Hungary in a competitive position in real estate investments
2018. 03. 14.
The development opportunities of the capital and four university cities (Debrecen, Miskolc, Pécs and Szeged) could attract multi-million euro investments to Hungary, as they will be presented at this year's international real estate exhibition, MIPIM in Cannes, between 13-15 March. The Hungarian investor environment, development trends, the capital's investments and the investment environment of rural cities were presented by the organisers at the Hungary stand, jointly set up by the Budapest City Government, the National Investment Promotion Agency (HIPA) and the Real Estate Developers Round Table Association (IFK).
MIPIM is the world's largest real estate development exhibition, bringing together the most influential players in the real estate sector in Cannes for more than a quarter of a century. 3,100 exhibitors from 100 countries will take part in the four-day show, which is expected to attract more than 24,000 trade visitors. This year, more than 50 cities have their own stands.
Rural cities are gradually catching up with Budapest, and now offer a uniformly high quality of services, a skilled workforce and a buzzing real estate market for domestic and international investors across Hungary. During the exhibition, a large number of trade visitors visited the Hungary stand, where the four major rural university cities were presented alongside the capital. HIPA will continue to focus on raising the awareness of real estate market players and investors, as well as working capital investors, of the further opportunities available in Hungary
- stressed Róbert Ésik, President of HIPA.
According to Miklós Mártonffy, Chief Architect of Budapest, Hungary is a competitive investment area not only in the region but in Europe as a whole, as evidenced by the latest statistics, with investment growing at an all-time high of 16.7% in 2017, with a strong contribution from the recovery in real estate investment. He also stressed that countries in the region are competing with each other for investors, and so are developers to get the best investment opportunities. In this competition, Hungary - and Budapest in particular - is in an excellent position, with economic growth above the EU average, rising wages and consumption, and a favourable investment environment with a low interest rate environment. Budapest accounted for 90% of last year's €2 billion of real estate investment and we hope to maintain and even increase this level this year.
Ernő Takács, President of the Real Estate Developers Round Table Association (IFK), said it was gratifying that the capital was being joined by large rural cities, four of which were university towns that were also represented at MIPIM. CBRE's latest figures show that real estate investment turnover has increased by 25 per cent annually in Central Europe since 2012, while in Hungary the annual rate has reached 70 per cent. With growth in 2018 up to ten times the 2012 volume, the market has reached pre-crisis levels and is expected to stabilise at €1.8-2.0 billion per year in the long term. In Hungary, office investments were the most popular in 2017, but the share of hotel investments is expected to increase further in 2018. As tourism expands, hotel construction will also pick up in the coming years - Budapest's hotel supply could grow by over 3,000 rooms by 2020. The Hungarian market is not overpriced, with more Hungarian properties increasing their share in the portfolio due to good value for money. Budapest is the largest office market in the region after Warsaw - with nearly 350,000 sq m of space being signed annually by new companies and expansions of existing ones. Up to 650,000 sq m of new office space could be built in Budapest in the next three years.
Hotel, residential, industrial and logistics developments were successfully showcased at MIPIM, with major Budapest property developers Aternor, Futureal Group, Granit Pólus Group, GTC, HB Reavis, Horizon Development, TriGranit and WING presenting their planned or ongoing developments, which will significantly transform the image of a Budapest neighbourhood. CBRE, the world's leading real estate consultancy, presented its latest report at the exhibition, while Knight Bird & Bird represented the field of real estate law at the stand.MIPIM is the world's largest real estate development exhibition, bringing together the most influential players in the real estate sector in Cannes for more than a quarter of a century. 3,100 exhibitors from 100 countries will take part in the four-day show, which is expected to attract more than 24,000 trade visitors. This year, more than 50 cities have their own stands.