not a central banker to make a judgment. I can’t really second guess the investment strat- egy of the Central Bank without knowing what their investment objectives are. I do think there is a place in every investment portfolio for real estate. It is a long-term secure asset, which holds its value. If you ask me what the ten best offi ce investment projects in Budapest are, Eiff el Palace is defi nitely one of them. It is a great building, it was an expensive investment and clearly the developer didn’t cut any corners in terms of the quality of the building. It also has a very good long-term tenant in PwC. As a real estate investment I would say it is a rather conservative one. If the ques- tion is whether the Central Bank should be buying real estate or not, I think that is one for bankers, not real estate experts.
As for ConvergenCE, what are your plans for the next years? We are looking at investing in existing assets and developments at the moment, as well as continuing to expand our niche service lines of asset, property and project management services, to a select group of international investors.
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ace (the former Ballet Institute) on Andrássy Time for the real turnaround Avenue was sold to a Luxembourgish com- pany belonging to a sheik of the Qatari royal The years of the crisis have completely transformed the allocation of family, at an undisclosed price. In August, investment volumes among Central and Eastern European countries. the southern Klotild (also known as Matild) Palace was purchased by Melis Investment, ANALYSIS The biggest winner is Russia and the country that has lost most of its a unit of the Turkish Özyer Group for EUR attractiveness is Hungary. 6.85 million. All three buildings are expected to be converted into hotels and the Párisi ÁKOS BUDAI Udvar is also expected to feature restau- rants and a conference center after renova- ccording to data compiled by retail segment also point to an improving tion. Th ese purchases show that Hungary is A Colliers International, prior to situation. Futureal purchased Sziget Center gaining momentum among foreign investors 2009 Hungary received 17% of all in Tököl, while another Hungarian investor, and also that we will see grey spots in the city CEE investments, while the same number Portico acquired three hypermarkets occu- centre fi lled with life once more, which could for the post-2009 period is only 5%. Th ese pied by Spar from the Raiff eisen Fund for further increase Budapest’s attractiveness. are daunting numbers, but luckily for Hun- EUR 3.6 million. Furthermore, a 50% stake gary, several reports on increasing invest- in the Új Udvar shopping centre in Budapest Unorthodox purchases ment activity have surfaced in the fi rst half of was sold to individuals initially involved in A special kind of investor has also become the year, with many stating that international its development. active this year. Th e National Bank of Hun- investors are also returning to the market. gary (MNB) has purchased two proper- All signs point to investment appetite in Eastern capital ties in the past months. First, in July, it pur- Hungary signifi cantly increasing in the fi rst Buyers from the Gulf region have been chased a castle hotel in Tiszaroff . Th e fi nal half of 2014. Th e fi rst open market transac- actively present on the Hungarian hotel price remains unknown, but a few months tion in years occurred in May, when the Ste- market for years now. H1 2014 saw the earlier this property was up for sale for EUR fániaPark offi ce building was sold by IVG to acquisition of the Intercontinental Hotel by 1.84 million. Th e central bank plans to oper- an unnamed German investor, marking a the Al Habtoor Group. Th is was the second ate the facility as its own resort in the future. real turn in the Hungarian real estate capi- deal the Dubai-based real estate conglom- Th e second and much bigger transac- tal market. Also, the biggest transaction in erate made in Budapest after buying the Le tion was the purchase of a premium-cate- the CEE retail market in Q2 2014 happened Meridien Hotel in 2012. gory offi ce building in the downtown area of in Budapest. ING Real Estate Development sold their remaining 50% share in the Allee shopping center to an ING insurance fund for EUR 95 million, which helped Hungary record its best Q2 results since 2010. In July, Skanska announced the sale of its “Class A” Green House offi ce build- ing in downtown Budapest to the Hungar- ian open-ended property fund Torony Real Estate Investment Fund, managed by Diófa Fund Management, a member of the FHB Group. Green House was completed in 2012 and currently 98% of the building is leased. It is the only LEED Platinum-certifi ed offi ce building in Hungary. Th e EUR 36 million ALLEE SHOPPING CENTRE transaction will be recorded in Q3 2014 and it is a milestone in the Hungarian real Investors from the Middle East also Budapest. Th e property known as Eiff el Pal- estate market, since the last 20 years rarely showed considerable interest in aban- ace is one of the top ten offi ce buildings in saw Hungarian institutional investors mak- doned landmarks in downtown Budapest. the capital and it was sold to the MNB for ing similar purchases. In May, Párisi Udvar on Ferenciek Square EUR 45.3 million. According to MNB gov- It is not only large, international deals was acquired by the Mellow Mood Group ernor György Matolcsy, the transaction took that show positive movements in the invest- (developers of the nearby Klotild Palace) for place at 6.5-7%, indicating that the offi ce ment market: several smaller deals in the EUR 6.7 million. In June, the Dreschler Pal- building was overpriced. Th at yield level
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seems considerably low, since no similar Hungarian home transaction took place in the previous 12 months in Budapest below 7.5%. loans: rewriting the past Th ese purchases are controversial both from a political and an economic point of Du passé faisons table rase (Of the past let us make a clean slate) – this view. In is unclear why the central bank widely known line from the Internationale soon takes on a new mean- ANALYSIS would buy overpriced property, and it is debatable whether an institution like the ing for several hundred thousand Hungarians with foreign currency MNB really needs a castle hotel or a “Class loans. A” offi ce building. ISTVÁN PALKÓ Still not there yet György Lindwurm, Investment Associ- asses of credit agreements years ago an exchange rate limit scheme ate at DTZ Hungary agrees that increasing M are being rewritten in Hungary, was introduced with the concurrence of investment activity can be seen in the Hun- probably soon transferring a sum the banks and the government, but irratio- garian real estate market, but he believes equivalent to almost 3 billion euros from nally enough, only a total of 40 percent of that most international institutional inves- the banks’ tills to the debtors’ pockets. those entitled have laid claim to this so far. tors have merely invested in Poland and Meanwhile in the area of new lending the Meanwhile assessment of the rate spread the Czech Republic so far. In some cases, sky is not cloudless for the banks either: (use of selling and buying rates, i.e. hetero- Hungarian assets have been excluded from burgeoning home loans will shortly be geneous rates) used during disbursement regional portfolio investment deals. policed with new regulations by the cen- and repayment of foreign currency loans So far, in 2014, all signs have been pos- tral bank. and the unilateral contract modifi cations itive; there’s been more movement in the carried out by the banks continues to be market, the number of distressed prop- Fresh hopes, inherited problems inconsistent, and debtors’ ability/willing- erties decreased and in the case of some For years Hungary has been reckoned ness to pay is deteriorating: the proportion properties that are fully rented out for a a black sheep in the region from many of undischarged home loans according to longer term we could even see bid wars angles in connection with the banks. It also data from the end of June is 13.6 percent, starting. Yields have decreased to between falls signifi cantly behind in lending to the of which that for foreign currency loans 7% and 8% for offi ce buildings and to population compared with the eurozone is 17.7 percent. In addition, the eviction around 8.5-9% in the industrial segment, and other countries in the region: reckon- moratorium and other government mea- according to György Lindwurm. ing without revaluations, in the past year sures restrict the banks’ portfolio clean- Th is corresponds to prime offi ce invest- household credit has fallen back by close ing, so the banks are compelled to post- ment yields for Warsaw at 6%, Prague at to 5 percent, whereas Slovakia, Poland and pone addressing the problem. As a result 6.25% and Bratislava at 7%. Budapest is still the Czech Republic produced a growth of of all this, the risk cost to the banks con- very cheap compared to the Polish or the 5-10 percent. (Figure 1) New loans may tinues to be very high, and although they Czech market, and the relatively low yield have increased signifi cantly compared have fallen signifi cantly in recent times, levels could steer investors in Hungary’s with the nadir of 2013 (for instance the their resource costs are not be neglected direction, but most of them still consider month of July brought a jump of 75 per- either. It can best be explained by these the country and political risks too high. For- cent compared with one year earlier), but two factors that the interest surcharge on eign investors are still cautious; they pre- for the time being this has not counterbal- newly awarded home loans continues to fer to buy properties in the two main mar- anced the repayment of foreign currency be very high in Hungary by international kets of the region that off er stable cash-fl ow loans taken out before the crisis. standards (Figure 2). and low risk. However, macroeconomic Home loans in this country have already conditions and the fi nancing environment been bleeding from many wounds: close The foreign currency loan in Hungary have considerably improved to half the credit stock is still foreign cur- package is here over the last year. Offi ce market indicators rency-based, mostly denominated in Swiss Based on the result of the April parlia- also paint a more and more positive picture francs. Th e exchange rate for the Swiss mentary elections, newly in possession and with the economy picking up we might franc has grown by more than 60 percent of the support of two-thirds of parlia- see increased end-user demand. Th anks by today compared with the average rate ment the government probably felt that it to these developments, despite the risks when the loan was taken out, signifi cantly had received the mandate to settle some related to instability, we should see inter- increasing the burden of debt on house- of the above problems in a way that was national institutional investors returning to holds. In order to restrict the unfavour- unfavourable to the banks. Th e responsi- Hungary in the next year. able exchange rate eff ect, two and a half bility, however, was only partly the gov-
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ernment’s: on June 16th, the Curia, the With regard to the precise calculation of recover their losses resulting from any supreme judiciary in this country, subse- the sum to be returned to those with for- governmental measures (the bank tax quently extending the result of a specifi c eign currency loans because of the rate introduced in 2010, the fi nal repayment of lawsuit, resolved to declare the rate spread spread, the central bank provided guide- 2011-2012, the transaction fee introduced used with foreign currency loans to resi- lines at the beginning of August. Use of in 2013) with capital injections received dents to be unethical, and instead ordered the published formula is in principle not from the parent bank. Foreign-owned ANALYSIS the retroactive use of the central bank’s obligatory for the banks, but the cen- banks in Hungary have received a capital offi cial exchange rate. And in connection tral bank may enforce this based on its increase of close to a total of 1000 billion with the fairness of unilateral interest rate supervisory authority. Th e essence of HUF over the past fi ve years in such ways. increases, 7 strict requirements were set the formula is that the banks must take up. If a contractual condition does not con- into account current overpayment by cli- Will the foreign currency loans form to any one of them, it is to be regarded ents retroactively as advance payment of be converted to HUF? as unethical. With this the contracts as a the capital sum of the loan. If this for- Settlement of the foreign currency loan whole do not become invalid, but the indi- mula is extended to the settlement of the issue from a legal dispute angle, therefore, vidual conditions enabling modifi cation of hordes of interest rate increases which are is expected to be complete by the end of the contracts do. expected to prove unethical, then accord- this year, and the indebtedness and debt As the Curia’s resolution only applied to ing to estimates a loss of around 900 bil- repayment obligation of the population will foreign currency loan contracts aff ected lion HUF (almost 3 billion euros) is to be fall considerably. Although the fi nancial by lawsuits, at the suggestion of the gov- expected for the banks. Assuming that in position of the banks is deteriorating signif- ernment, Parliament decided on July 4th the case of extant contracts the amount icantly, a positive point is that the vulnera- to declare in law that the rate spread in all due back is settled in such a way as to bility of the country because of foreign cur- the residential foreign currency loan con- reduce the outstanding capital debt of the rency resources (primarily short-term) may tracts was unethical, and in addition to foreign currency loans, the capital debt of be reduced, and the available income of express the opinion in law that unilateral an average person with a foreign currency households may increase. With this, how- contract modifi cations (typically inter- loan may fall by almost one fi fth compared ever, the banks’ walk to Canossa because of est rate increases) were unethical in the with the present amount by the beginning foreign currency loans will not have come case of HUF loans as well as foreign cur- of next year, and the regular payments by to an end: according to statements by gov- rency loans. Instead of the clients, the bur- close to one quarter. erning party politicians, at the end of 2014 den of proof is transferred to the banks: by All this will result in a sizeable loss for or in the fi rst half of 2015 the foreign cur- around the end of the year they may prove, the Hungarian banking sector, though rency-based mortgage loans (and possibly within the scope of an enforced judicial procedure prescribed by law, that they proceeded ethically in the cases of unilat- Fig. 1: Annual transaction-based growth rate of household loans in eral contract modifi cation. Th ese lawsuits international comparison are underway at present; based on the % 15 initial judgements, the banks don’t have December 2012 December 2013 June 2014 much chance. 10 As the Curia’s aforementioned 7 condi- 5 tions (which are also authoritative at pres- 0 ent for the Metropolitan Court transact- -5 ing the lawsuits) are extremely strict with regard to ethics, it is predictable that the -10 banks will not be able to defend the deci- -15 states Baltic Czech Poland Bulgaria Slovakia Hungary Republic sive majority of the loan contracts before Romania countries Euro area the court. It is to be expected, therefore, that besides the rate spread, clients will get Mediterranean SOURCE: MNB, ECB, RESOURCE back the rise in regular payments due to the unilateral contract modifi cations, and the interest rate on their loans will return probably not a stability problem. Close to other foreign currency loans) may be con- to the original level. As to exactly how and four fi fths of the foreign currency loans verted to HUF. in what sum, a law appearing in autumn to residents have been fi nanced by major When they hear this, the fi nal repay- (perhaps September) may make provi- banks under Western European own- ment of 2011-2012 may once again come sions. ership, which so far have been able to to mind for bank management (as well as
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Fig. 2: International comparison of spreads on housing loans extended in domestic currency (%) 7
6
5 ANALYSIS
4
3
2
1 HU SK RO SLO PL CZ Euro zone 0 II. II. II. II. II. II. II. III. III. III. III. III. III. IV. IV. IV. IV. IV. IV. 2008. I. 2009. I. 2010. I. 2011. I. 2012. I. 2013. I. 2014. I. SOURCE: ECB, NATIONAL CENTRAL BANKS, MNB, RESOURCE GYÖRGY MATOLCSY
credit rating experts and foreign inves- attempting to draw on the lessons of the Hungarian home loans, therefore, now tors). At that time, better-off foreign cur- past. It was announced on August 27th: just reviving and comprising around one rency borrowers could get rid of their the debt brake regulation promised in quarter of the sum advanced before the cri- loans with a 25-30 percent exchange rate the spring will be introduced on 1 Janu- sis, are facing a great many challenges. A discount, but the banking sector (taking ary 2015. Within the scope of this, tak- huge issue is how bank lending will react to into account the compensation received ing out excessive loans by the population the fi nancial loss resulting from the foreign from the bank tax) lost more than 260 bil- will be restricted by three measures: 1. the currency loan package, and what fraction lion HUF. If in accordance with the prom- instalment-to-income ratio index will be of the population will drop out from among ises of certain governing party politicians introduced, 2. the credit cover index will potential borrowers in consequence of the the foreign currency loans were now con- be readjusted (Figure 3) and 3. verifi cation fresh measures by the central bank. Tar- verted to HUF not at the market exchange of legal income will be needed for taking geted handling of the undischarged loans rate, but at some discount rate, then this out loans. According to the MNB, the new and acceleration of the residential credit would result in a renewed major capital regulation will not really push back resi- portfolio cleaning are as yet unsolved tasks. loss for the banking sector. Whether the dential lending, but it will provide the cen- Th ere is a reason for hope, however, as irre- government will dare to undertake this, tral bank with a new tool should the pro- spective of the state of the fi nancial sector cannot be known as yet. cess of residential indebtedness become Hungarian economic growth has begun, excessive in the future, as the indices in the wake of which domestic housing This is still not the end introduced now may be made more severe demand is gradually increasing. It is con- Besides dealing with inherited problems, later by the central bank (on the upward ceivable, therefore, that Hungary will not the Hungarian state, and with it the Hun- curve of the credit cycle, for preventative solve some of the problems of residential garian National Bank (MNB), is clearly purposes). borrowing, but grow out of them.
Fig. 3: Debt brake regulation valid from January 1, 2015
Income Instalment-to-income ratio (PTI) HUF EUR Other currency Under 400 k HUF 50% 25% 10% At least 400 k HUF 60% 30% 15% Credit type Credit cover ratio (LTV) HUF EUR Other currency Mortgage loan 80% 50% 35% Vehicle loan 75% 45% 30%
SOURCE: MNB, RESOURCE
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28-42-CEE-pt2-REs-1409.indd 31 9/11/14 7:03 PM REsource Some succeed, others don’t When could the regional housing markets recover? As in other parts of the continent, the property markets of the Central Eastern European ANALYSIS region are characterised by polarisation. Certain countries are on their way out of the pit, whereas others are just approaching the bottom.
TÜNDE MADUROVICZTANCSICS
he European housing mar- Hungary, property prices increased in Bul- autumn of 2013 to the fi rst quarter of 2014, T kets are characterised by dichot- garia, Romania and the Czech Republic in prices have risen by 1 percent. omy. Th e downhill trend follow- the fi rst quarter of 2014. Th e downhill trend Th e Romanian market, which likewise suf- ing the world economic crisis of 2008 has continued in Croatia and Slovenia, whilst fered a housing market shock involving a fall not stopped in many countries, and no Slovakia was characterised by stagnation of more than 40 percent between 2008 and turnaround has yet occurred. At the same and a slight fall. 2013 after the property market balloon burst, time, another group of countries is typi- is also showing signs of recovery, with resi- fi ed by a much more favourable environ- Where have prices begun to rise? dential property prices rising in the fi rst quar- ment, and recovery can be observed. A rea- Th e prices of residential properties are rising ter of 2014. Th is may give reason for hope, son for confi dence is also given by the fact in Bulgaria, which suff ered one of the great- but the future is still in question. In recent that the fall is slowing in several countries, est price falls in the crisis, with housing los- years a rise in the fi rst quarter has been fol- and the market is approaching the bottom ing almost 30 percent of its value between lowed by a fall again in the rest of the year. of the pit. Th e prices of residential proper- 2008 and 2010. Th e crash had eased off by In comparison with the region, Hun- ties increased most in Ireland, the United 2013, but even so there was a fall of a fur- gary belongs to the middle fi eld with regard Kingdom, Sweden and Germany during the ther 6 percent. In the background of the to the eff ects of the crisis on prices, with a past year, whereas the greatest fall was suf- huge drop of 6 years ago was a price bubble housing market price fall of around 18 per- fered by markets in Italy, Holland, Spain and generated by enormous foreign demand due cent occurring between the zenith and the Portugal. to the approaching accession of the country nadir. In the fi rst quarter of the present year Th e crisis also brought huge losses to to the EU, which then burst with the credit prices have shown a rise of close to 2 per- the property market in the Central Eastern crisis of 2008. Many regarded the country cent compared with the last quarter of 2013, European region, and the present dichotomy as the next Spain. Th e rise experienced at which may be a sign of recovery. typical of the continent’s property markets present is therefore positive news, but the Of the countries in the region, in the is found in these countries too. Apart from increase is by no means drastic. From the Czech Republic, likewise showing signs of
Housing price trends (2010=100) Housing construction trends 2010=100 105 135
100 CZ AT 115 BG SK 95 BG SK 95 RO PL 90 HU CZ SLO 75 85 SLO HR 55 80 RO HR HU 75 35 2013Q1 2013Q2 2013Q3 2014Q1 2014Q2 2011Q4 2012Q1 2012Q2 2012Q3 2013Q1 2013Q2 2013Q3 2014Q1 2012Q4 2013Q4 2013Q4 SOURCE: EUROSTAT, BIS, RESOURCE SOURCE: EUROSTAT, RESOURCE
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upswing, there was a much smaller fall com- the property markets of Croatia and Slove- ber of permits reach the level experienced in pared with the above with regard to hous- nia are clearly performing the worst. Th e 2010. Here growth was discernible right up ing prices. Compared with the third quarter only positive thing that can be said is that to the second quarter of 2014, although a of 2008 which is regarded as the peak, the the price fall seems to be slowing. Th e Croa- sight check in expansion is seen with respect fall in residential property prices remained tian market is still groaning under the losses to the past quarter. under 10 percent up till the fi rst quar- caused by the earlier bursting of the residen- But positive signs have also appeared ANALYSIS ter of 2013, and since then a slight growth tial property price bubble, which was created in other countries, although these are still has been experienced with prices rising by due to increased interest from foreign inves- rather fresh at present. Th e new data from a little more than 1 percent between the tors, as in Bulgaria and Romania. the second quarter of 2014 further con- last quarter of 2013 and the fi rst quarter of In contrast to the price trends, trends fi rm the hope of resurrection, growth hav- 2014. Prices are also rising in Poland, where in the number of transactions was much ing continued in several countries. Th ese housing market players experienced a rise more similar in the various countries, the include the Czech Republic and Hungary, of more than 2.2 percent between the fi rst most residential properties changing hands but favourable signs are also appearing in and last quarters of 2013. Prices also rose in between 2006 and 2008 in the countries of Poland. Construction is being launched Ukraine in 2012 and 2013 on the residential the region. Growth in residential property from the lowest level in the case of Hungary, property market which in any case only suf- sales is seen at present in Hungary, Romania and will still not reach even half of the 2010 fered a slight fall of 7 percent in total follow- and Bulgaria, although the rise is rather slow. rate. ing the crisis. At the same time this tendency At the same time, the number of transac- What can we count on in the future? could be broken due to the Ukrainian crisis. tions continues to fall in Croatia, according Of the countries in the region, Slovakia to data from the OTP Jelzálogbank (Mort- Concerning the housing market trends, it is still characterised by stagnation, which gage Bank). is worthwhile examining economic devel- has lasted for more than a year. So we still Where has construction begun? opment in the individual countries, as this need to wait for a signifi cant recovery in can have signifi cant infl uence on the prop- this county which suff ered a fall in residen- Th e crisis discouraged developers from erty market. In the case of the region it can tial property prices of a little more than 24 engaging in housing construction, as is be said that following the fallback of 2012, percent during the crisis. Prices are likewise clearly shown by the drastic fall in the num- the economy in ever more countries once stagnating in Austria, which is the only one ber of building permits. Th is was most again entered a growth phase in 2013, or of the countries in consideration which has noticeable in Hungary, but developments the extent of fallback eased off , which may experienced a signifi cant growth in prices also dropped off greatly in Bulgaria and Cro- have a positive eff ect on the housing mar- since the crisis broke. Th e value of residen- atia. ket. Last year, economic prospects improved tial property in Vienna has been rising since At present the continent is also divided in Romania, Hungary and Bulgaria, and the 2004, so almost twice as much had to be paid with regard to trends in the numbers of extent of fallback dropped in the Czech for homes at the end of 2013 than 9 years building permits, although developments Republic and Slovenia. earlier, according to data from the Austrian are being launched in ever more countries. In light of the fi gures we can be confi - National Bank. Of the countries in the region, In the region, only in Bulgaria does the num- dent in respect of several countries that the negative trend characteristic of recent years Annual changes in GDP in the CEE countries (%) will fi nally turn round this year, and this will perhaps even persist. In Bulgaria the trend 15 Bulgaria Austria Slovenia in housing construction indicates recovery, Czech Republic Poland Slovakia as do the prices, but we can also hope for Hungary Romania 10 the resurrection of the Hungarian housing market, where besides the rise in prices, the number of transactions seems to be expand- 5 ing. Th ere is positive news in the case of Romania too, such as a growth in the num- ber of transactions, but on the whole the 0 2007 2008 2009 2010 2011 2012 2013 market is just about convalescing. For the time being, the residential prop- -5 erty market in Croatia has not fully come round since the crisis, with neither prices nor construction making an imminent turn- -10 around likely, and furthermore the number SOURCE: EUROSTAT, RESOURCE of sales is falling.
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tres of economically less prosperous coun- Th e Hungarian housing ties and regions, continue to bring the aver- age down, whereas the capital city and the centres of production signify powerful bas- market is really reviving tions with respect to both transactions and the turnaround of average prices to growth ANALYSIS The tediously reiterated crisis and its eff ects are slowly beginning to on a local level. fade and a new world is appearing, the wings of a system based on new Prices foundations and values gradually unfolding above the ruins of the hous- Th e changes in average prices can be and ing market, with regard to sellers, buyer and fi nancers alike. We can are reckoned on the basis of various calcula- only trust that the clarifi cation process which has lasted for many years tion methods. Th e Central Statistical Offi ce will persist, and indeed continue, and the market will not quickly forget (KSH) publishes several diff erent types of data series, of which we have taken the sta- the lessons learnt from the passing crisis. tistics examining pure price changes as a basis. It can be clearly seen from the statis- GERGELY DITRÓY tics offi ce’s data series that when quality is lthough slowly, instead of over- ket growth preceding the crisis. And the held constant a kind of positive trend can A priced properties, realistic off er data from recent months show that follow- be seen (at least a reduction in the extent of prices are beginning to appear, pri- ing the seven lean years and a persistent fall fallback), whilst the general price indices still marily in those areas still today dominated in average prices, an increasing number are point downwards. Th e diff erence here, how- by a total lack of demand. Ever more delib- thinking that the time has come to realise ever, lies in the details already referred to. erately, buyers are seeking and purchasing postponed moves, investments anticipating Th e prices of better quality, well-located sec- from the properties on sale in accordance the nadir, and purchases arising from other ond-hand homes (both within the country with their own existing means and require- changes in life situations. and the cities) have already stabilised, indeed ments, and we can only trust that this will Opinions that the Hungarian housing they have begun to rise slightly, but the prop- remain so in the long term. And thanks to market, and principally certain segments erties involved in other transactions con- those hundreds of thousands who have got of it, is now no longer on a downward tinue to bring the average down considerably. into trouble over foreign currency loans, and slope but at the beginning of a rise, are also More sales and purchases the discontinuation of such loans, fi nanc- attested by mutually supporting data. Th e ers are much more circumspect at present signs of stabilisation and growth, however, One of the most striking of the positive in providing credit to home buyers requir- as can unfortunately be perceived ever more signs, which is decidedly important not ing mortgages. Th e market has been able to strikingly in society as well, do not pertain to only with regard to the housing market, but create a basis for slow growth, without any every segment of the housing market. With also the stability and stabilisation of house- kind of state contribution, which promises regard to the still struggling prices, smaller holds and credit institutions, as well as their to be decidedly more stable than the mar- towns and settlements, as well as the cen- trust relationships, is the amount of lending.
Second hand dwellins pure price change Monthly home mortgages in local currency (billion HUF) 103 70
101 60
99 50
97 40
95 30
93 20 2010=100 91 Corresponding period of the previous year=100 10 89 Corresponding period of the previous quarter year=100 0 87 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 2007/01 2007/05 2007/09 2008/01 2008/05 2008/09 2009/01 2009/05 2009/09 2010/01 2010/05 2010/09 2011/01 2011/05 2011/09 2012/01 2012/05 2012/09 2013/01 2013/05 2013/09 2014/01 2014/05 SOURCE: KSH, RESOURCE SOURCE: MNB, RESOURCE
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Crime in your area
Although housing market prices are infl u- tant criteria. In the latest report of Otthon- Budapest and data from the 44 most relevant enced primarily by location, the quality and térkép (Home Map), taking the data pub- settlements with respect to the housing mar- legal background of the given property and lished on the Hungarian Police crime map as ket, both in Budapest and in the provincial ANALYSIS other technical and environmental factors, a basis, you can search the crime statistics for towns, for those settlements with the most house hunters are laying increasing empha- the period in question on a street-by-street active tourism and night life, such as Siófok, sis on selecting not only an appropriate prop- level. This development enables you to inves- and the inner city districts in Budapest, the erty, but also an area with appropriate envi- tigate on the level of crime categories such crime statistics are sky high. ronmental features. The proximity of public as crimes related to motor vehicles, home Of course it doesn’t hurt to note that the transport, schools and services can be incor- break-ins, violence against persons or other average fi gures, as in the case of house prices, porated into the price of a given property crimes, to what extent your residential envi- are not valid everywhere, as the majority just as easily as, for instance, the technical ronment, or the area of your prospective new of the crimes are registered in certain focal features of the building. But when buying a residence, is infected in comparison with the points (such as the Western Railway Station property, the green area index, or even the average. – Nyugati pályaudvar – and surroundings) crime index of the location could be impor- On the map including the districts of where huge crowds are constantly present.
Th e huge fallback after the discontinuation monthly basis compared to the same peri- from an increasing number of good qual- of foreign currency loans (apart from the ods in the previous year. Meanwhile, the ity renovated fl ats and houses, which repre- fi nal repayment period, as clearly seen on CSO’s offi cial data shows that close to 3000 sent signifi cant competition for new hous- the graph) was followed by a relatively sta- more sales were transacted on the Hun- ing and developers. It would certainly be ble period of a monthly 15-20 billion HUF, garian housing market in the year 2013, so desirable with regard to the development of which seemed to take wing in the middle trusting in the preliminary data from 2014, the housing market, if only from the stand- of 2014 and the latest data from July show the year 2012 clearly signifi ed the bottom of point of business environment stability and numbers of 26 billion HUF, following con- the pit with its total number of transactions job opportunities, if new housing develop- tinuous growth. Should this tendency con- amounting to 86 thousand. ments started up again, which is already tinue in a similar way, these processes could What is defi nitely noteworthy, however, indicated by scattered signs. Th e recovery of have a signifi cant positive eff ect, with regard and will be an interesting and specifi cally the new housing market is of course not pri- to both transactions and prices. important index in the future, are those marily desirable from the standpoint of serv- Th e encouraging signs are also confi rmed new housing construction and sales fi gures ing the interests and profi ts of the develop- by the estimates of the numbers of monthly which reached rock bottom last year. It is ers, but it is a kind of mirror of the trends in transactions constantly updated by Duna indisputable, that those looking for quality the solvency and the long-term confi dence House, which since the beginning of the property, who represent the most important of the population, as well as the stability of year have measured a 10-20% growth on a buyers on the present market, can choose the country.
Monthly estimates of the number of residential transactions Number of home sales and homes built for sale 10,000 Of which Home sales as Year Second hand Homes built 9,000 a whole New home homes for sale
8,000 2009 91,100 82,900 8,300 16,900
7,000 2010 90,300 85,500 4,800 10,700
6,000 2011 87,700 83,900 3,900 4,800 5,000 2012 86,000 83,300 2,600 3,500
4,000
2013 88,700 86,400 2,300 3,200 July 2014 July 2013 Jan. 2014 Oct. 2013 Dec. 2013 June 2014 May 2014 April 2014 Nov. 2013 Febr. 2014 Aug. 2013 Aug. 2014 Sept. 2013 March 2014
SOURCE: DUNA HOUSE BAROMETER, RESOURCE SOURCE: KSH, RESOURCE
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28-42-CEE-pt2-REs-1409.indd 35 9/11/14 7:03 PM REsource Prices hit a record low on the Hungarian housing market Due to the continuous falling of prices, Hungary now has one of the least expensive housing markets in the European Union. The low price levels favor buyers, and the decreasing interest rates on mortgage loans and increasing government support are now coupled with a modest new housing supply. The FHB House Price Index SPONSORED ARTICLE ANALYSIS provides a deeper understanding of Hungarian housing market processes, providing an accurate picture of the current price levels and predicting future trends.
How did Hungary become tain its level of demand for a few years, with the (less than € 1,000/square meter) as well as a very the cheapest? volume of loans granted on par with the previous modest number of newly built homes. Hungarian period. After the subsidies were withdrawn, foreign prices are considered low even for the CEE region. FHB’s House Price Index covers residential market currency loans, at that point featuring lower inter- Recently, however, several factors that infl u- events over the past 15 years. With this informa- est rates, became much more popular – and thus ence the housing market have begun evolving in a tion, we can divide the decade behind us into four began the population’s foreign currency indebted- positive direction in Hungary. For one, the govern- distinct eras. The fi rst period, from 1998 to the end ness. This long upward trend was about to change ment is supporting home purchases more actively of 2000, represents a radical increase in both nom- at the end of 2007 when, suddenly, several impor- through various measures. Meanwhile, it seems
Annual change of the FHB Index in nominal terms (%) FHB Index from Q1 2000 to Q1 2014 (2000 = 100)
50 250 156.9 45 200.7 40 200 35 154.9 30 150 25 20 100 15 80.2 10 5 50 45.6 0 FHB Index nominal FHB Index real -5 0 -10
-15 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1
Source: FHB Source: FHB
inal and real prices. Over the period of three years, tant residential market indicators began to point in that the Hungarian economy is slowly beginning the value of homes increased by 132 percent and the same direction: supply was saturated, demand to recover. Though not spectacularly, the economy their value adjusted for infl ation almost doubled. decreased, the available income (that had at fi rst has at least started to grow. Thirdly, interest rates Favorable changes in the economy were respon- leveled off ) started decreasing, and there were an have been steadily decreasing over the past year. sible for this trend. The upward trend in residential increasing number of reports from abroad declar- The Hungarian National Bank (MNB) has lowered its prices continued between the beginning of 2001 ing the end of the real estate boom. rate to a record low (2.1 percent on the 23rd July and the end of 2003. Yet, compared to the above, In the FHB Home Price Index’s historic timeline, 2014). In addition to all these positive factors, the it was much more sedate, with an average 11 per- the peak value is located in the fi rst quarter of 2008, Hungarian housing market has accumulated a con- cent increase in value, when adjusted for infl ation. where the gradual decline in home prices begins. siderable amount of postponed demand, since the Demand increased since discounted fi nancing faced Compared to the then-highest residential price number of sales transactions has been quite low a revitalized supply, as new home construction also levels, national averages were 6.3 percent lower in over the last six years. started increasing from 2001 onwards. The system of 2009. The gradual decline in residential prices took The so-called First Home Buyers segment – subsidies became untenable for the budget by 2003 place alongside a decrease in turnover, which was analyzed separately by FHB – will profi t from this. and the fi rst stringency measures took place at this more visible in decreasing turnover for used homes Thanks to increasing income and more generous point, likewise aff ecting the price of homes. than in a decline in the number of newly built ones. state subsidies this segment has more favorable The reigning in of the subsidy system had an entry opportunities, and the Hungarian housing eff ect on the residential market with home val- Price level among the lowest market has become more aff ordable. ues’ steep upward trend fi nally breaking course in in the European Union 2003. In the following years only a 4 percent rate of Since 2008, the trend has been clear: nominal hous- To whom is the House Price increase was seen as at that point the price increase ing prices in Hungary continue to decline, thus, we Index useful? was just keeping pace with the rate of infl ation. have been experiencing a downward trend for the The FHB House Price Index and its associated real Despite tightening control over the system of sub- last six years. Thanks to this, Hungary now has one estate professional services are useful to all eco- sidies, competition in lending was able to main- of the lowest average prices in the European Union nomic entities that are in any way related to the
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Change of the house price index on the strongest Price changes in certain counties of Hungary submarkets and the FHB House Price Index (2008=100) 10% Győr-Moson-Sopron 105 5% SPONSORED ARTICLE 100 0% ANALYSIS 0 20 40 60 80 100 120 140 160 180 200 Bács-Kiskun 95 -5% Tolna Hajdú-Bihar 90 -10% Zala Vas Csongrád Budapest Somogy Pest SzSz-Bereg -15% Veszprém 85 Price changes (2010-2013, %) Nógrád Békés FHB House Price Index M4 area Fejér -20% Baranya 80 Towns close to motorways Western Hungary Heves Jász-Nagykun-Szolnok Komárom-Esztergom Balaton Budapest Downtown -25% 75
Borsod-Abaúj-Zemplén
-30% Average price/sqm in certain counties of Hungary (’000) 2008q1 2008q2 2008q3 2008q4 2009q1 2009q2 2009q3 2009q4 2010q1 2010q2 2010q3 2010q4 2011q1 2011q2 2011q3 2011q4 2012q1 2012q2 2012q3 2012q4 2013q1 2013q2 2013q3 2013q4 2014q1 Source: FHB, REsource Source: FHB, REsource
housing market. An adequate understanding of the with positive (Győr-Moson-Sopron) and negative published quarterly, FHB off ers its clients access to market is essential to making sensible, solid deci- (Borsod-Abaúj-Zemplén) extremes in the counties. updates on a range of detailed indicators. These sions. This applies to every developer, fi nancial insti- In the same way that various submarkets indicators allow us to give detailed breakdowns tution, agency, or fund management fi rm dealing in reacted diff erently to the crisis (weaker markets in terms of region and property type. This means real estate. suff ered more), change is also going to happen in our subscribers receive tailor-made analyses of the For example, if a developer plans to launch a diff erent ways. The strongest submarkets will be evolution and/or the current situation of a specifi c housing project on a given site, it is crucial they the fi rst to improve, so fi rstly positive changes are housing market segment, according to their busi- have an understanding of the immediate and wider expected in the highly developed areas of Western ness and strategic needs or their interests. implications relating to the development area’s Hungary, in the inner districts of downtown Buda- environment and that they be able to identify the pest, and in the cities that can be reached within FHB also produces forecasts trends associated with the planned development two hours from Budapest by motorway (Győr, Kec- FHB has launched another unique service, beside type. In fact, this information is not only essential skemét, Székesfehérvár, Szeged and Szekszárd). the House Price Index: the FHB House Price Forecast. for the developer, but also for the bank that is fund- The outlook is also more optimistic regarding real It includes a one year forecast and is updated every ing the project, since an essential understanding estate in Budapest with connections to the Kelen- six months. The method used in forecasting is based of the market plays an important role in the fi nal föld railway station and metro 4, and in cites near on three pillars. First, based on Hungarian and inter- decision to fi nance it. Last but not least, this holds Balaton. At the same time the Index also shows that national experience a certain correlation was iden- true for the real estate agencies as well: a realistic the value of fl ats and houses in the eastern counties tifi ed between selected macroeconomic indicators, pricing strategy is key to the success of a new res- decreased further, and that they are increasingly fi nancial and credit market indicators and the sales idential project. Without an intricate knowledge threatened by forced sales. Another important fac- volume and prices of housing. Second, FHB also uses of the market, this is impossible. While the nation- tor is the proportion of force-sold real estate in each verifi ed local assessments for its forecasts. wide statistics regarding the current situation in submarket, because this fi gure is a good indicator In addition, other empirical facts, obtained from the housing market are not very positive, there is of the tenacity of a certain market. the analyses of other real estate crises cannot be already a sense of movement, and in fact there are The current situation refl ects a sensitive stage in ignored either. Thus the experience gained from submarkets where change is imminent. The geo- the real estate market cycle, where detailed break- similar international crises and related observa- graphical breakdown of data from the FHB House downs of comprehensive and accurate data, as well tions are also built into the model. FHB’s projec- Price Index also highlights that there are signifi cant as high-quality real estate consulting services are tion model not only provides information about diff erences between the various submarkets. Aver- vitally important. the future development of housing prices, but also age national trends do not apply consistently in all FHB off ers much more than a basic nation-wide takes into consideration the dynamics of the prices regions. The national market is clearly polarized, housing price index. Alongside the indexes that are given the modifying eff ect of the crisis.
FHB INDEX ZSOLT MOLNÁR DR. GYULA NAGY URL: www.fhbindex.hu Vice-managing Director FHB Mortgage Bank Nyrt. E-mail: [email protected] FHB Real Estate Zrt. FHB Index Project Manager Address: 1082 Budapest, Phone: +36 (1) 452-9208 Phone: +36 (1) 452-5930 Üllői út 48. Mobile: +36 (30) 748-3913 Mobile: +36 (30) 964-6087 E-mail: [email protected] E-mail: [email protected]
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36-37-FHB-PR-REs-1409.indd 36 9/11/14 5:51 PM 36-37-FHB-PR-REs-1409.indd28-42-CEE-pt2-REs-1409.indd 37 9/11/14 5:517:03 PM REsource City developments in CEE Capital cities in the region have all evolved tremendously since the end of the socialist era. City centers acquired a completely new look and became more pedestrian-friendly, while infrastructure received much
ANALYSIS needed investment. Although the crisis called a halt to commercial real estate development in many cases, Warsaw, Prague, Budapest, Bratislava and Bucharest are still expanding both towards the sky and below ground thanks to infrastructural and cultural projects mostly fi nanced by EU funds. As we take a look at some of the most important city development projects in CEE capitals it is apparent that these cities are on the right path to becoming modern, fully European metropolises.
ÁKOS BUDAI
mong Central European capi- a public square, allowing pedestrians to one element of the city’s ambitious trans- A tal cities Warsaw has seen the view performances. Some backstage areas portation plan, as the line will be further biggest transformation over the of the theatre will have glass walls to show extended to the airport, and the construc- last decades, and based on its skyline it is outsiders what is happening in the building. tion of a fourth line is expected to begin the most modern city in the region. War- Poland’s largest cultural project is sched- next year. saw already has more skyscrapers than Ber- uled to be completed by 2019 and is esti- lin and the city’s downtown area always mated to cost EUR 95 million. Vast infrastructure appears to be under construction. Despite Warsaw is not the only regional capital developments in Budapest the economic hardships Poland had to face with a major cultural construction proj- Th is year, the Hungarian capital saw the last year, growth in the city never stopped. ect under way. Th e historical building of completion of its most important, scandal- Sometimes, however, the city’s expansion the National Museum in Prague has been ous and costly infrastructural development was perhaps too ambitious, and resulted undergoing reconstruction since 2011. Th e project in decades. Metro line M4 was inau- in controversy. For example, the construc- exhibition space in the renovated and the gurated on March 28. Construction on the tion of a new offi ce building (a EUR 30 extended building will be nearly doubled. 7.4 km line featuring 10 new stations started million project) had to be cancelled a few Th e new museum is expected to open in in 2006 and was scheduled to be fi nished by months ago because UNESCO pointed out June 2015. end-2009. Th e total cost of the rstfi phase that the new building could damage the Th ere is a further similarity between of Budapest’s new metro line was EUR 1.44 historic nature of the area. Nevertheless, Warsaw and Prague’s city development billion (HUF 452.5 billion). Two extensions 338,000 square metres of new offi ce space plans. Th e Czech capital is also extending (one on each end of the line) have been will be built in 2014 in Warsaw, more than its underground network; the new west- planned, but they are currently not funded the same value for Prague, Bratislava and ern section of Line A is scheduled to open by the Budapest city government or the Bucharest combined. this year. Th e EUR 675 million project is just European Union. Poland co-hosted the UEFA Euro 2012 which required the completion of the National Stadium, and triggered construc- tion works on a new metro line. Warsaw’s second underground line was expected to be fi nished before the 2012 event, but has been delayed to the end of 2014. After its opening, Line II will provide a new link between the two banks of the Vistula River and also give the city renewed public squares. Currently, one of the Polish capital’s big- gest projects is the construction of the Museum of Modern Art’s new building. Th e 25,000-square-metre complex will also house a theatre with a stage opening onto NEW METRO LINE, BUDAPEST
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Currently, the most anticipated infra- rebuilding of the so-called Old Bridge. A huge confer- structural project in Budapest is the Th e current project aiming to improve and reconstruction of the Buda side’s most redirect Bratislava’s city transport involves neglected public square, Széll Kálmán extending the tram line from the city cen- ence centre tér. Work is scheduled to start this year ter across the Danube, via a newly built ANALYSIS and is expected to be fi nished next year bridge, to the city’s most densely pop- to be born in along with the expansion of the tram net- ulated Petržalka borough which is cur- work in the area. Another tram line is also rently only served by buses. Further plans Budapest being extended on the Buda side provid- also include the reconstruction of several Within four years, a new congress ing a new link between the two sides of streets and squares in the city center, and center suitable for accommodat- the Danube. Major reconstruction works building a cycling path. Th e total cost of ing 4000-5000 may be built in Buda- on several other tram lines are also under the project is expected to be around EUR pest. Preparations for the project way. 59 million, with 85 percent of the sum were begun this year, which accord- Budapest also has several cultural con- coming from EU funds, on the condition ing to information from REsource will struction projects planned. Th e complete that the project is fi nished by the end of be revealed soon. According to the reconstruction of the Buda Castle might 2015. developers’ expectations, after the start this year and it is projected to go on Bucharest has recently seen skyscrap- project is completed Budapest could for ten years. Phase ‘zero’ of the project, ers rising up from the ground, although become one of the fi ve most popular the renovation and extension of Várkert Romanian architects generally avoid conference venues in the world, and Bazár was fi nished on August 28. Th e gov- designing tall buildings due to the city’s one of the top three in Europe. ernment is also planning to create a new vulnerability to earthquakes. Th ere is an museum district in the City Park, where increasing need for shopping opportuni- construction hasn’t started yet, but the ties in the Romanian capital, so construc- According to data from the fl ash report opening date has already been set for 2018, tion work started in July on a new shop- recently issued by the Central Statisti- the next election year. ping mall called Victoria City Center. Th e cal Offi ce (KSH), in the fi rst six months mall, which is developed by a Canadian of the current year the number of Skyscrapers on the rise? real estate investor on the former indus- hotel guest nights in Hungary grew by Th e construction of two triangular towers trial platform Textila Dacia, should be almost 6 percent to above 7.8 million. called Panorama City next to the Danube opened in October 2015. Apart from March, the sector showed in the center of Bratislava began last year. Furthermore, the city’s metro network an increase in practically every month Th e 108-metre-high buildings will house has been expanding rapidly in the past few during this period. Furthermore, the more than 600 new apartments. Th ey will years. Currently, a new section of line M5, upward market trend has also left its be the tallest residential buildings in Slo- measuring 1.6 km with two new stations is mark on revenues. Th e hotels’ gross vakia and almost 6,500 tons of iron and under construction. Also, the fi rst part of accommodation fee income of more 45,000 cubic meters of concrete will be new metro line M5 is expected to be com- than 129.8 billion HUF turned out to used for their construction. pleted by 2016 and the 7.2-km-long sec- be almost 10 percent higher than in Currently the most important infra- tion will feature 10 stations. Th e expected the same period of the previous year. In structural project in Bratislava is the total construction cost of Bucharest’s line the meantime the number of available rooms also showed a slight increase in the fi rst half of this year, which clearly indicates a cautious growth of investor confi dence. According to statistics, in the fi rst six months of the current year 1335 more rooms were registered than in the fi rst half of last year, which corre- sponds to a rise of almost half a percent. If we examine guest arrivals in com- mercial accommodation in the fi rst half of this year by tourist region, it turns out that Budapest continues to play its lead- ing role. So much so that the number of PRAGUE guest nights in the capital in the fi rst
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but a governmental resolution of last year fi ve most popular conference venues in the Project of special signifi cance has brought the development into a rea- world, and one of the top three in Europe. A governmental resolution from the end of sonable timeframe. Th e Hungarian tour- In his opinion, all the conditions are met November 2013 provides for preparations ist trade has long lacked a facility able to for this to be achieved: the capital of Hun- for the conference center: it calls upon accommodate even fi ve thousand people. gary is easily accessible from all parts of the the national development minister, by For lack of this, truly signifi cant world con- world, it has a pleasant climate, there is a ANALYSIS means of the Hungarian National Holding ferences cannot come to Budapest. In Feb- good price-value ratio relative to the stan- LLC, to make an immediate proposal for ruary this year, in his speech for the open- dard of services. Among the existing condi- the property deemed most suitable for ing of the spring session of parliament, tions he also lists that suffi cient hotel rooms implementation of the project, and to Prime Minister Viktor Orbán even desig- are available in all categories, and further- take the necessary measures in order to nated a location for the project. Accord- more, public safety in Budapest is top-rank- guarantee state building authorisation. ingly, the facility will be built in the Millen- ing in Europe, and it has a good image. The head of portfolio must work out a nium City Center. As previously stated by Balázs Fürjes, he detailed legal and fi nancial scheme for Balázs Fürjes, the government commis- deems that the congress center to be built implementation with the assistance of the sioner responsible for special Budapest will be an investment which will operate to government commissioner responsible for projects, has previously stated that as yet full capacity, be profi table for the national individual projects of special signifi cance no modern conference center for at least 4 economy and pay for itself within 10 years, in Budapest, which will guarantee that the thousand people and satisfying 21st century and which will create new jobs during both project (within the scope of the proper form requirements has been built in Budapest. construction and operation. It will bring of public procurement) is implemented as a Th e work must therefore be started with a additional revenue for Budapest hotels, state investment, and that the constructed knowledge of international experience. Th e tourism, and for SMEs active in event or edifi ce will come into state ownership. government commissioner also considers it travel organisation – he added. And all this important that the center be designed by a will result is constantly increasing income Hungarian designer, and built by Hungarian from tax and contributions, as well as fall- half of the current year, alongside a growth companies. According to his briefi ng, one ing expenditure for the budget. Th e expan- index of an ample 3 percent, exceeded 3.6 of the fi rst steps is to choose a consultant sion of conference tourism will at the same million. Furthermore, the greatest growth in an open public procurement competi- time increase the number of visitors in lei- here is thanks to the increased number tion, who will examine international exam- sure time tourism, as a traveller to a confer- of foreign tourists. Whilst the number of ples in order to help fi nd the best concept ence for business purposes may later return nights spent by foreign guests in Budapest to be realised in Budapest. Th e designer to the city to relax for a longer period. Th e rose from 3066 to 3174, the rise of domes- will also be selected in an open competi- government commissioner observed: the tic tourist guest nights from 417 to 427 tion – he added. Th e cost of the project will development of conference tourism is an scarcely added proportionally to the statis- be determined in knowledge of the designs, investment which will pay for itself, as the tics this year. and fi nancing will be arranged for following highest per capita spending is measured in In spite of the constantly improving sta- this – said the government commissioner. the business segment. tistical index, numerous important factors He noted: domestic and EU resources may According to Balázs Fürjes, this devel- are still needed for an explosion in tourism come into consideration. opment could be realised within 4 years. and by means of this the hotel development For that matter, it is no coincidence that According to REsource’s information, the market. According to experts, besides the Viktor Orbán mentioned the Millennium feasibility study needed for this, the proj- appearance of strong investors and positive City Center as the site for the conference ect budget and the designs will soon be fi nancing agencies, the greatest need is for center for four to fi ve thousand people in released. the development of tourism. Here we must his February speech. Th e Hungarian state think primarily of remedying the basic defi - had purchased the open space next to the ciencies as soon as possible. Th ese include Palace of Arts from TriGranit Development the development of air traffi c, appropriate Corporation at the beginning of 2014. Th e promotion of the country and Budapest, center will be built on this plot of almost 13 and the construction of a conference cen- thousand square metres, as already planned ter similar to that of Vienna. earlier. “Th e project will be implemented with A huge conference center the active participation of the tourism sec- will be built; but when? tor” – stated the government commis- For almost a decade now there has been sioner previously, who deems it a realis- talk of a new Budapest conference center, tic goal for Budapest to be among the fi rst MILLENIUM CITY CENTER
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Real estate developers in CEE
Type of real estate development Presence in the region
Company headquarters/ Current main projects Company headquarters Company name regional in the region and in Hungary contact – phone number, LIST headquarters – name, planned delivery year website, e-mail (city, country) ce offi retail logistics industrial, residential hotel Hungary Poland Czech Republic Slovakia Austria Other
P: +31 204 218 928 Amsterdam, Germany,Bulgaria, AFI Europe N.V. üüüü – AFI City (CZ), AFI Karlin Business Park (CZ) üüü –– afi -europe.eu The Netherlands Romania, Serbia info@afi -europe.eu
P: +36 1 382 5100 AIG/Lincoln Kft. Budapest, Hungary üüü – – The Quadrum Phase II, III (HU) – 2015, 2018 üüüü – Bulgaria, Romania, www.aiglincoln.hu [email protected]
P: +431 7120 742-0 Austrian Real Estate TrIIIple (AU) – 2018 Vienna, Austria ü ––ü – ––––ü – www.are-development.at Development Rosenhöfe (AU) – Q4 2015 offi [email protected]
P: +431 532 5907 CA Immo Vienna, Austria ü –––ü Avia (PL) – Q4 2014 üü – üü Romania, Serbia www.caimmo.com offi [email protected]
P: +48 22 318 8888 Capital Park S.A. Warsaw, Poland üü – ü – Royal Wilanow (PL) – Q3 2015 – ü ––– – www.capitalpark.pl [email protected]
P: + 36 1 802 7300 Duna Intermodal Logistics Centre (HU) – CBS Property Zrt. Budapest, Hungary ü – üü – ü –––– – www.cbsproperty.hu 2015-2020 [email protected]
Dózsa Offi ce Complex (HU) – Q4 2016 Belgium, France, P: +32 26 600 070 CODIC International S.A. Brussels, Belgium üü ––– Margit Corner (HU) – 2016 ü ––––Luxembourg, Spain, www.codic.eu V48 (HU) – Q1 2016 Romania
P: +36 1 225 0912 F: +36 1 375 0445 ConvergenCE Budapest, Hungary üüü –– N.A. üü – ü –– www.convergen-ce.com offi [email protected]
P: +352 264 767-1 www.cpipg.com Luxembourg, Quadrio (CZ) – 2014 Germany, France, [email protected] CPI Property Group üüüüü üüüü – Luxembourg Balance Building (HU) – 2015 Romania P: +36 1 225 6600 www.cpigroup.hu [email protected]
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Real estate developers in CEE
Type of real estate development Presence in the region
Company headquarters/ Current main projects Company headquarters Company name regional in the region and in Hungary contact – phone number, LIST headquarters – name, planned delivery year website, e-mail (city, country) ce offi retail logistics industrial, residential hotel Hungary Poland Czech Republic Slovakia Austria Other
Dock Phase II. (CZ) – Q2 2015 P: +420 226 202 800/801 Central Opava (CZ) Crestyl Management A.S. Prague, Czech Republic üü – ü – ––ü –– – www.crestyl.com Central Kladno (CZ) [email protected] Central Jablonec (CZ)
Denmark, Italy, P: +36 1 434 8208 ECE Projektmanagement Budapest, Hungary – ü – – – Aquincum Központ (HU) – 2017 üüüüüBulgaria, Romania, F: +36 1 434 8218 Budapest Kft. Greece, Turkey www.ece.com
Puro (AU) – Q2 2016 ECE Projektmanagement Germany, Spain, Italy, P: +49 40 60 60 60 Hamburg, Germany üüü – ü Arkady Hradec Kralove (CZ) – 2017 üüüüü G.m.b.H & Co. KG Switzerland www.ece.com Zielone Arkady, Bydgoszcz (PL) – Q3 2016
P: +36 30 429 2333, +48 41 33 33 333 Mundo Center (HU) – 2016/17 www.echo.com.pl Echo Investment S.A. Kielce, Poland üü – üü üü – – – Romania Q22 Tower (PL) – 2016 orsolya.stefankovits@ echo.com.pl offi [email protected]
P: +43 (0)5 0100 27000 Enterprise Offi ce Center (CZ), Erste Campus (AU), Bulgaria, Romania, F: +43 (0)5 0100 27204 Erste Group Immorent AG Vienna, Austria üüüüüImmopark Praha (CZ), Immopark Zilina (SLO), ü – üüü Serbia, Croatia, offi [email protected] Innovation Park Puchstrasse (AU), Silo (AU) Slovenia www. erstegroupimmorent.com
Budapest One (HU) – Q1 2017 P: +36 1 266 2181 Futureal Budapest, Hungary üü – ü – Vision Towers (HU) Q3-Q4 2014 üü ––– – www.futureal.hu Corvin Corner Q3-Q4 2014 [email protected]
P: +48 22 455 1600 Belgium, Russia, Ghelamco Poland Warsaw, Poland ü ––ü – N.A. – ü ––– www.ghelamco.com Ukraine [email protected]
Croatia, Serbia, P: +48 22 60 60 700 Globe Trade Centre S.A. Warsaw, Poland üü – ü – N.A. üüüü – Romania, Bulgaria www.gtc.com.pl
Goodman Üllő Airport Logistics Centre (HU), Goodman Krakow Airport Logistics Centre (PL), Goodman Group Warsaw, Poland – – ü ––Pomeranian Logistics Centre (PL), Goodman Mlada üüüüü – www.goodman.com Boleslav Logistics Centre (PL), Goodman Senec Logistics Centre (PL)
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Real estate developers in CEE
Type of real estate development Presence in the region
Company headquarters/ Current main projects Company headquarters Company name regional in the region and in Hungary contact – phone number, LIST headquarters – name, planned delivery year website, e-mail (city, country) ce offi retail logistics industrial, residential hotel Hungary Poland Czech Republic Slovakia Austria Other
Graphisoft Park www.graphisoftpark.com Budapest, Hungary ü –––– Graphisoft Park (HU) – 2020 ü –––– – Ingatlanfejlesztő Kft. [email protected]
Twin City North (SK) – 2019, Twin City South (SK) – 2016-2024, Metronom Business Center (CZ) – 2015, Postepu 14 (PL) – 2015, Gdanski Luxembourg, Business Center II (PL) – 2016, West Station I-II. www.hbreavis.com HB Reavis Real Estate üüü –– üüüü –– Luxembourg (PL) – 2016-2018,Aupark Shopping Center Trencin [email protected] (SK), Aupark Shopping Center Karvina (CZ), Aupark Shopping Center Hradec Kralove (CZ), Aupark Shopping Center Brno (CZ)
P: +48 22 335 77 77 South Park (PL) – Q1 2015, Copernicus Square Hochtief Development Warsaw, Poland ü –––– – ü ––– – www. (PL) – 2016 hochtief-development.pl
P: +36 1 473 1209 Horizon Development Budapest, Hungary ü –––– Promenade Gardens (HU) – 2016 ü –––– – www.horizondevelopment.hu [email protected]
P: + 43 1 88 090 Nimbus Offi ce (PL) Immofi nanz AG Vienna, Austria ü –––– üüüüüGermany, Romania www.immofi nanz.com Jungmannova 15 (CZ) mail@immofi nanz.com
Rustonka (CZ) P: +421 2 5941 8200 Panorama City (SK) J&T Real Estate Bratislava, Slovakia üüüüü ––üü –– www.jtre.sk Zuckermandel (SK) [email protected] Westend Gate (SK)
P: +36 1 476 6900 Russia, Belarus, KÉSZ Csoport Budapest, Hungary ü – ü – ü N.A. üü – üü www.kesz.hu Serbia, Ukraine [email protected]
P: +48 22 571 44 44 Liebrecht&wooD Warsaw, Poland üüü – – Hampton Park (PL) – ü – – – Romania, Russia www.liebrecht-wood.com
P: +48 22 546 98 00 Mayland Real Estate Warsaw, Poland – ü – – – Serenade (PL) – 2016 – ü ––– – www.mayland.pl
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Real estate developers in CEE
Type of real estate development Presence in the region
Company headquarters/ Current main projects Company headquarters Company name regional in the region and in Hungary contact – phone number, LIST headquarters – name, planned delivery year website, e-mail (city, country) ce offi retail logistics industrial, residential hotel Hungary Poland Czech Republic Slovakia Austria Other
P: +36 1 211 2060 Metrodom City Home (HU) – Q2 2015 Metrodom Kft. Budapest, Hungary – ü – ü – ü –––– – www.metrodom.hu Metrodom Szent László út 41-43. (HU) – Q4 2015 [email protected]
Belgium, Germany, P: +31 (0) 182 690 900 Forum Radunia (PL) – 2016 Multi Gouda, The Netherlands – ü ––– – üüü – Italy, Portugal, Spain, www.multi.eu Forum Poprad (SLO) – 2015 Ukraine, Turkey [email protected]
P: +36 1 373 3800 Pauler Ház (HU) – Q4 2014 OTP Ingatlan Zrt. Budapest, Hungary – – – ü – ü –––– – www.otpingatlan.hu Platán Lakókert (HU) – Q1 2015 [email protected]
Culenova (SLO) Penta Investments Bratislava, Slovakia üü – ü – Mokotow (PL) – Q1 2017 – üüü – – www.pentainvestments.com Waltrovka (CZ)
Kielce Plaza (PL) P: +31 20 344 9560 Amsterdam, The Plaza Centers Group üü ––– Leszno Plaza (PL) üüü – – Latvia www.plazacenters.com Netherlands Lodz (PL) [email protected]
P: +36 1 488 7476 CDO – Calasanz Downtown Offi ces (HU) Portus Buda Group Zrt. Budapest, Hungary üü – ü – ü –––– – www.portusbudagroup.com Inspired Garden Project (HU) offi [email protected]
P: +420 224 174 555 ArtGen Offi ce Gallery (CZ) – Q4 2014, LINE Germany, The PPF Real Estate Prague, Czech Republic üü – ü – ––ü –– www.ppfreal.com (CZ) – 2016 Netherlands [email protected]
P: 36 1 250 4288 Proform Zrt. Budapest, Hungary üü ––ü N.A. ü –––– – www.proform.hu
Warsaw, Poland Budapest, Hungary P: +48 22 218 36 00 Prologis Prague, Czech Republic ––ü – – Prologis Park-Sziget (HU) DC6 üüüüü Romania www.prologiscee.com Bratislava, Slovakia [email protected] Bucharest, Romania
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Real estate developers in CEE
Type of real estate development Presence in the region
Company headquarters/ Current main projects Company headquarters Company name regional in the region and in Hungary contact – phone number, headquarters – name, planned delivery year website, e-mail LIST (city, country) ce offi retail logistics industrial, residential hotel Hungary Poland Czech Republic Slovakia Austria Other
P: +36 1 346 6400, +43 171 7060 Raiff eisen Evolution Project Wien, Austria üü – üü Kerepesi Business Park (HU) – 2016 üüüüü – www.raiff eisenevolution.com Development GmbH offi ce@raiff eisenevolution. com
Prime Corporate Center (PL) – 2015 West Point 120 (PL) – 2016 P:+48 022 222 4000 Savills Poland Warsaw, Poland üü ––– Promenady ZITA (PL) Q4 2014 – ü ––– – www.savills.pl Sukcesja Shopping and Entertainment Center [email protected] (PL) – 2015
Belariepark II. (CZ), Rohan City (CZ), Hrebenky P: +420 234 005 551 (CZ),Smichov City (CZ), Zizkov City (CZ), Nové Sekyra Group Prague, Czech Republic ü ––ü – ––ü –– – www.sekyragroup.cz Tuhnice (CZ), Zamecky Dvur (CZ), Opatov Park II. [email protected] (CZ), Dejvice Center (CZ)
Garden Ville Kamaraerdő (HU) P: +36 1 437 8280 Shikun & Binui R.E.D. Budapest, Hungary üüüüü Garden Ville Tükörhegy (HU) üüü – ü Romania www.shikunbinui.hu Hungary Amsterdam, Holland Garden Ville Üröm (HU) offi [email protected]
P: 43 (0) 50 100-27521 Bulgaria, Romania, S IMMO AG Wien, Austria üü – üü N.A. ü – üüü www.simmoag.at Croatia offi [email protected]
P:+36 1 382 9100 Skanska Property Budapest, Hungary üü – – – Nordic Light Offi ces (HU) – 2016 üüü –– – www.skanska.hu Hungary Ltd. [email protected]
Business Garden phase II. (PL) P: +48 22 820 9151 Business Garden Poznan (PL) SwedeCenter Sp Warsaw, Poland ü ––üü – ü ––– – www.swedecenter.pl Business Garden Wroclaw phase I (PL) [email protected] Gdynia Waterfront I. (PL)
Bonarka 4 Business Center P: +36 1 374 5600 Building E (PL) – Q2 2015 TriGranit Fejlesztési Zrt. Budapest, Hungary üü – üü üü – ü – Russia, Croatia www.trigranit.com Bonarka 4 Business Center [email protected] Building F (PL) – Q1 2016
East Gate Business Park (HU) P: +36 1 451 4760 WING Zrt. Budapest, Hungary üüü – ü Dél-pesti Üzleti Park (HU) ü –––– – [email protected] V17 Offi ce building (HU) – Q3 2016 www.wing.hu
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Real estate developments in CEE
Total gross size Name of real estate Location of real estate Name of real estate Est. monthly Est. time of Real estate developer/Leasing agent(s) Country of the building development development developer rent (€/sqm) delivery (sqm) phone website, e-mail
LIST AFI City CZ Prague, Czech Republic AFI Europe 150,635 N.A. planned P: +420 255 743 111 afi -europe.eu
AFI Karlin Business Center CZ Karlin, Prague 8, Czech Republic AFI Europe 12,289 N.A. planned P: +420 255 743 111 afi -europe.eu
ECE Projektmanagement Aquincum Központ HU District III., Budapest, Hungary 140,000 N.A. 2017 P: +36 1 434 8208 www.ece.com Budapest Kft.
ECE Projektmanagement G.m.b.H Arkady Hradec Kralove CZ Hradec Kralove 39,000 N.A. 2017 P: +49 40 60 60 60 www.ece.com & Co. KG
www.ppfreal.com ArtGen Offi ce Gallery CZ Prague, Czech Republic PPF Real Estate 25,500 N.A. Q4 2014 P: +420 224 174 555 [email protected]
www.hbreavis.com Aupark Shopping Center Brno CZ Brno, Czech Republic HB Reavis Group 31,220 N.A. 2017 P: +420 225 001 900 [email protected]
Aupark Shopping Center Hradec www.hbreavis.com CZ Hradec Kralove, Czech Republic HB Reavis Group 25,900 N.A. 2016 P: +420 225 001 900 Kralove [email protected]
www.hbreavis.com Aupark Shopping Center Karvina CZ Karvina, Czech Republic HB Reavis Group 11,400 N.A. 2017 P: +420 225 001 900 [email protected]
www.hbreavis.com Aupark Shopping Center Trencin SLO Trencin, Slovakia HB Reavis Slovakia 10,100 N.A. 2017 P: +421 2 58 30 30 30 [email protected]
www.aviaoffi ces.pl Avia PL Jana Pawla II. 41, 31-864 Krakow, Poland CA Immo & GD&K Group 12,500 N.A Q4 2014 P: +48 78 400 55 44 [email protected]
www.cpigroup.hu Balance Building H 99. Váci Road, Budapest, 1139, Hungary CPI Property Group 15,952 9.9 2015 P: +36 1 225 6600 [email protected]
www.trigranit.com Buliding E: Q2 2015 Bonarka 4 Business (B4B) PL 9 Puszkarska, 30-644 Krakow, Poland TriGranit Fejlesztési Zrt. N.A. 14 P: +48 662 295 050 [email protected] Building F Q1 2016 www.bonarka4business.pl
www.futureal.hu Budapest One HU Őrmező, Budapest, Hungary Futureal 70,000 N.A. Q1 2017 P: +36 1 266 2181 [email protected]
www.swedecenter.pl Business Garden Poznan PL Poznan, Poland SwedeCenter Sp 80,000 N.A. under construction P: +48 22 820 9151 [email protected]
www.swedecenter.pl Business Garden Warsaw PL Warsaw, Poland SwedeCenter Sp 58,000 N.A. Phase II. planned P: +48 22 820 9151 [email protected]
www.swedecenter.pl Business Garden Wroclaw PL Wroclaw, Poland SwedeCenter Sp 100,000 N.A. Q4 2014 P: +48 22 820 9151 [email protected]
www.cdo.hu CDO – Calasanz Downtown Offi ce HU Váci Street, Budapest, Hungary Portus Buda Group Zrt. 21,000 N.A. N.A. P: +36 1 488 7476 [email protected]
www.crestyl.com Central Jablonec CZ Jablonec nad Nisou, Czech Republic Crestyl Management A.S. 16,500 N.A. in preparation P: +420 226 202 800/801 [email protected]
www.crestyl.com Central Kladno CZ Kladno, Czech Republic Crestyl Management A.S. 29,000 N.A. in preparation P: +420 226 202 800/801 [email protected]
www.crestyl.com Central Opava CZ Opava, Czech Republic Crestyl Management A.S. 18,000 N.A. in preparation P: +420 226 202 800/801 [email protected]
www. Copernicus Square PL Warsaw, Poland Hochtief Development Poland 42,199 N.A. 2016 P: +48 22 335 7777 hochtief-development.pl
Corso Court CZ Prague, Czech Republic Skanska Property Czech Republic 17,000 N.A. Q2 2015 P: +420 737 256 304 www.skanska.cz
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Real estate developments in CEE
Total gross size Name of real estate Location of real estate Name of real estate Est. monthly Est. time of Real estate developer/Leasing agent(s) Country of the building development development developer rent (€/sqm) delivery (sqm) phone website, e-mail
31–33. Futó Street, Budapest 1082, www.futureal.hu Corvin Corner HU Futureal 6,200 14 Q3-Q4 2014 P: +36 1 266 2181 LIST Hungary [email protected]
www.pentainvestments.com Culenova SLO Bratislava, Slovakia Penta Investments 150,000 N.A. in preparation P: +421 2 57788 111 bratislava@ pentainvestments.com
www.sekyragroup.cz Dejvice Center CZ Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: 420 234 005 551-2 [email protected]
36–38. Táblás Street, Budapest, 1097, www.wing.hu Dél-Pesti Üzleti Park HU WING Zrt. N.A. N.A. continuous P: +36 1 451 4760 Hungary [email protected]
www.crestyl.com Dock CZ Prague, Czech Republic Crestyl Management A.S. 120,000 N.A. Q2 2015 P: +420 226 202 800/801 [email protected]
144–148. Dózsa György Street, Budapest, www.codic.eu Dózsa Offi ce Complex HU CODIC Hungary Kft. 41,000 13.5-14 Q4 2016 P: +36 1 266 6000 1134, Hungary [email protected]
Duna Intermodális Logisztikai Érd/Budapest, District XII (Nagytétény), HU CBS Property Zrt. 150,000 N.A. 2015-2020 P: +36 1 802 7300 www.cbsproperty.hu Központ Hungary
www.wing.hu East Gate Business Park HU Akácos - Fót, 2151, Hungary WING Zrt. N.A. N.A. continuous P: +36 1 451 4760 [email protected]
www. P: +43 (0)5 0100 27000 Enterprise Offi ce Center CZ Prague 4 - Pankrac, Czech Republic Erste Group Immorent AG 29,069 N.A. in development erstegroupimmorent.com F: +43 (0)5 0100 27204 www.enterprise-prague.cz Total:117 000 www.erstegroupimmorent. P: +43 (0)5 0100 27000 Erste Campus AU Vienna, Austria Erste Group Immorent AG Offi ce:12 000 N.A. under construction com F: +43 (0)5 0100 27204 Retail:2 000 www.erstecampus.at www.multi.eu P: +31 (0) 182 690 900 Forum Poprad SLO Poprad, Slovakia Multi 45,775 N.A. 2015 [email protected] P: +420 737 252 783 [email protected] www.multi.eu P: +31 (0) 182 690 900 Forum Radunia PL Gdansk, Poland Multi 62,000 N.A. 2016 [email protected] P: +48 697 901 200 [email protected]
www.hbreavis.com Gdanski Business Center II PL Warsaw, Poland HB Reavis Poland 46,000 N.A. 2016 P: +48 22 203 44 20 [email protected]
www.swedecenter.pl Gdynia Waterfront II. PL Gdynia, Poland SwedeCenter Sp 65,000 N.A. Q3 2015 P +48 22 820 9151 [email protected]
www.goodman.com/pl Goodman Gliwice Logistics Centre PL ul. Eiff el’a, Gliwice, Poland Goodman 50,837 N.A. N.A. N.A. [email protected]
www.goodman.com/hu Goodman Gyál Logistics Centre HU M5-M0 Intersection, Gyál, Hungary Goodman 21,000 N.A. N.A. N.A. [email protected]
Goodman Krakow Airport www.goodman.com/pl PL ul. Komandosow 1, Modlniczka, Poland Goodman 132,252 N.A. N.A. N.A. Logistics Centre [email protected]
www.goodman.com/pl Goodman Lodz Logistics Centre PL ul. Lutomierska, Pabinice, Poland Goodman 26,902 N.A. N.A. N.A. [email protected]
Goodman Mlada Boleslav www.goodman.com/cz CZ Plazy - Mlada Boleslav Goodman 57,800 N.A. N.A. N.A. Logistics Centre [email protected]
Goodman Poznan Airport www.goodman.com/pl PL ul. Batorowska, Wysogotowo, Poland Goodman 52,310 N.A. N.A. N.A. Logistics Centre [email protected]
www.goodman.com/pl Goodman Poznan Logistics Centre PL Niepruszewo, BUK, Poland Goodman 50,378 N.A. N.A. N.A. [email protected]
www.goodman.com/sk Goodman Senec Logistics Centre SK Dialnicna cesta 18, Senec, Slovakia Goodman 180,000 N.A. N.A. N.A. [email protected]
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Real estate developments in CEE
Total gross size Name of real estate Location of real estate Name of real estate Est. monthly Est. time of Real estate developer/Leasing agent(s) Country of the building development development developer rent (€/sqm) delivery (sqm) phone website, e-mail
Goodman Sosnowiec Logistics www.goodman.com/pl LIST PL ul. Inwestycyjna, Maczki Bór, Poland Goodman 66,975 N.A. N.A. N.A. Centre [email protected]
www.goodman.com/pl Goodman Torun Logistics Centre PL Lysomice k/Torun, Poland Goodman 82,815 N.A. N.A. N.A. [email protected]
Goodman Üllő Airport Logistics www.goodman.com/hu HU 8. Zsaróka Road, Üllő, Hungary Goodman 155,000 N.A. N.A. N.A. Centre [email protected]
www.goodman.com/pl Goodman Warsaw Logistics Centre PL Emilianow, Warsawa, Poland Goodman 54,697 N.A. N.A. N.A. [email protected]
Goodman Wroclaw East Logistics www.goodman.com/pl PL ul. Kielczowska, Wroclaw, Poland Goodman 51,768 N.A. N.A. N.A. Centre [email protected]
Goodman Wroclaw South ul. Logistyczna 6,55-040 Bielany www.goodman.com/pl PL Goodman 123,500 N.A. N.A. N.A. Logistics Centre Wrocławskie, Poland [email protected]
Graphisoft Park Ingatlanfejlesztő 1998-2020 www.graphisoftpark.com Graphisoft Park HU 7 Záhony Street, Budapest, 1031, Hungary 116,000 15.5 P: +36 20 661 2401 Kft. continuously [email protected]
Hampton Park PL Warsaw, Poland Liebrecht&wooD 50,000 N.A. N.A. P: +48 22 571 44 44 www.liebrecht-wood.com
www.sekyragroup.cz Hrebenky CZ Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: +420 234 005 551-2 [email protected]
www. phase I. unders P: +43 (0)5 0100 27000 Immopark Kosice SLO Kosice, Slovakia Erste Group Immorent AG 25,000 N.A. erstegroupimmorent.com construction F: +43 (0)5 0100 27204 www.immopark.com www. P: +43 (0)5 0100 27000 Immopark Praha CZ Prague, Czech Republic Erste Group Immorent AG 131,000 N.A. under construction erstegroupimmorent.com F: +43 (0)5 0100 27204 www.immopark.com www.erstegroupimmorent. P: +43 (0)5 0100 27000 Immopark Zilina SLO Zilina, Slovakia Erste Group Immorent AG 150,000 N.A. under construction com F: +43 (0)5 0100 27204 www.immopark.com
P: +43 (0)5 0100 27000 Innovation Park Puchstrasse AU Graz, Austria Erste Group Immorent AG 175,000 N.A. in development www.erstegroupimmorent.at F: +43 (0)5 0100 27204
www.portusbudagroup.com Inspired Garden Project HU Svábhegy, Budapest, Hungary Portus Buda Group Zrt. 9,000 N.A. N.A. P: +36 1 488 7476 offi [email protected]
www.immofi nanz.com Jungmannova 15 CZ Prague, Czech Republic Immofi nanz Group 7,700 N.A. in development P: +43 1 88 090 mail@immofi nanz.com
www.plazacenters.com Kielce Plaza PL Kielce, Poland Plaza Centers Group 33,000 N.A. planning stage P: +48 22 231 9900 headoffi [email protected]
www.raiff eisenevolution.com Raiff eisen Evolution Project P: +36 1 346 6400 Kerepesi Business Park HU Budapest, Hungary 65,000 11 2016 offi ce@raiff eisenevolution. Development Kft. +43 171 7060 com
www.plazacenters.com Leszno Plaza PL Leszno, Poland Plaza Centers Group 16,000 N.A. planning stage P: +48 22 231 9900 headoffi [email protected]
www.ppfreal.com LINE CZ Prague, Czech Republic PPF Real Estate 18,000 N.A. 2016 P: +420 224 174 555 [email protected]
www.plazacenters.com Lodz Plaza PL Lodz, Poland Plaza Centers Group 35,000 N.A. 2017 P: +48 22 231 9900 headoffi [email protected]
www.codic.eu 19-21. Margit krt., Budapest, 1024, Margit Corner HU CODIC Hungary Kft. 5,100 13.5-14 Q1 2016 P: +36 1 266 6000 [email protected] Hungary www.margitcorner.hu
10 Nádasdy Street, District IX., Budapest, Metrodom City Home HU Metrodom Kft. 5,454 N.A. Q2 2015 N.A. www.metrodom.hu 1192, Hungary
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Real estate developments in CEE
Total gross size Name of real estate Location of real estate Name of real estate Est. monthly Est. time of Real estate developer/Leasing agent(s) Country of the building development development developer rent (€/sqm) delivery (sqm) phone website, e-mail
Metrodom - Szent László út 41-43. Szent László Street, District XIII., HU Metrodom Kft. 3,291 N.A. Q4 2015 N.A. www.metrodom.hu LIST 41-43. Budapest, Hungary
Prague 5 - Nové Butovice, Bucharova www.hbreavis.com Metronom Business Center CZ HB Reavis Group 33,595 N.A. 2015 P: 420 225 001 900 Street, Czech Republic [email protected]
www.pentainvestments.com Mokotow PL Warsaw, Poland Penta Investments 24,500 N.A. Q1 2017 P: +48 22 502 32 22 warsaw@ pentainvestments.com www.echo.com.pl Csömöri Street/Bosnyák Street, District XIV., Echo Investment S.A./Echo Mundo Center HU 37,000 N.A. 2016-2017 P: +36 30 429 2333 orsolya.stefankovits@echo. Zugló, Budapest, Hungary Investment Hungary Kft. com.pl
www.offi ce.immofi nanz.com Nimbus Offi ce PL Warsaw, Poland Immofi nanz AG 19,000 N.A. in development P: +43 1 88 090 mail@immofi nanz.com
www.skanska.hu Nordic Light Offi ces HU 96-98. Váci Road, Budapest, 1133, Hungary Skanska Property Hungary Ltd. 26,200 12.95-.13.5 2016 P: +36 1 382 9100 [email protected]
www.sekyragroup.cz Nove Tuhnice CZ Karlovy Vary, Czech Republic Sekyra Group N.A. N.A. in preparation P: +420 234 005 551-2 [email protected]
www.sekyragroup.cz Opatov Park II. CZ Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: +420 234 005 551-2 [email protected]
www.jtre.sk Panorama City SLO Bratislava, Slovakia J&T Real Estate 94,000 N.A. under construction P: +421 2 5941 8200 [email protected]
15. Pauler Street, District I., Budapest, www.paulerhaz.hu Pauler Ház HU OTP Ingatlan Zrt. 3,577 N.A. Q4 2014 P: +36 70 457 2784 Hungary [email protected]
www. Platán Lakókert HU 98. Hunyadi Street, Balatonboglár, Hungary OTP Ingatlan Zrt. 4,929 N.A. Q1 2015 P: +36 70 953 9255 eladonyaralobalatonboglar.hu [email protected]
www.goodman.com/pl Pomeranian Logistics Centre PL ul. Kontenerow 21, Gdansk Goodman 515,761 N.A. N.A. N.A. [email protected]
www.hbreavis.com Postepu 14 PL Warsaw, Poland HB Reavis Poland 34,445 N.A. 2015 P: +48 22 203 44 20 [email protected]
www.golubgethouse.pl Prime Corporate Center PL 78 Grzybowska Street, Warsaw, Poland Golub GetHouse 20,148 N.A. 2015 P: +48 22 695 01 10 [email protected]
www.horizondevelopment.hu Promenade Gardens HU 80-84. Váci Road, Budapest, 1133, Hungary Horizon Development 25,000 13.5-14.5 2016 P: +36 1 473 1209 [email protected]
Antoniego Slonimskiego Street, Wroclaw, www.savills.pl Promenady ZITA PL Savills Poland 21,120 N.A. Q4 2014 P: + 48 022 222 4000 Poland [email protected]
ECE Projektmanagement G.m.b.H Puro AU Vienna, Austria 10,000 N.A. Q2 2016 P: +49 40 60 60 60 www.ece.com & Co. KG
www.echo.compl Q22 Tower PL Warsaw, Poland Echo Investment S.A. 55,000 N.A. 2016 P: +48 41 33 33 333 offi [email protected]
Purkynova Street, Prague 1, 110 00 offi ce: 21-23 www.cpipg.com Quadrio CZ CPI Property Group 45,000 Q4 2014 P: +420 281 082 110 Czech Republic retail: 90-120 [email protected]
www.sekyragroup.cz Rohan City CZ Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: +420 234 005 551-2 [email protected]
www.are-development.at Rosenhöfe AU Vienna, Austria Austrian Real Estate Development N.A. N.A. Q4 2015 P: +431 7120 742-0 offi [email protected]
www.capitalpark.pl Royal Wilanow PL Wilanow, Poland Capital Park 36 700 N.A. Q3 2015 P: 48 22 318 8888 [email protected]
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Real estate developments in CEE
Total gross size Name of real estate Location of real estate Name of real estate Est. monthly Est. time of Real estate developer/Leasing agent(s) Country of the building development development developer rent (€/sqm) delivery (sqm) phone website, e-mail
www.jtre.cz
LIST Rustonka CZ Prague, Czech Republic J&T Real Estate 40 400 N.A. planned P: +420 221 710 111 [email protected]
www.mayland.pl Serenada Shopping Center PL Cracow, Poland Mayland Real Estate 42 000 N.A. 2016 P: +48 22 546 98 00 www.ch-serenada.pl
Phase II: Q3-Q4 Silesia Business Park PL Katowice, Poland Skanska Property Poland N.A. N.A. P: +48 22 653 84 00 www.skanska.pl 2015
www. P: +43 (0)5 0100 27000 Silo AU Vienna, Austria Erste Group Immorent AG 12,000 N.A. under construction erstegroupimmorent.com F: +43 (0)5 0100 27204 www.silo-offi ces.at
www. South Park PL Warsaw, Poland Hochtief Development Poland 86,586 N.A. Q1 2015 P: +48 22 335 77 77 hochtief-development.pl
www.sekyragroup.cz Smichov City CZ Prague, Czech Republic Sekyra Group 210,000 N.A. in preparation P: 420 234 005 551-2 [email protected]
www.robertson.hu Spectrum Offi ce Corner HU 180. Üllői Road, Budapest, 1191, Hungary RZT Kft. 8,775 11-12 built-to-suit P: +36 1 327 20 50 offi [email protected]
Sukcesja Shopping and www.savills.pl PL Lodz, Poland Savills Poland 46,000 N.A. 2015 P: +48 022 222 4000 Entertainment Center [email protected]
Phase II: 2015 www.aiglincoln.com The Quadrum HU Vecsés, Hungary AIG/Lincoln Kft. N.A. N.A. P: +36 1 382 5100 Phase III: 2018 [email protected]
www.are-development.at Austrian Real Estate TrIIIple AU Vienna, Austria 110 000 N.A. 2018 P: +431 7120 742 7725 offi [email protected] Development/Soravia Group www.triiiple.at
www.hbreavis.com Twin City North SLO Bratislava, Slovakia HB Reavis Slovakia 28 700 N.A. 2019 P: +421 2 58 30 30 30 [email protected]
www.hbreavis.com Twin City South SLO Bratislava, Slovakia HB Reavis Slovakia 194 700 N.A. 2016-2024 P: +421 2 58 30 30 30 [email protected]
www.eston.hu, [email protected] P: 36 70 334 3555 V17 HU 17 Váci Road, Budapest, 1134, Hungary WING Zrt. 12 350 N.A. Q3 2016 www.jll.com +36 70 333 8282 [email protected] www.codic.eu 48/e-f. Váci Road, Budapest, 1132, V48 HU CODIC Hungary Kft. 13,500 13-14 Q1 2016 P: +36 1 266 6000 [email protected] Hungary www.v48.hu
Váci Street - Dózsa György Street, District www.futureal.hu Vision Towers HU Futureal 20,300 14.5 Q3-Q4 2014 P: +36 1 266 2181 XIII., Budapest 1134 , Hungary [email protected]
www.pentainvestments.com Waltrovka CZ Prague, Czech Republic Penta Investments 169,000 N.A. N.A. P: +420 225 101 110 prague@ pentainvestments.com
www.jtre.sk Westend Gate SLO Bratislava, Slovakia J&T Real Estate 35,000 N.A. under construction P: +421 2 5941 8200 [email protected]
www.savills.pl West Point 120 PL 120 Wlodarzewska Street, Warsaw, Poland Savills Poland 20,480 N.A. 2016 P: + 48 022 222 4000 [email protected]
www.hbreavis.com West Station I-II PL Warsaw, Poland HB Reavis Poland 63,305 N.A. 2016-2018 P: +48 22 203 44 20 [email protected]
www.sekyragroup.cz Zamecky Dvur CZ 9 Vinor, Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: 420 234 005 551-2 [email protected]
ECE Projektmanagement G.m.b.H Zielone Arkady, Bydgoszcz PL Bydgoszcz, Poland 50,000 N.A. Q3 2015 P: +49 40 60 60 60 www.ece.com & Co. KG
www.sekyragroup.cz Zizkov City CZ Prague, Czech Republic Sekyra Group N.A. N.A. in preparation P: +420 234 005 551-2 [email protected]
www.jtre.sk Zuckermandel SLO Bratislava, Slovakia J&T Real Estate 66 000 N.A. planned P: +421 2 5941 8200 [email protected]
The list was compiled by REsource. No claim is made as to the accuracy of the information. The database was compiled based on information by real estate developer companies and real estate agencies as of September 4, 2014.
2014/9. | www.resourceinfo.hu
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