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RESPECT DEMANDED BUT UNEARNED Hungary’s freshly reelected governing party is taking on the campaign for the upcoming European Parliamentary elections at the end of the month, with a simple, albeit somewhat dubious message: let’s tell Brussels to show Hungary some respect! From a political perspective, we shouldn’t be surprised by the approach. ‘If it ain’t broke, don’t fix it,’ as the saying goes, and the notion of an embattled nation, besieged from all sides by the European Union’s bureaucracy and international financial interests has yielded convincing results for the government. If there was ever any doubt about that, Fidesz now has another two−thirds parliamentary majority. But back in the real world, let’s have a closer look at this demand: give us respect as opposed to... what exactly? What is the nature of the pain and disgrace that apparently every Hungarian feels – or at last should be feeling – thanks to our having joined the European community. The simple fact is Hungary has only benefitted from its EU membership. Most notably, the country would basically have been unable to build anything without funding from Brussels. All the projects we now enjoy in Budapest, like the fourth metro line, or the square in front of parliament,

or the semi−complete no. 1 tram line, would and could never have been realized from the country’s own resources. As if to underline the duplicity of the political message, while the streets are littered with posters recycled from the general election, a government official is talking about spending yet another HUF 100 billion in EU funds on developing education. It is a worthy goal, of course, but note where the money is coming from. Again. Hungary has received treatment that has been as fair and respectful as any member state can expect. True, it has had plenty of disputes and has received plenty of pressure in recent years, but these were hardly unprovoked. It shouldn’t come as a surprise if a country that blatantly ignores initial polite requests not to act against the community’s law (whether it is reshuffling the central bank, or the justice system, or turning the constitutional structure upside down), and actually makes a point of showboating its maverick status, eventually ends up losing goodwill. This attitude, all too prevalent in the recent past, has turned Hungary into the annoying friend who plunders the fridge when visiting, while all the time unwilling to observe even the least significant house rule, like taking off your shoes at the front door.

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TAKEN FOR GRANTED With the approach of the European elections at the end of May, concerns are widespread that the radical right’s rise in the approval polls will bring a strengthening of the political extreme, or even victory in Western Europe. In this aspect, Hungary, for once, is following the main flow of the continent. It seems like it has become fashionable to hate the common Europe, because it is restrictive, it is imposing and has rules that individual states want to abolish. What these political parties and the people wanting to vote for them need to consider, is what would actually happen if they had their way. The original dream, the ideal of a common Europe, a federation that is similar in mentality and consequently economic competitiveness to the United States will remain that, a concept that was never meant to be, that much has become clear. The Portuguese, Latvian or Hungarian will likely never fully consider themselves first and foremost citizens of Europe and won’t look on each other as fellow ‘countrymen’. But that in no way means that the European Union is a bad idea that should be done away with altogether. In fact, looking back at the history of the continent, the millennia of wars, the borders and the tariffs that were so detrimental

to economic development, it’s no exaggeration to say that the EU is the best thing to ever happen to this continent. At the base of it, this multilateral commitment from member states and the resulting obligations alone played a key role in preventing a multitude of military conflicts thanks to the new form of oversight as well as the consequences. It gave Western member states clean access to a cheap and qualified workforce from the East, markets for their goods and a means to build new political alliances. For the East, the benefits are even clearer and more abundant, through development funding, access to schools and universities, freedom of movement for goods and services, factors that allowed newcomers to make up for decades of lost economic development. Despite the dissenting voices and visions of the EU going the way of the Roman Empire, walking down a path of decay that stems from stifling regulatory principles, there is one thing that every European has to consider: the benefits of being in the EU today already far outweigh any benefits of shutting the borders. It would seem we are taking these benefits for granted, but there is a need to understand that losing them or, even worse, voluntarily giving them up would be disastrous. That is the simple notion that every European should consider when going to the ballots at the end of May.

THE PORTUGUESE, LATVIAN OR HUNGARIAN WILL LIKELY NEVER FULLY CONSIDER THEMSELVES FIRST AND FOREMOST CITIZENS OF EUROPE AND WON’T LOOK ON EACH OTHER AS FELLOW ‘COUNTRYMEN’

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1 News

NEWS

Unemployment rate down 04 NEWS

National Alcohol Strategy

retrospective

THE FIRST 10 YEARS IN NEW EUROPE May 1 marked the 10th anniversary of Hungary and another nine countries from the Central and Eastern parts of the continent joining the European Union. What then felt like a final symbolic transition from the Eastern Bloc to the modern world seems to have turned into a bitter experience for many, even though the strong ties to Europe are the only thing keeping the country’s economy going. GERGŐ RÁCZ

It has been 10 years since Hungary took its milestone leap and joined the European Union, having waited more than 10 years for admission after submitting its application in March 1994. Lately, the matter of Brussels pops up as a political issue in the ongoing European election campaign as well as the ‘maybe−frozen’ money taps the have suspended the flow of funds due to questionable revisions in the allocation of EU money. Various surveys conducted have found that, at best, 50% of Hungarians are satisfied with the EU thus far, a figure considerably lower than in most of the other nations that joined at the same time. Differing opinions of the European expansion strategy are also starting to show in the West, as slowing economic growth is raising doubts about open borders to the east. A Raiffeisen survey of the past 10 years found that back in 2004 the overall enlargement round added just some 4.8% to the EU’s gross domestic product. Undeniably, there are new markets, but now the European Parliamentary elections carry the prospect that member states are reconsidering the 2004 process, which was by no means a smooth ride. TENTATIVE EXPANSION At the time, there were plenty of concerns about how the enlargement process would go and whether admission should even be granted to the less−developed Eastern European economies to join their wealthier neighbors in the west. Eventually, the decision was to go with a ‘big bang’ strategy as it was called at the time and take the bloc’s headcount from 15 to 25 nations. For Hungary, once a member, it remained a crucial issue to promote

STORY HIGHLIGHTS ■

Hungarian politics adopted a deﬁant stance against Brussels under conservative governments ■ Country remains highly reliant on EU funds for development ﬁnances

further enlargement regardless of the political parties in power. This was a key matter in terms of the ethnic Hungarians that still number in the millions spread across the neighboring countries that were cut off after the peace treaties ending World War I. Hungarian diplomacy has prime results to show for its efforts, since its advocacy for enlargement was instrumental in Croatia’s accession, laid out in the Treaty of Accession 2011 signed near the end of the year but ardently supported during Hungary’s EU presidency in the first six months of the same year. SIDETRACKED Hungary’s progress in the EU became somewhat negative as a result of bad policy decisions as well as weaknesses within the structure of the economy. The country’s closer integration into the realm of developed economies only amplified the effect of the financial turbulences when the Lehman Brothers crisis in 2008 nearly crippled the country’s economy in a matter of days, necessitating a bailout from international lenders. The economy, already vulnerable, was subjected to even more pressure by the pre−crisis spread of foreign currency

mortgage loans that were much cheaper than forint−based alternatives at a time when extreme currency fluctuation seemed impossible. Households, companies and municipalities are to this day suffering the effects. Other government policies didn’t help either. Spending and building debt, then trying to compensate through austerity, characterized the socialist government’s rule from 2002. Viktor Orbán’s new approach to government that started in 2010 instead tried to bleed funds from the finance sector and

other profitable, often foreign−owned business sectors while giving the public the impression that others were actually picking up the tab. The only common thing in these approaches is the lack of any workable structural reforms that would have needed several years to reach fruition. The latter approach was more successful, at least in the books, to the extent that last year it was enough to pull Hungary out of an excessive deficit procedure that was launched at the time of the accession.

HUNGARIAN DIPLOMACY HAS PRIME RESULTS TO SHOW FOR ITS EFFORTS... ITS ADVOCACY FOR ENLARGEMENT WAS INSTRUMENTAL IN CROATIA’S ACCESSION

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NEWS FOR THESE PAGES IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.

NEWS

Budapest Business Journal | May 09 – May 22

I was working as an entrepreneur as early as 1991. I kept on making business successfully later as well, so I did not become rich thanks to the Fidesz government.

IN BRIEF

Lőrinc Mészáros, Mayor of Felcsút (hometown of Prime Minister Viktor Orbán) explains how he became one of the country’s richest entrepreneurs. He was listed among Hungary’s 100 richest persons in 2013.

NEW PARLIAMENT TAKES OATH Hungary’s 199 lawmakers took their oaths on May 6 at the start of the new parliamentary cycle. Ruling party Fidesz has 117 deputies, its Christian Democrat ally 16 lawmakers, the opposition Socialists 29, radical nationalist Jobbik 23 and the green LMP five deputies.

ECONOMY OECD: ‘MODERATE RECOVERY’ FOR HUNGARY TO CONTINUE INTO 2015 The Organization for Economic Cooperation and Development (OECD) projected a “moderate recovery” would continue in Hungary in its newly released economic forecast. “The moderate recovery is projected to continue, based on robust export growth and a gradual acceleration of private investment,” read the report in part. Further, “[Private investment] will nonetheless continue to be hampered by an uncertain business environment related to controversial domestic policies and tight credit conditions, which have been alleviated only partly by the central bank’s Funding for Growth scheme and by its low policy rate.” The OECD projected Hungary’s economy would grow by 2% in 2014, unchanged from the forecast published last November; at that time, GDP growth was put at 1.6% for 2015. GEN GOV’T DEFICIT 96.6% OF FULL-YEAR TARGET IN JAN-APR Hungary had a cash flow−based general government deficit, excluding local councils, of HUF 951.1 bln in the first four months, the National Economy Ministry said in a first reading of data. The four−month shortfall reached 96.6% of the HUF 984.6 bln full−year deficit target, Econews calculated. The ministry said that one−off factors, including institutional and other changes made expenditure,

and consequently the full−year deficit, even more frontloaded than before, and the accrual− based deficit target for 2014 is unchanged at 2.9% of GDP. In April alone, the central government posted a deficit of HUF 249.9 bln, Econews calculated based on a HUF 701.2 bln shortfall in the first three months. The shortfalls rose sharply from a HUF 35 bln deficit in April 2013 and a deficit of HUF 528.6 bln in January− April last year. UNEMPLOYMENT RATE IMPROVES TO 8.3% IN Q1 The Central Statistics Office (KSH) reported a 3.5% year− on−year decrease in Hungary’s unemployment rate to 8.3% for 2014 through March. Approximately 370,000 Hungarian citizens were unemployed in the first quarter of the year, an improvement on the 509,000 on the dole reported for Q1 2013. Among males, the unemployment rate decreased some 4.3% y.o.y. to 8.1%. Females saw a 2.5% y.o.y. decline to 8.5%. The unemployment rate of those aged 25 to 54 years old (designated as those of “prime working age”) decreased 3.3% y.o.y. to 7.5%. KSH also reported decreasing unemployment in each of the seven statistical regions of Hungary. According to data from the National Labor Office, at the end of March 2014, the total number of registered jobseekers was 431,000, a 30.4% y.o.y. decrease. PURCHASING MANAGERS INDEX UP IN MARCH 2014 Hungary’s seasonally adjusted Purchasing Managers Index (PMI)

Numbers in the news

2.5%

the new record− low base rate of the National Bank of Hungary, set on April 29. The cut was in line with market expectations.

HUF

bln in ‘Funding for Growth’ loans used so far. Some 98% of the outlay was for new loans rather than for refinancing.

climbed to 54.6 points in April from 53.7 points in March, the index− compiling Hungarian Association of Logistics, Purchasing and Inventory Management (HALPIM) announced today. An index value above 50 shows expansion in the manufacturing sector, while a value less than 50 signals contraction. The index has been over the growth threshold since August 2013. Among the sub− indices that comprise the PMI, the new orders index “rose slightly” and was over the 50 threshold. The production volume index rose and showed higher output for the sixth consecutive month, while purchased stocks were down in April after rising the previous three months.

DOMESTIC HOUSING CONSTRUCTION UP 51% Y.O.Y. IN Q1 The Central Statistics Office (KSH) released ﬁgures showing that through March 2014, 1,692 new dwellings were built, a 51% year− on−year increase. The number of dwelling construction permits rose y.o.y. by 20% to 1654. KSH noted that despite the apparent increase, the number of dwellings put to use remained extremely low, however: Permits issued were just 33% of the number issued in the ﬁ rst quarter of 2008, a peak to which the Hungarian home−construction industry has yet to return. NATIONAL ALCOHOL STRATEGY FINALIZED Alcohol consumption of Hungary is dramatic compared to

neighboring countries and this trend should be acted upon, thus the National Addictology Center (OAC) has established a strategy to decrease alcohol consumption. The 2013 survey of the World Health Organization also pointed out that Europe leads in death rates caused by increased alcohol consumption.

POLITICS EU CITIZENS VERY LOW IN CONFIDENCE IN UNION Heading into European Union parliamentary elections this month, an Ipsos Institute poll shows that many citizens of 12 EU nations including Hungary would apparently rather vote for exiting the bloc itself. According to results from the poll undertaken in March, just 30% of respondents are for their national government remaining under EU auspices. In responses to a separate question, 30% also want their national government to “take measures to circumscribe EU influence”. Some 18% of respondents in the poll would favor a full withdrawal of their national government from the EU, while just 13% advocate a stronger EU – in all, quite an about−face for European citizens of whom a whopping 63% backed a stronger EU in a 2005 Ipsos poll. About 12,000 citizens for 12 European Union member states (Hungary, Belgium, Britain, Croatia, the Czech Republic, France, Germany, Italy, the Netherlands, Poland, Spain, and Sweden) were surveyed in the poll.

Photo: László Beliczay / MTI

04 News

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News 05

Budapest Business Journal | May 09 – May 22

COMPANY NEWS

Small− and medium−sized entrepreneurships in Hungary are likely to spend HUF 2,910 bln on investments in 2014, up 30.1% from last year, GE Capital, parent of Budapest Bank, said. SMEs in Hungary spent HUF 2,237 bln on investments last year, 15% more than they had planned, and 32.9% more than in 2012 when they spent HUF 1,683 bln.

GREAT TWIST IN RUBIK’S HISTORY New Jersey is hosting a special exhibition of the Rubik’s cube celebrating its 40th anniversary. Hungarian inventor and architect Ernő Rubik developed the well-known puzzle cube in 1974. After it was exported in 1980, it became the world’s fastest-selling toy. Rubik teamed up with the New Jersey-based Liberty Science Center to organize the exhibition. It shows the first humble prototypes made of wood and rubber bands. The most expensive cube – made of 18 karat gold with 1,360 jewels – can also be found here. Rubik referred to the cube as his eldest child. Starting April 26, the exhibition will be open to the public for seven months before starting a sevenyear tour around the world.

Hungarian drugmaker Gedeon Richter expects revenue – calculated in euros – to fall 6% this year on the back of a decline in turnover in Russia, Ukraine and the CEE region, CEO Erik Bogsch said after the company published its Q1 earnings.

MICHELIN ANNOUNCES CLOSURE OF BUDAPEST PLANT ON ‘SHRINKING TIRE MARKET’ Michelin Hungária yesterday announced the planned closure of its truck tire plant in Budapest. Labeling the facility “outdated”, the plant will be closed “because of a shrinking market for truck tires”. That contradicts just-released statistics from the European Tire & Rubber Manufacturers Association (ETRMA) that showed notable increases in tire sales – including truck tires – throughout the European Union in the ﬁrst quarter of 2014, not to mention nearly double average EU sales in Hungary. Also cited as a reason for the plant’s closure is the location, which “does not make [revitalization of the facility] economically feasible”. Company representatives promised to continue production of its ‘Super Sport’ tires at the Michelin factory in Nyíregyháza and to remain committed to its Budapest logistics base and trade unit in Tuzsér. A total of 512 jobs will be lost with the plant’s closure.

Nine lenders, among them Raiffeisen Bank, Erste Bank Hungary and FHB Commercial Bank, are contesting fines by the National Bank of Hungary (MNB) levied for illegally raising client fees, local business news outlet Napi Gazdaság reported. In its role as financial market regulator, MNB announced in March the fining of 35 banks a combined HUF 1.2 bln for illegally raising fees and ordered full refunds – estimated to be up to HUF 10 bln altogether – for customers. Shareholders of OTP Bank approved a proposal to pay a HUF 145−per− share dividend at an annual general meeting. Taking into account treasury shares, shareholders will get HUF 147 per share from the HUF 40.6 bln dividend fund. OTP Bank had net income of HUF 69.4 bln last year. OTP shareholders approved a HUF 120−per−share dividend a year ago. Germany−based automobile manufacturer Daimler has launched a third shift at its Kecskemét plant, raising the personnel roll there to 3,500. The increase was due in part to recently launched production of a new line of Mercedes−Benz compacts. In 2013, the Kecskemét plant saw more than 109,000 vehicles roll off its assembly lines. Prague−based used car seller AAA Auto sold 158 cars in Hungary in April, shortly after returning to the country following a five−year absence, the company said. AAA Auto sold a total of 5,722 cars in the Czech Republic, Slovakia and Russia, in addition to Hungary in April. AAA Auto temporar− ily shut down its operations in Hungary because of the worsening economic situation and poor demand. Jászfényszaru Ipari Centrum has laid the cornerstone of a HUF 1 bln expansion at its industrial park. The project, which will add more than ten hectares to Jászfényszaru industrial park, includes the construction of a ‘business house’ with 15 offices and six workshops. A state grant is cover− ing about 50% of the costs. Pharma−Flight has laid the cornerstone of a HUF 5 bln pharmaceutical research center to be built in Debrecen (eastern Hungary). The investment is supported with a HUF 3.4 bln grant from the European Union. When ready, the center will focus on research and producing drugs and dietary supplements for aviators. Sinergy is spending more than HUF 1 bln to build a biogas plant in Balas− sagyarmat (northeastern Hungary). EU funding will cover half of the costs of the investment. Construction is planned to start in July and the plant should start operating in May of next year.

Hungarian property developer Futureal is planning a €170 mln office build− ing at the terminus of Budapest’s new fourth metro line. The 70,000 sqm Budapest One building will be located at the Kelenföld end of the M4 line. Construction is planned to start in Q1 2015 and will wind up in Q1 2017. Four companies have made bids for the assets of troubled meat company Kapuvári Hús, two for all of the company’s assets and two for part, liquida− tor Nemzeti Reorganizációs Nonprofit’s managing director Csaba Kovács told MTI. The previous five tenders for the assets of the meat company’s assets have all failed. Kapuvári Hús, located in the town of Kapuvár (west Hungary), underwent liquidation in the fall of 2012. Hungarian poultry processor Gallicoop’s revenue reached HUF 32.1 bln last year, level with 2012. Turkey sales rose from 21,700 to 24,000 tonnes. Net export revenue climbed 22% to HUF 11.5 bln on sales in Austria, the UK, Romania and Croatia. Gallicoop controlled 44.5% of the domestic turkey market last year. Telenor Magyarorszag’s first−quarter revenue edged down to HUF 36.76 bln from HUF 37 bln in the same period a year earlier, the telco reported. EBITDA, excluding one−off items, fell to HUF 13.57 bln from HUF 14.15 bln. Telenor said EBITDA was negatively influenced by higher telecom tax− es. The number of the company’s mobile Internet subscribers rose 35% to more than one million during the period. Germany’s Gustav Wolf group inaugurated a HUF 140 mln production hall in the mechatronics industrial park in Miskolc (northeast Hungary). The company won a HUF 40 mln grant for the hall, where 20 engineers and skilled workers are employed. The hall is Gustav Wolf’s second at the base. State−owned waste management company NHSz wants to buy one of its chief competitors, Austrian state−owned AVE, local news daily Magyar Nemzet has reported. The paper reckoned that, should the National Compe− tition Office (GVH) approve the acquisition, NHSz would claim a customer base of some 2 million. MOL Romania, a subsidiary of Hungary−based oil−and−gas group MOL, end− ed 2013 with a turnover of some €979 million, up 5.1% year−on−year, due to higher sales volumes. In 2012, the company had a turnover of €931 million.

Graphisoft Park had after−tax profit of €574,000 in the first quarter of 2014, up 64.5% from a year earlier as the result of the negative base effect in 2013 from AMRI Hungary’s termination of its lease agreement the previous year, Graphisoft Park announced in its consolidated first−quarter IFRS report. Graphisoft Park sustained extraordinary losses of €112,000 in the first quarter of 2013 as the result of AMRI Hungary’s lease termination, compared to extraordinary gains of €29,000 in Q1 of this year.

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2Business Q&A

TOP MATHEMATICIAN PRESIDES OVER SCIENTIFIC INSTITUTIONS Among scientists of the word, it has always been a hotly debated question whether managers specialized in science or senior scientists do a better job as research directors. In Hungary at least, there seems to be a clear−cut answer to the problem: the best scientist is the best scientific manager. László Lovász (66), a Hungarian mathematician of great international impact, was recently elected president of the Hungarian Academy of Sciences (MTA). The Budapest Business Journal questioned him about current sensitive issues in science management. ANDRÁS ZSÁMBOKI

In Western Europe, huge scientific research such as CNRS and May Planck have made considerable efforts to switch their financing model to a project−based system instead of relying on supporting institutions. In Hungary, such a reform has hardly started at all. A: I would not contrast these two financing systems so sharply. It is certainly important that the financing of research should depend on the results, and promising new projects should get the necessary support. On the other hand, it is also commonplace that the real scientific breakthroughs are unplannable, and often the first publishable results are produced slowly. The research style in many humanities is again quite different. I think a variety of financing models should be used, in the right proportions, monitoring the results of the reforms of the last period.

THE NUMBER OF KIDS WHO HAVE A CHANCE TO BECOME SCIENTISTS IS DROPPING. I WOULD SUPPORT CHANGES IN THE LAWS AND IN THE EDUCATIONAL SYSTEM THAT COUNTER THIS

Will participation in big European research projects be a priority in the coming years? Do you want to facilitate cooperation through institutional reforms? A: It is extremely important that we integrate our scientific research into European (and world) science. If participating in big projects best does this, then this must be sponsored. But I also believe that small−scale cooperation (on the level of persons and research groups) is often equally important, and we have to be active in further developing a European framework for this.

In the United States and Western Europe the most accepted marker of scientific output is the so−called impact factor based on scientific citations. MTMT, its Hungarian equivalent, is maintained by the personal contribution of publishing scientists themselves. A: The use of impact factor and other quantitative measures based on citation statistics is hotly debated worldwide. These

are quite generally (but not universally) accepted in experimental sciences, but rejected for example in mathematics, and totally inappropriate for humanities whose subject matter is country−specific. Any evaluation system for grants, prizes, jobs etc. must take these differences into account. MTMT is an important database to have, but it should be developed to become more user−friendly. Differences between different branches of science play a role here as well. For example, the handling of open access and copyright issues has different traditions in different sciences. On both issues, the academy must cooperate with several EU organizations (and take the lead if necessary), since efficient answers can often be found only on the European level.

What do you think of the Higher Education Act as an academic man and a university professor? A: Universities are very important for science as a source of new talent, but also as research centers. The leading research universities in Hungary should be on an equal level with the academic research institutes. The academy has made important steps to improve relations and to support university research by creating a new research center next to the campus of two main research universities, and by financing research groups and grants and universities. The current law about higher education has several features that stand in the way of improving this cooperation, and the academy should strongly support changes that make university research and education more efficient. Scientific research requires special talent, and talented children from all classes of society should be discovered, supported and nurtured. The divergence in social status that we have experienced in the last 25 years is a great danger from this point: the number of kids who have a chance to become scientists is dropping. I would support changes in the laws and in the educational system that counter this very serious problem.

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2 Business

Budapest Business Journal | May 09 – May 22

NEW METRO FOR THE NEXT CENTURY Budapest’s M4 metro project has finally been completed after many years of difficulties; Siemens is among the handful of companies that were instrumental in the project. Jürgen Brandes, Chief Executive Officer of Business Unit Rail Automation at Siemens AG, Infrastructure & Cities Sector, talked about the experiences of the venture and the specialties of this brand new addition to Budapest’s public transport.

of the signaling system is also PPE (radar−based passenger protection equipment). If a passenger falls from the platform onto the tracks, PPE detects the accident and cuts the power supply before the incoming train arrives. Furthermore, in the power supply technology, all ten stations have been installed with a unique 10kV fire retardant and resistant cable, which fulfils the strict fire safety requirements on the M4 line. Switchgear cells were also designed with a fortified frame to protect the operators in case of any malfunction leading to an explosion inside the cells.

Other European cities have already run the driverless Metro – what have been the experiences? A: For the first time in Hungary and in Central and Eastern Europe, driverless train sets will be operated along the M4 by CBTC−based automated train control, assisted by other Siemens− built systems. Metro lines with Siemens driverless automation technology have been operating successfully around the world since 2008. Siemens has supplied, among others, Paris, Barcelona, Algiers, Nuremberg and Sao Paolo with automatic train control systems. These projects made the metros safer, more energy efficient, and also faster. Metros with our CBTC systems transport millions of people every day globally. We get orders to supply existing and brand new metro lines with our technology; this assures us that our technology can help people to live a better life through providing state of the art public transportation.

BBJ STAFF

M4 has been a long awaited and important project for Hungary. How does it fit into the Hungarian portfolio of Siemens? A: Siemens has always been in the forefront of Hungarian industrial and transportation development, since 1887. The company introduced the first electric tramline in Budapest and the first underground railway on the European mainland. Following countless further automation, signaling, rail electrification and rolling stock projects, the M4 project is the result of a decade−long planning process, connecting the southern boroughs of Buda with the center of Pest, the important railway stations of Kelenföld and Keleti pályaudvar, many traffic junctions, and transporting

Jürgen Brandes studied electrical engineering at the Leibniz University of Hanover, Germany. He also holds a PhD from the same university. He joined Siemens in 1989 and held a variety of positions over the years until he was appointed to his current role in 2012.

tens of thousands of people daily, all coming to fruition with the involvement, technology, and know−how of Siemens. Strong performance, on time delivery, and various Siemens’ innovations raises the project to being among the most sophisticated the company has delivered in this technology area.

What are the specialties of the Budapest M4 line from the Siemens point of view? A: The scope of the project is the installation and commissioning of the power supply system, the signaling system including platform protection,

Q CV

the CBTC train control system including an Automatic Train Supervision system and the various communication systems on the line, including the depot area located besides Kelenföld terminus. Among the specialties of the project are of course the high degree of automation of train operations and the entire system. Even train operations in the depot area, for example, are designed to be driverless. In the stations and along the line, highly integrated communication, information and dispatcher systems have been installed, which can be controlled locally in the stations as well as from the line’s control center.

Another example is energy efficiency for example the installed power supply system supports recuperation from train sets, which is theoretically able to reach 40% energy saving.

What are the most important safety measures? A: The main safety related systems that control, protect and monitor safe train operation are the Signaling System based on our SICAS interlocking technology and the Automatic Train Control and Automatic Train Protection systems, as the core functionality of the CBTC system. Part

Siemens is deeply engaged in urban transportation; where do you see the future? From where might the next innovation come? A: Cities grow all around the world. Day by day, ever more people choose to live urban lives, and they want to do so happily, balanced, and successfully. In order to meet these expectations, we need a city that is sustainable, smart, mobile, optimally integrated and with a transportation system that can meet the high−quality expectations of millions of people. This is achievable only through better traffic management systems, high capacity and state−of−the−art metro rail systems, and other urban transportation networks that function in accordance with the lives of the people using them. Smart cities are the future, where integrated technologies enable people and goods to be transported in an efficient, safe and environmentally friendly way. Part of this technology is already in our hands: our intelligent traffic information and management systems – of which more than 1,000 have either been built or are in planning around the world – can cut traffic jams and road accidents, and just as importantly, can slash carbon dioxide emissions by up to 20%, but we need to continue developing and perfecting technologies that will enable us to live a life where no traffic related problems bother us.

2 Business

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// IT, telco

Cloudgazing

Budapest Business Journal | May 09 – May 22

The Budapest Business Journal’s new column about IT and telecom focuses on the new developments in the tech sector, on the rapid change in services, and the transition to the cloud. It explores how businesses are using the channels already available to them. It appears in every second issue.

POWER TO THE BYOD PEOPLE! Workers are getting increasingly mobile due to cutting−edge technology and BYOD, the bring−your−own− device phenomenon; the rules of work and the role of gadgets are being transformed. LEVENTE HÖRÖMPÖLI-TÓTH

First it was Microsoft’s PDA, then came the iPhone in 2007, followed in 2010 by the iPad’s emergence. These milestones mark the cyber era evolution of mobile working. Firms and workers capitalize on these godsend inventions alike. The former enjoy higher productivity, which is directly linked to greater profit, whereas the latter can squeeze out the most from every second of a business trip or a fieldwork project.

STORY HIGHLIGHTS ■

BYOD is sweeping the working landscape, but it does raise security concerns ■ Smartphones can do ever more, but one mobile device to do everything seems likely to remain a fairytale. For now.

AREN’T WE LAGGING BEHIND, DEAR? Global trends clearly point to more mobility and more Internet use. However, Hungary offers a mixed picture in terms of smart device penetration. Telenor Hungary reports that three−quarters of handsets sold are now smartphones, whereas in 2013 the number of tablets sold quadrupled compared to the year before. However, other indicators paint a less rosy picture. As shown in the latest survey by non−profit We Are Social, smartphone penetration amounts to only 34% of the total population, and in terms of mobile web penetration the country fairs even worse at 31%, according to a report by the Hungarian Media Authority. The latter figure puts Hungary at the very bottom of the EU ranking, according to the European Commission. It would be unfair to blame lack of interest. According to a recent poll by KutatóCentrum (Research Center), the rate of Internet users aged 18−59 using mobile broadband hit 56% in 2013, up from 42% in 2012. INSATIABLE HUNGER FOR MOBILE DATA “Mobile broadband is gaining in popularity in Hungary, not only among consumers, but also for business purposes. We are addressing this demand by stretching the data allowance limit from 2 to 4 GB in our Red Plus premium flat−rate package,”

BYOD IS EVERYWHERE, BUT BE AWARE! A Forrsights Networks And Telecommunications survey that shows two−thirds of firms in Europe and North America identify providing more mobility support for employees as a top priority further underlines the fact that corporate mobility initiatives are gaining momentum. Teleworking, also known as telecommuting, is on the rise, allowing a growing number of people to work from home or on the go. But the number of functions the smart gadgets are used for is also growing. With Apple Store hosting more than one million apps, this could hardly be easier.

When you newly join a company, apart from the burden of having to remember dozens of names, day one should normally be about getting at least two gadgets thrown at you: a smartphone and a personal computer of any form. Now if you happen to be an Apple fan, and those devices are what you regard as an ‘inferior’ design, starting work will be a lot less fun. However, it is not only i-fetishists that share that sentiment. Ever more workers prefer to keep their own tools for work because, well, it’s more convenient. No need to duplicate file saving, not to mention the trouble of carrying two of each item all the time. Employers seem happy to lend a helping hand. A recent survey (see chart) showed that 46% of enterprises provide at least some level of support to some personally owned mobile devices.

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2 Business

Budapest Business Journal | May 09 – May 22

// IT, telco 09

REMOTE HANDS IN ACTION

Employees who insist on using their own devices at work and are allowed to do so may have won a game. But that comes at a price. For employers certainly can’t let things get entirely out of control. Here are the three main methods used: MDM (MOBILE DEVICE MANAGEMENT). This is literally remote control in its purest form! An app called MDM Agent controls your mobile device according to the company’s mobile management policy stored on the central control/management server. That central server can command Agent to lock, reset, or turn off the device or prevent data leakage if necessary. That also implies that smart devices can be operated without the control of the user at any time. MAM (MOBILE APPLICATION MANAGEMENT). MAM was invented to loosen Big Brother’s grip around your neck. MAM controls apps rather than devices, e.g. it does not affect any features other than apps allotted for company use. Compared to MDM, MAM does still control part of the hardware but to a less radical extent: it only plays a role in installing and sorting apps in the storage. And apps cannot be installed without the user’s approval. VIRTUALIZATION. MDM is intrusive, MAM is less strict, but raises some security concerns. So the concept of virtualization emerged. It uses a method of installing a virtual mobile OS on the pre-existing mobile OS. The user’s personal territory is the pre-installed mobile OS, while the company’s territory is the virtual mobile one, each of which is operated separately.

the Vodafone Press Service told the Budapest Business Journal. Appetite for more mobile data access is one thing, choosing your gadget for the right purpose is another. The need to have more than one device hooked to the web is becoming routine now. Being restricted to Wi−Fi spots for on the go connectivity is also frustrating people. But that extra SIM for your tablet can cost you a lot. Providers see that happening too and seem to be ready to take action. Vodafone, for instance, offers a second

SIM card with its renewed Red Plus package, thus allowing the parallel use of two separate pieces of mobile equipment for online surfing. Another step would be to include the purchase of two mobile tools in one subscription, which would surely serve as an incentive for users to gear up with multiple web−connected gadgets. TOUGH CHOICES The device landscape is changing as well. Even though tablets are

SPOILING THE CTO’S DAY The BYOD (bring-your-own-device) movement is thus thriving in spite of the fact that it is a potential security threat to firms. Since Hungary is no different from the rest of the developed world in terms of BYOD penetration, the same concerns exist here. “You can’t stress enough the importance of regular Internet security training, which plays a crucial role in protection against technical and so-called social engineering-type

relatively big, they better suit content consumption purposes than work. Manufacturers came up, therefore, with hybrid tablets, equipped with a keyboard and an easy−to−detach screen. “We think such devices will feature in future corporate IT trends, so we have been offering them since the end of last year,” Telenor said. The advent of one mobile device to rule them all is probably wishful thinking, never to be fulfilled. For now many duties can be performed even with a smartphone such

as viewing a PowerPoint or an excel file. That should be a last resort, though, since certain tasks are simply too complex to carry out on a tiny screen. The dominance of smartphone stands beyond doubt, but hybrid tablets have a good chance to become widespread too. And wearable gadgets such as smart watches or glasses are also in the mix. But whatever the next big thing may be, it takes only an educated guess to predict that it will most certainly be wireless and always online.

attacks,” Péter Béres, Senior IT Consultant at Sicontact Kft. said. “Today even small companies or those with smaller staff may be targeted which is partly due to the fact that automated attacks do not differentiate in terms of size of target. They simply search for vulnerable systems and often attempt to break into bigger corporations’ systems through smaller and less well protected suppliers.” On the other hand, no bad guys are necessarily needed to spoil a CTO’s day. A random virus attack or loss of a device may cause enormous harm to a business. That requires the assessment and classification of corporate assets, adequate overall preparedness, and constant security alertness.

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10 2Business

Budapest Business Journal | May 09 – May 22

RECRUITMENT À LA CYBER AGE There is a lot going on in the HR software battlefield. The market has consolidated, talent management solutions rock, LinkedIn has become essential. And the landscape is dominated by well−known buzzwords such as ‘cloud’ and ‘mobile’. LEVENTE HÖRÖMÖLI-TÓTH

2011 and 2012 saw a shake−up of the HR software market, with three major acquisitions leading to an unprecedented consolidation. IBM bought Kenexa, Oracle acquired Taleo and SAP swallowed SuccessFactors with a view to complementing their core HR service portfolio. “This way solution providers have consolidated, but they have also moved towards generalization which means they have less local knowledge,” Szilárd Ocskay, managing director of NEXON told the Budapest Business Journal. “Those acquisitions were aimed at more than gaining control over sophisticated recruitment software. They targeted a software−as−a−service (SaaS) solution.”

STORY HIGHLIGHTS ■

Growth in the HR software market is driven by talent management sectors, supported by a shift to cloud-based solutions LinkedIn, despite being a crucial recruitment tool, cannot replace HR software and expertise

TALENT IN THE CLOUD Indeed, the market moves of the giants point to the fact the traditional HR administration segment (payroll, time and attendance, and benefits management) is gradually giving way to talent management services. The latter – recruiting, training, performance management and succession planning – are what rock the boat now in the industry. “Companies tend to shift to solutions offering a higher HR partner added value. HR software providers also go with the flow, since this is how they can support their customers’ strategic plans,” Csaba Fehér, sales consultant for Central Europe with Oracle pointed out. “This is fueled by the fact that SaaS, aka cloud−based solutions, are getting increasingly popular.” Applying the appropriate recruitment software is part of the game. “It is of the utmost importance to our company that in our system one should be able to follow recruitment procedures in full length

in a transparent manner. Follow−up of applicants and CV management must also be efficient and fast, a precondition to satisfying the wishes of customers quickly,” Domonkos Kisbej, Senior Delivery Consultant of recruitment firm Hays Hungary, said.

simply cannot be reached or addressed efficiently through that channel,” Kisbej said. What is likely to develop is rather interaction. “The most likely scenario is that LinkedIn and similar solutions are going to operate in integration with corporate recruitment and other talent management

STILL SHORT OF SUPREMACY What tends to have an ever−bigger impact on the $400 billion cyber age recruitment industry is social media. Some claim that LinkedIn and its ilk could totally upset the businesses developed by leading software providers. Some 93% of recruiters use LinkedIn for recruitment, up from 78% two years ago. “Hays Hungary uses software developed to meet its own needs, and it is connected with LinkedIn which is unique on the Hungarian market,” Péter Lust, Team Leader of the Business Services Division of Hays Hungary said. However, talking of the supremacy of the social media behemoth would be premature. “LinkedIn is an important recruitment tool, but by itself it cannot replace recruitment software or complex selection procedures. Certain target groups

solutions, thus drawing on both the advantages of social media and the services of corporate recruitment systems,” Oracle expert Fehér added.

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GOING MOBILE Analysts also argue that 2014 will be the year of going mobile in HR technology. A Gartner survey found that, by 2016, 40% of the workforce would be mobile, which presupposes the accessibility of business functions on cell phones. User friendly and mobile compatible interfaces will therefore be standard requirements, just like the availability of HR−related data for candidates, HR experts or management. Using self−service applications alone allows 40% more workers to be served and 25% more executives, research by Cedar Crestone, an American analyst firm established.

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Budapest Business Journal | May 09 – May 22

A CAPITAL PLAN

The long−term development strategy of Budapest, valid until 2030, was approved by the city council last year. The first mid−term phase of the strategy, containing the guidelines for the next seven years, will be approved this month. The real question concerning both the long− and mid−term plans, however, is where funding for their realization will come from. The Budapest Business Journal asked Sándor Finta, Chief Architect of Budapest. ANDRÁS ZSÁMBOKI

Your position is virtually unprecedented in the Anglo−American world. You are one of the leading officers of Hungary’s capital city, responsible for both the development plan and the regulation plan of Budapest. Thus you are both a man of vision and a chief official at the municipality. Isn’t there an inherent contradiction in that? A: My position, which was created in 1990, is rooted in the French tradition. I am an architect and an urban planner by profession, which involves a rather complex set of tasks. I have to find equilibrium among very diverse competences including civil engineering, social policy, and property management. Being also a city official makes things even more complex; for example, the preparation of municipal statutes is among my responsibilities. The long−term development strategy of Budapest as well as its first mid− term implementation, the latter being currently approved by the city council, fit into a so−called planning hierarchy. Both the general development plan and the regulation plan for the whole of Budapest are theoretically mandatory for every district of the capital city. In practice, however, the districts – which enjoy substantial financial and political autonomy – often disregard the regulatory intentions of the Budapest municipality.

How about the funding provided for the realization of the development plans? A: In the annual budget of Budapest, the budget dedicated to development has always been meager. The local (district) governments have always received more central funding than the municipal government of the whole city. The distribution of funding has become even more disproportionate in recent years. It is thus not surprising that the largest development projects of the municipality are all related to either

transportation or the environment: those are the two fields for which it is possible to mobilize funding from the Hungarian government and the EU, in addition to the resources of the Budapest municipality itself.

How about the creation and development of local centers within the city? A: The capital city possesses neither the funding nor the legal authority to develop those. From the point of view of property management, these hubs belong to the district governments. In order to draw private investment into the development of local centers, it would be necessary to develop infrastructure,

including public transportation – especially tram and subway lines. The Chief Architect has no authoritative means in his or her hands by to influence that process. All we can do is find the points of synergy involving district governments, the national government, civic organizations, and private investors.

Could you give us some examples? A: A good example for cooperation between the municipal government and certain district governments is the so−called Nyugati Grund in the 6th district. This is a brownfield area behind Nyugati Railway Station, ready for revitalization.

Formerly part of the railway station and now out of use, the area is currently managed by the Hungarian National Funds Management; it lies near important sites such as the Museum of Fine Arts, City Park, and the planned new museum quarter. It is thus desirable to develop it into a public park first, to improve the area, and prepare the way for further utilization. The city of Budapest plays an important coordinative role in the conversion of that brownfield spot; in that particular case, the cooperation of the Budapest municipality with the 6th district local government and its mayor Zsófia Hassay is exemplary. As far as the cooperation between the Budapest municipality and civic

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organizations is concerned, the reutilization of vacant stores can be quoted as a good example. The city regards it as its task to call the attention of the individual districts to the fact that the condition of the historic building stock controlled or owned by the districts needs improvement: for instance, the multitude of vacant stores create a bad impression, and the districts should design novel policies for their utilization. With the support of the city of Budapest, the Center for Contemporary Architecture (KÉK) runs the ‘Rögtön jövök’ (‘Back in a Minute’) project, the purpose of which is to map out vacant stores and abandoned buildings of former public institutions – e. g. schools or hospital buildings – in the city; another such project is ‘Lakatlan’ (‘Vacant’), which aims to map out all types of vacant real estate, including residential, industrial and commercial properties. As far as these locations are concerned, the task of the Budapest municipality is to convince the district governments that it is worth offering up such vacant properties to, for example, artists who can open their studios there. At the beginning, the district governments usually resist the idea, arguing that in this way the stock of their rentable stores will decrease; in reality, however, the vacant buildings and stores represent dead capital, i.e. property that is very difficult to rent out. From the point of view of positive sentiment it is much better if someone at least works actively in a formerly vacant store, and

Budapest Business Journal | May 09 – May 22

THE LARGEST DEVELOPMENT PROJECTS OF THE MUNICIPALITY ARE ALL RELATED TO EITHER TRANSPORTATION OR THE ENVIRONMENT: THOSE ARE THE TWO FIELDS FOR WHICH IT IS POSSIBLE TO MOBILIZE FUNDING FROM THE HUNGARIAN GOVERNMENT AND THE EU passers−by can see some life inside such a ground−floor unit. As far as private capital is concerned, we can rely on it mostly in areas where there are already signs of recuperation: for example, in historic districts undergoing revitalization.

Private capital can join the strategic process in a number of ways. The historic center of the city must be preserved at any cost. Private capital can find the best opportunities in the old historic districts, ideally in the form of

so−called temporary utilization. To quote an example for that, former residential buildings can be converted into boutique hotels in the side streets of Andrássy út; but the same buildings may receive other functions later in the future.

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Budapest Business Journal | May 09 – May 22

RAPID GROWTH OF GREEN BUILDING CERTIFICATION IN CEE Central and Eastern Europe goes green with 1.75 million sqm of existing office space in the region already certified, recent research conducted by JLL on sustainable office development in Central and Eastern Europe reveals. According to the study, Poland leads the pack with 730,000 sqm of certified office space. BBJ STAFF

According to EU Directive 2010/31/ EU, by the year 2020 all new buildings in the European Union will have to prove that they are nearly zero−energy buildings. By the year 2050, carbon emissions from all buildings need to be as near to zero as possible.

Consultancy CEE at JLL, commented on the study. “Obtaining green certificates is currently the optimal way to emphasize a company’s engagement in sustainable development issues. It is also a tool that confirms how much a building’s impact

BREEAM. Energy and water use, carbon emissions as well as the application of eco−friendly solutions and materials are all analyzed in the certification process. The majority of certification methods also have options to improve and certify sustainable improvements for existing buildings, such as BREEAM In−Use and LEED EB:OM (Existing Buildings: Operations & Maintenance). CEE OFFICES GOING GREEN More than 71% of existing certified office space in the region was certified under BREEAM certificates. The systems most commonly used in the region for existing buildings are BREEAM In−Use and LEED EB:OM. When it comes to new developments, BREEAM Europe

volume of potential pipeline in Poland will be even higher. In the majority of markets, a very high percentage of new projects in the pipeline, 100% in some markets, will be targeting green certification. Pipeline projects also include the first green buildings from Serbia and are on the up in Hungary, Romania and Slovakia. For offices, less operations and maintenance certification and more new build certification is being seen, which is due to the large pipeline in Poland (mainly Warsaw) and the gradual return of development in other parts of the region. It is also predicted that certification of commercial interiors will become more popular among tenants who require

Share of certification methodologies (volume/sqm) in existing certified office buildings in CEE

BREEAM

LEED

Other

5% 23%

72%

Source:JLL, February 2014

“Commercial real estate is now generally recognized as pivotal in the fight against global environmental challenges, including climate change and the consumption of increasingly scarce resources. The United Nations Environment Program (UNEP) estimates that, globally, buildings are responsible for more than 40% of energy use, one−third of greenhouse gas emissions and 30% of raw material use,” Kevin Turpin, Head of Research and

on the environment has been reduced. Another factor worth highlighting is the economic aspect with certified buildings obtaining higher occupancy rates. Moreover, such facilities attract strong, widely recognized brands, who have sustainability as an integral part of their organizational culture,” Rita Tuza, Head of Research at JLL Budapest, LEED Green Associate explained. The two most well−known and popular green certification systems are LEED and

Commercial, for office or commercial buildings and LEED for New Construction and LEED for Core & Shell are the most commonly used. Interestingly, at least 2.5 million sqm of existing developments or pipeline projects in the CEE are targeting green certification, with Poland accounting for 700,000 sqm. However, it should be noted that many planned BREEAM projects have not yet been registered, so the final

sustainable offices as part of their Corporate Social Responsibility charters. Governments are slowly increasing legislation for sustainable practices but, despite all the potential benefits, still offer very little in the way of tax breaks and other incentives for investors and developers. In fact, it is largely property and asset managers, developers and occupiers who are driving this process because of the growing number of CSR programs.

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Budapest Business Journal | May 09 – May 22

DUNA OFFICE CENTER WINS INTERNATIONAL GREEN CERTIFICATE

CONVERGENCE APPOINTED PROPERTY MANAGER FOR NEW KPMG HQ

The Duna Office Center, located on Váci út and operated by BNP Paribas Real Estate Hungary, has received the BREEAM In−Use International certification with a ‘Good’ rating. The complex was one of the first buildings on the capital’s most popular office corridor, Váci út. It is currently in its third life cycle and underwent several renovations in recent years. It has been internally and externally renovated in line with the latest requirements. The building has thus become a valid competitor with newly built ‘A’ category offices, the operating company said in a press release. The asset manager of the Duna Office Center is CE Land.

KPMG, one of the leading audit and consulting companies in Hungary, has entrusted real estate asset and property manager ConvergenCE with the property management of its new headquarters. KPMG will occupy approximately 11,200 sqm of the A+ category Vision Towers North office building, located at the junction of Váci út and Dózsa György út, from August 2014. Vision Towers is the fifth major office building where asset or property management services are provided by ConvergenCE, adding KPMG to an impressive list of clients that includes office buildings owned by JP Morgan funds and the Europa Fund. ConvergenCE also provided project−monitoring services to KPMG during the development of its new offices at Vision Towers in the last two years.

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Budapest Business Journal | May 09 – May 22

A HUNGARIAN MULTI IN THE CENTRAL EUROPEAN CONSTRUCTION INDUSTRY ANDRÁS ZSÁMBOKI

According to latest news, you are about to acquire the do−it−yourself chain Praktiker, which recently went bankrupt. What is your reason for this decision at a time when not only Praktiker, but also other DIY chains are struggling? A: We would like to buy up Praktiker because we think we can run it well. On the one hand, we would like to make use of synergies, namely the fact that Praktiker’s profile is the construction industry, and therefore Praktiker would be integrated into the bottom level of the vertical industry. On the other hand, we would like to take advantage of the fact that there is a stable demand for construction materials and equipment, so the chain will generate continuous income. Whether or not the Praktiker deal will be struck depends on what price we manage to agree on.

How about the other new profiles of KÉSZ, unrelated to the construction industry? KÉSZ has managed to develop in several new branches, including hospitality and the delicatessen industry. A: KÉSZ has been operating for 32 years. We employ more than 1,500 people today, and we would like to take advantage of their expertise to the fullest possible extent. In the course of KÉSZ’ history, we have amassed substantial experience in company development. This is not experience related to specific industries, but a more general experience in broader areas such as acquiring new markets, coordinating marketing activities, and brand building. Looking around in today’s economy, we have discovered that the delicatessen industry harbors the greatest possibilities: production preconditions in Hungary are good, and there would be substantial demand as well, but the concentration and coordination of individual manufacturers have only reached a very low level. That is why we have founded Hungarian Tastes Trade Association Joint Stock Company (MIKSZ Zrt.) – for the promotion of high quality Hungarian food products. It has grown out of Kézműves Magyar Ízek (Handicraft Hungarian Foods), an umbrella organization that brings together Hungarian handicraft manufacturers. The creators of KMI had originally been active in a catering company, where they observed that most of their clients preferred cheaper, typically foreign products to high quality Hungarian ones. Therefore we decided to found an organization that would coordinate Hungarian handicraft food producers and popularize Hungarian handicraft products in the food trade as well as in catering.

WE DECIDED TO FOUND AN ORGANIZATION THAT WOULD COORDINATE HUNGARIAN HANDICRAFT FOOD PRODUCERS AND POPULARIZE HUNGARIAN HANDICRAFT PRODUCTS

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How about the hotel industry? A: One the great prides of our company is the four−star Four Points by Sheraton hotel we have recently developed and constructed in Kecskemét. This hotel is run by KÉSZ, and it is connected to various other enterprises of the company in that city. This is a direct continuation of KÉSZ real estate development activities, which began about 15 years ago. The first great commission was the construction of the refrigerator factory at Jászárokszállás. Tiszalök prison, Kiskunfélegyháza sports stadium, and the new complex of the Szombathely university were all constructed in a PPP framework.

PPP construction has acquired a rather negative connotation in Hungary, as the current government considers it the hotbed of corruption. Within KÉSZ’ total turnover, how big is the proportion of state commissions? A: The consolidated income of KÉSZ’ various companies is about HUF 70 billion. Some 4−5% of that comes from state commissions. The core activity of KÉSZ is the construction industry, which produces 55−60% of the company’s annual income. The manufacturing of construction materials brings HUF 6−8

Budapest Business Journal | May 09 – May 22

bln, and the rest of the annual income is divided among the other, non− construction profiles.

In what form do you pursue your construction profile? Are you usually the main contractor? A: In most cases, yes, we are the main contractors. In addition, we provide engineering and planning services as well. At the execution stage then, KÉSZ’ other groups join in as well as subcontractors. As subcontractors, however, they have to compete for commissions just like all the other companies that are not related to KÉSZ. Our machine engineering (mechanical) and (electrical) divisions are highly competitive.

In the profession, the steel structure manufacturing plant of KÉSZ has a legendary reputation. A: Indeed, we are one of the best and greatest in this field in all of Central Europe. Our manufacturing capacity is 15,000 tons of steel structures annually. We export products to the whole world from Africa to South America.

That involves your profile as construction material manufacturers. KÉSZ is,

however, also very successful abroad as a construction company, isn’t it? A: Indeed, besides the manufacturing of special steel structures, we have a strong reputation in construction, especially of industrial buildings. We have been active abroad since 2011. Our first two subsidiaries registered abroad were our companies in Ukraine and Romania. In Ukraine, we constructed a 60,000 sqm chocolate factory. Since those beginnings, we have also started up a subsidiary in Serbia, where we constructed a pudding powder plant for Dr. Oetker. In Russia, our subsidiary has recently acted as

main contractor in the construction of the Magna automotive parts factory. In Belarus too, we participate in logistics enterprises; besides which, we have won the competition for the construction of the Belarusian embassy building in Budapest.

What kind of financial background is behind KÉSZ for such enterprises? A: The bank pool handling our financial affairs is made up of two banks. The KÉSZ group provides the financial guarantee for the construction enterprises.

TROPHY PROJECTS OF KÉSZ HOLDING 1. Reconstruction of Kossuth tér, Budapest 2. Total reconstruction of Ferenc Liszt International Airport, including the construction of the new terminal SkyCourt 3. General construction of LEGO’s new factory in Nyíregyháza 4. General construction of the Daimler paint shop in Kecskemét

EXPERT OPINION

COMPLEX DESIGN-AND-BUILD SOLUTIONS FOR THE REDEFINED OFFICE SPACE DVM group responds to the changing culture of work The paradigm shift in the way we think about concepts such as the workspace, internal collaboration, information sharing, successful organizational cultures, efficient operations, caring client relations, and employee satisfaction also manifest themselves in our new expectations about the office environment, and the creation of it. The ideal time to respond to these organizational and operational challenges is when a company moves to a new office building, or redesigns its existing space to accommodate the newly defined needs of human resources, finance, communications and operations. With an increased demand for transparency and accessibility, recent decades have brought about the open space office environment as the norm, but the concept of activity-based work with unassigned hot desks, impromptu meeting areas, lounges and silent rooms is a quite recent phenomenon in Hungarian offices. DVM group has been working closely with various types of organizations and corporations to create the ideal space for their specific requirements, and has applied this mindset in the majority of the spaces it has created. Going beyond strictly defined design and fit-out works, DVM offers a complex solution for multifaceted technical, logistical, security and organizational challenges. The DVM portfolio combines a set of integrated services ranging from design, project management, environmental consultancy and construction management to general construction and development management, making the company the ideal partner in diverse projects. Recent references - representing the full scale from historic preservation to re-conceptualized modern workspaces - include the innovative Vodafone Butterfly project, the redesigned Lexmark offices, the colorful and sustainable Keler and JTI offices, the complete reconstruction of the historic Bank of China headquarters, as well as the development of the prestigious Eiffel Palace office building in downtown Budapest and the new, iconic building of the U.S. Embassy in Hungary.

NOTE: ALL ARTICLES MARKED E XPERT OPINION ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

www.dvmgroup.com

WWW.BBJ.HU

Budapest Business Journal | May 09 – May 22

GET INSPIRED BY YOUR OFFICE In the 1990s, the big shift in office interior design revolved around ideas of how to create more workstations relative to office space. “That revolution was quantitative in nature, whereas the current shift is qualitative,” says Wouter Oosting, Senior Director of Workplace Design summed up the results of the workplace ergonomy project run by CBRE in The Netherlands . The new catchwords are ‘inspiring’, ‘cooperating’, and ‘sustainably productivity’. ANDRÁS ZSÁMBOKI

In the Amsterdam headquarters of CBRE one can see several weird pieces of furniture. An employee sitting in one of the strange armchairs is explaining something vehemently to a client. Then, as if he was making mischief, he turns around on the armchair and hangs his legs out under its arm. But look! The armchair was designed exactly for this! There is a keyboard on the arm of the chair, and the employee can use that keyboard to run the PowerPoint presentation he projects onto the wall of the office. As if employees were sitting in a bar, they sit on bar stool−like chairs along a bar−like desk; the person on the other side of the bar, however, is not the barman but the presentation giver. In the corner of the sound−insulated lounge one of the office workers is staring at an

iPad in her lap. Even though she looks relaxed, she is drawing sketches on the tablet computer.

5 MISCONCEPTIONS ABOUT NEW WAYS OF WORKING

1 2 3 4 5

I’m expected to work day and night. NOT TRUE! Work and private life blend into each other; however, that provides space to find your own balance. You can tailor your time management rules to yourself. I never see my colleagues nowadays. NOT TRUE! In fact, New Ways of Working are all about meeting and working together. New departments are specific zones that make it easy for colleagues to find each other. I’m not allowed print anything. NOT TRUE! Paper does not obstruct a flexible concept. Relocating is an excellent opportunity to rationalize the filing system. I will have to sit somewhere else every day. NOT TRUE! If an employee prefers to use the same workstation, often that is not a problem. However, office people are stimulated to choose a workstation that matches their activities. The added value of New Ways of Working cannot be shown. HARD TO PROVE. Through the use of measurements and surveys it is possible to enhance employee satisfaction and improve occupancy rates.

The fresh most office ergonomics trend has been triggered by the spread of mobile office equipment, which makes it possible for employees to work from any location. “In my experience, not being bound to space also means not being bound to time constraints. I can work from home and I can work at night if I

wish. Self−exploitation can be limitless,” Adrienne Konthur, head of CBRE’s Hungarian office, remarks with a degree of self−irony. “Rules of how we organize work for ourselves have become very important. The old type of workplace was determined by a fixed set of conditions which were quite limiting from the

THEY PRACTICE WHAT THEY PREACH

In 2012, CBRE in The Netherlands opened its new headquarters in Amsterdam. As one of the leading Dutch workplace consultancies, the stakes were high. “We wanted to show what state-of-theart business premises look like,” Saskia Boon, Senior Workplace Ergonomist explained to the Budapest Business Journal. “We carefully planned each step of the process to achieve an attractive working environment supporting our integrated business model in a sustainable and cost-effective way. “After two years the balance sheet is clearly positive. Our overall housing costs were reduced by 18%. The figures speak for themselves: Rent - 13%; Security - 84% ; Printing costs - 48%; Office cleaning - 30%; Office supplies - 21%; Other office expenses - 5%. Our flexible workplace concept welcomes internal organization changes. Besides the merger with SCM Europe, no internal movements were necessary in 2012.”

WWW.BBJ.HU

Budapest Business Journal | May 09 – May 22

EXPERT OPINION

Sándor Habóczky Partner, Head of Real Estate SCHÖNHERR HETÉNYI ATTORNEYS AT LAW

New stories of the Budapest construction scene may no longer be written with pen and paper. The overall reform of building regulations last year introduced fully electronic administration of building matters and the mandatory use of electronic construction logs. Modern, IT-based solutions have been put in place to increase flexibility, transparency, and authority control across the entire construction process.

point of office workers, while the new type of work environment is flexible and facilitates employees’ efficient self− organizing,” she added. The same lesson can be drawn from the recent history of office ergonomics studies. “In the 1990s, an office revolution was brought about by PCs. That technical transformation of the work environment was reflected by the spread of open plan offices,” Konthur reminisced. “Employers were happy because employees could be seated in a more concentrated way: with filing cabinets and other space−consuming objects gone, more work stations could be crammed into a given office space.” Later efficiency surveys, however, did not justify the initial optimism. Studies conducted in the 2000s showed that computerized personal workstations in the offices were only used in 40% of working hours. “Employees were often away from their desks attending meetings, taking breaks, or doing external errands,” Konthur explained. It became glaringly obvious that the aim should not be further increases of workstations per square meter, but a better utilization of the existing work area. It seemed like a more advanced solution to give up the idea of personal desks, and use work stations on a time−share system. That second shift has been facilitated by the spread of mobile office equipment such as notebooks and smart phones.

An additional reason for the recent transformation of the office space is today’s increasingly refined concept of teamwork. “In classical corporate culture, there used to be giant divisions, huge departments and sub−departments. In modern company management, these hierarchies have been gradually flattened out. First, employees began to work in matrixes rather than in hierarchically organized pyramids. Today, they tend to work in multidimensional networks, in which there are no real bosses any more but key people who function as the nodal points of elaborate systems. From the point of view of the office, this requires a new type of office space that can be flexibly transformed all the time according to changing needs.” Multifunctional office furniture, separable office sections, and mobile office equipment can all help achieve this goal. “And, of course, office workers need to become more mobile, too: they need to accept the idea of changing desks if that is what the next work stage requires,” Konthur explained. “As the head of CBRE’s Hungarian unit, I have long ceased to have an office of my own. However, I definitely needed to get used to having to move my personal stuff from one corner of the office to another, or letting my favorite meeting corner be used by one of my subordinates just because he or she needed it more. At the beginning, this kind of adaptation was not easy – but it is in fact very useful.”

roperty developers have long been urging for an increase in the transparency, credibility, and predictability of the licensing procedure in the Hungarian building sector. Getting building licenses has traditionally been a burdensome and time-consuming process, specifically regarding the necessity of numerous sub-authority approvals, such as the consent of the environmental authorities, monument protection authorities, and numerous other special bodies. As extreme bureaucracy hindered many projects through the years, the legislator appears to have realized the key importance to reflect on developer initiatives; a set of new building regulation rules, many technical, was put in place with new regulations. Coming into effect via consecutive governmental decrees, the so-called National Building Registry (the “Registry”) has been established. The Registry represents a breakthrough, fully IT-based, comprehensive and consolidated, up-todate, and authentic central system of electronic applications, data, and documents for all kinds of building activities and construction licensing matters. The Electronic Documentation System (EDS), a major application supporting the Registry, was introduced to implement the e-administration of building licensing proceedings, e.g. electronic submission of petitions and plans, adoption of authority resolutions and communication between authorities and applicants. A further inter-active sub-system of the Registry, also communicating with the EDS, is a regulated electronic construction log (e-log) application; with a few exceptions for certain building types, an e-log has been compulsory for all construction projects started after October 1, 2013. The e-log is now functioning as an electronic application available for users

with password protected client port registration through the National Building Registry subpage of the dedicated webpage (www-e-epites.hu). The e-log is put in standby mode (i.e. “switched on”) upon the relevant request by the property owner/developer. An actual e-log application is then activated and opened upon the takeover of the building site by the building contractor. Unlike in the past, a single e-log record is associated with each construction project, irrespective of the number of associated contractual documents and the number of contractors. A so-called ‘main log’ section is opened and kept up-to-date by the general contractor in charge, while individual ‘sub-logs’ are kept by each of the sub-contractors. The main log and the sub-logs are further articulated to virtual title pages, registry parts, and summary sheets, as well as associated disclosures, such as: authority notes, fulfillment verification log, subcontractor registry, etc. All e-log chapters remain opened until the contractor leaves the building site post-completion. Access and insight may also be possible for, among others, the building authorities, the tax authority, the property owner/developer and his proxies, the building technical supervisor, and the designer instructor. Closed logs in the National Building Register remain available for subsequent authority surveys, such as to compare the planned, licensed, and realized status of the building. Although the real usefulness and effectiveness of the new building regulations are disputed, the technical background and conditions of the authority licensing procedures have certainly improved. By means of an e-log, the construction project and its participants’ notes will be easier to follow and overlook. Any deviation from original construction drawings and developer instructions, any defaults or additional works, as well as any other circumstances that may affect financial settlement or allocation of responsibility will be much easier to identify and referred to later. Practice will tell later whether the communicated goals of remote access and easy handling, decrease of bureaucracy and of chain debts of construction entrepreneurs, as well as the increase in transparency, authenticity and clarity are in fact reached, and whether all these really support a quicker licensing process and a more flexible implementation of construction projects in line with investors’ true interests.

www.schoenherr.eu

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

SEVERAL BENEFITS WITH THE ELECTRONIC CONSTRUCTION LOG

WWW.BBJ.HU

20 3

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

Category A office buildings in greater Budapest

DUNA TOWER OFFICE BUILDING www.celand.hu

DOROTTYA UDVAR

IP WEST

www.dorottya.net

www.ipwest.iroda.hu

BSR CENTER OFFICE 11 BUILDING www.bsr.hu

NĂ&#x2030;PLIGET CENTER www.nepliget-center.com

PARK Ă TRIUM

Âť

73 3

19 609

12.50â&#x20AC;&#x201C;13.5 1,100 HUF

Albemarle, KCI, Ferrero, First Clients

,PPRĂ&#x20AC;QDQ] *URXS

Cushman and :DNHĂ&#x20AC;HOG '7=

JLL, www.jll.hu, Robertson, www. robertson.hu

Avestus Real Estate, www.avestusrealestate.com

â&#x20AC;&#x201C; ,PPRĂ&#x20AC;QDQ] *URXS

1096 Budapest, SoroksĂĄri Ăşt 32â&#x20AC;&#x201C;34. (1) 451-8040 (1) 451-8041 J NRR#LPPRĂ&#x20AC;QDQ] FRP

â&#x20AC;&#x201C; (100)

1133 Budapest, VĂĄci Ăşt 76. (1) 501-2800 (1) 501-2801 RIĂ&#x20AC;FH#FDLPPR KX

Âť Âť

1134 Budapest, VĂĄci Ăşt 45. (1) 451-8040 (1) 236-0435 RIĂ&#x20AC;FHVBKX#LPPRĂ&#x20AC;QDQ] com

â&#x20AC;&#x201C; (100)

1054 Budapest, 6]DEDGViJ WpU (1) 302-9010 (1) 302-9020 info@bankcenter.hu

Âť Âť

1051 Budapest, 6]pFKHQ\L ,VWYiQ WpU Â˛ (1) 801-0155 â&#x20AC;&#x201C; â&#x20AC;&#x201C;

â&#x20AC;&#x201C; PBW Real Estate Fund (AEW Europe) (100)

1132 Budapest, VĂĄci Ăşt 20â&#x20AC;&#x201C;26. (1) 799-3120 (1) 799-3121 webc@aeweurope.com 1138 Budapest, 1pSIÂ UGĹ&#x192; XWFD (1) 785-4985 (1) 799-8879 info@celand.hu

INDEPENDENT POWER SUPPLY

Âť

BICYCLE PARKING

12â&#x20AC;&#x201C;13 1,000 HUF

WASTE RECYCLING

15 600

NATURAL LIGHT AND AIR VENTILLATION

400 5

Âť

12.50 3.24

Âť

161 3

17 480

16â&#x20AC;&#x201C;20 4.20

Citibank, Regus, Weil, Hays Hungary, Ferrari Budapest

Âť

130 3

Âť Âť

Âť

â&#x20AC;&#x201C;

215 5

12 399

13â&#x20AC;&#x201C;.95 1,240 HUF

Diageo, Ernst & Young, Sara Lee, FHB, Tower International, IFS Hungary, Duna $V]IDOW ,7 &LQHPD

JLL, www.jll.hu, Cushman & WakeĂ&#x20AC;HOG ZZZ FXVKZDNH com

27,600 46,000

55 3

10 383

11â&#x20AC;&#x201C;14 3.60

â&#x20AC;&#x201C; (100)

27,050 28,846

150 3

2+2+2 538

Âť

26,500 30,100

60â&#x20AC;&#x201C;3000 3

29,000

www.westendbusinesscenter.hu

1138 Budapest, DunavirĂĄg utca 2-6. (1) 225-6600 (1) 225-6601 ablon@ablon.hu

418

ROOSEVELT 7/8

â&#x20AC;&#x201C; CPI (100)

375 3

www.bankcenter.hu

WEST END BUSINESS CENTER

JLL, www.jll.hu, Cushman & :DNHĂ&#x20AC;HOG www.cushwake.com

ADDRESS PHONE FAX EMAIL

Âť

30,041 54,184

www.roosevelt-budapest. com

LEASING AGENT, NAME, WEBSITE

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

BANK BRANCH/ATM

BANK CENTER

www.atriumpark.hu

IN-HOUSE FACILITY MANAGEMENT

Ă TRIUM PARK

SUITABLE FOR DISABLED PEOPLE

31,200

Magyar Posta, AON, Orange, Tesco, Samsung

GREEN ENVIRONMENT

www.capitalsquare.hu

32,000 38,000

12 1,100 HUF

24-HOUR RECEPTION AND SECURITY SERVICES

CAPITAL SQUARE

10 422

WELLNESS AND SPORT SERVICES

Âť

329 3â&#x20AC;&#x201C;5

SERVICES

RESTAURANT, CAFĂ&#x2030;

www.hallergardens.hu

32,500

CURRENT MAIN TENANTS

HALLER GARDENS

AVERAGE MONTHLY RENT ON APRIL 1, 2014 (EURO/SQM) AVERAGE MONTHLY SERVICE CHARGE ON APRIL 1, 2014 (EURO/SQM)

www.gatewaybc.hu, www.ablon-group.com

35,900 50,800

NO. OF ELEVATORS NO. OF PARKING SPACES

GATEWAY OFFICE PARK

MINIMUM LEASABLE OFFICE SIZE (SQM) MINIMUM LEASE TERMS (YEARS)

COMPANY WEBSITE

GREEN TECHNOLOGIES

NO. OF LEVELS

RANK

NET OFFICE SPACE (SQM) TOTAL GROSS SIZE OF BUILDING (SQM)

Ranked by net office space

Âť

28,045 43,000

26,000

Âť

26,000

Âť

26,000

Âť

Âť Âť Âť Âť

Âť

CE Land Holding ,QJDWODQKDV]QRVtWy Kft., www.celand.hu

3.90

Âť

CBRE Kft, www. cbre.hu, Cushman :DNHĂ&#x20AC;HOG ZZZ FXVKPDQZDNHĂ&#x20AC;HOG hu.com

Âť Âť

1113 Budapest, Bocskai Ăşt 134â&#x20AC;&#x201C;146. (1) 888-0395 (1) 888-0399 YHUD ]ROWDQ#HX MOO FRP

10 385

11 990 HUF

Evosoft, British Telecom, Dalkia

CA IMMO

â&#x20AC;&#x201C; (100)

1117 Budapest, Budafoki Ăşt 91â&#x20AC;&#x201C;93. (1) 501-2800 (1) 501-2801 RIĂ&#x20AC;FH#FDLPPR KX

Âť

250 3

Âť Âť

Âť

â&#x20AC;&#x201C;

Âť Âť

1138 Budapest, VĂĄci Ăşt 135â&#x20AC;&#x201C;139. (1) 350-4010 (1) 350-4011 info@bsr.hu

Âť

200 3

Âť Âť

Âť

â&#x20AC;&#x201C;

Âť Âť

1097 Budapest, KĂśnyves KĂĄlmĂĄn kĂśrĂşt 11. (1) 302-9010 (1) 473-1210 â&#x20AC;&#x201C;

Âť

150 3

Âť Âť

Âť

â&#x20AC;&#x201C;

Âť Âť Âť Âť

Âť

Âť Âť

Âť

â&#x20AC;&#x201C;

â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1134 Budapest, VĂĄci Ăşt 80â&#x20AC;&#x201C;84. (1) 473-1209 (1) 473-1210 LQIR#KRUL]RQGHYHORSPHQW KX

12 1,085 HUF

Vodafone, Citibank, Bank of China, &RJQL]DQW

JLL Kft., www. joneslanglasalle. hu, Cushman & :DNHĂ&#x20AC;HOG www.cushmanwakeĂ&#x20AC;HOG KX FRP

â&#x20AC;&#x201C; CPI (100)

1087 Budapest, HungĂĄria kĂśrĂşt 40â&#x20AC;&#x201C;44. (1) 225-6600 (1) 225-6601 ablon@ablon.hu

Âť Âť

1068 Budapest, 'y]VD *\|UJ\ ~W % (80) 300-500

Âť Âť

PROMENADE GARDENS www.promenadegardens.hu 25,000

Âť

ARENA CORNER 15 www.arena-corner.hu, www.ablon-group.com

24,200 29,500

Âť

90 3

12 370

WWW.BBJ.HU

www.citygate.iroda.hu

10 407

12â&#x20AC;&#x201C;13 1,200 HUF

22,700 26,200

350 5

12 410

12.95â&#x20AC;&#x201C;13.5 3.50

Âť

22,000 25,000

659 5

WRZHU 440

13.75 4.19â&#x20AC;&#x201C;4.27

Âť

â&#x20AC;&#x201C;

20,500 25,700

250 3

9 395

12.75â&#x20AC;&#x201C;13.5 1,380 HUF

Medicover, Concorde, Bols

'7= ZZZ GW] FRP hungary, CBRE, www.cbre.hu

NSN, IBM

â&#x20AC;&#x201C; (100)

1092 Budapest, .|]WHOHN XWFD (1) 501-2800 (1) 501-2801 RIĂ&#x20AC;FH#FDLPPR KX

â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1133 Budapest, VĂĄci Ăşt 96â&#x20AC;&#x201C;98. (1) 382-9100 (1) 382-9129 leasing@skanska.hu

(100) â&#x20AC;&#x201C;

1082 Budapest, )XWy XWFD (1) 266-2181 (1) 688-5498 RIĂ&#x20AC;FH#IXWXUHDO KX

â&#x20AC;&#x201C; Heitman (100)

1123 Budapest, AlkotĂĄs utca 48â&#x20AC;&#x201C;50. (1) 382-5100 (1) 382-5101 hungary@aiglincoln.com

Terrapark Kft, www.terrapark.hu

â&#x20AC;&#x201C; 7HUUDĂ&#x20AC;QDQ] *PE+

2040 BudaĂśrs, /LJHW XWFD (23) 423-323 (23) 423-324 info@terrapark.hu

barbara.barath@ VLPPRDJ KX ]ROWDQ fabian@simmoag.hu

â&#x20AC;&#x201C; (100)

1134 Budapest, VĂĄci Ăşt 35. (1) 429-5050 (1) 429-5055 RIĂ&#x20AC;FH#VLPPRDJ KX

Cushman & :DNHĂ&#x20AC;HOG ZZZ FXVKPDQZDNHĂ&#x20AC;HOG hu.com, CBRE, cbrebudapest@cbre. com

7UL*UDQLW Development Corporation (26) Heitman European Property Partners IV (74)

1093 Budapest, Lechner Ă&#x2013;dĂśn fasor 6. (1) 374-5696 (1) 374-5668 scsikos@trigranit.com

Eston, katalin.csokas@ eston.hu

â&#x20AC;&#x201C; (100)

1074 Budapest, 5iNyF]L ~W Â˛ (1) 501-2800 (1) 501-2801 RIĂ&#x20AC;FH#FDLPPR KX

JLL, www.jll.hu, Cushman & :DNHĂ&#x20AC;HOG www.cushwake.com

â&#x20AC;&#x201C; PBW Real Estate Fund (AEW Europe) (100)

1123 Budapest, AlkotĂĄs utca 53. (1) 799-3120 (1) 799-3121 mompark@aeweurope.com

â&#x20AC;&#x201C; ,9* )XQGV (100)

1117 Budapest, *iERU 'pQHV XWFD (1) 382-7560 (1) 382-7570 RIĂ&#x20AC;FH#LYJ HXURSH FRP

â&#x20AC;&#x201C; Europa Fund II (100)

1062 Budapest, 7HUp] N|U~W Â˛ (1) 225-0912 (1) 375-0445 RIĂ&#x20AC;FH#FRQYHUJHQ FH FRP

*57 *URXS (100) â&#x20AC;&#x201C;

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIĂ&#x20AC;FHJDUGHQ KX

(100) â&#x20AC;&#x201C;

1082 Budapest, )XWy XWFD Â˛ (1) 266-2181 (1) 688-5498 RIĂ&#x20AC;FH#IXWXUHDO KX

â&#x20AC;&#x201C; (100)

1123 Budapest, Nagyenyed utca 8â&#x20AC;&#x201C;14. (1) 268-1288 (1) 268-1289 info.budapest@ eur.cushwake.com

Âť

CA IMMO

INDEPENDENT POWER SUPPLY

1088 Budapest, 5iNyF]L ~W Â˛ (1) 235-7770 (1) 235-7767 â&#x20AC;&#x201C;

BICYCLE PARKING

Âť Âť

LEASING AGENT, NAME, WEBSITE

WASTE RECYCLING

ADDRESS PHONE FAX EMAIL

BANK BRANCH/ATM

IN-HOUSE FACILITY MANAGEMENT

SUITABLE FOR DISABLED PEOPLE

GREEN ENVIRONMENT

24-HOUR RECEPTION AND SECURITY SERVICES

WELLNESS AND SPORT SERVICES

RESTAURANT, CAFĂ&#x2030;

CURRENT MAIN TENANTS

Âť

NATURAL LIGHT AND AIR VENTILLATION

157 3

22,800 25,000

MINIMUM LEASABLE OFFICE SIZE (SQM) MINIMUM LEASE TERMS (YEARS)

10â&#x20AC;&#x201C;13 1,347 HUF

NO. OF LEVELS

Âť

3+2 200

23,000 33,000

SERVICES

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

CITY GATE 17

AVERAGE MONTHLY RENT ON APRIL 1, 2014 (EURO/SQM) AVERAGE MONTHLY SERVICE CHARGE ON APRIL 1, 2014 (EURO/SQM)

ZZZ HDVW ZHVW LURGDKD] LQIR

GREEN TECHNOLOGIES

NO. OF ELEVATORS NO. OF PARKING SPACES

EAST-WEST BUSINESS 16 CENTER

NET OFFICE SPACE (SQM) TOTAL GROSS SIZE OF BUILDING (SQM)

RANK

COMPANY WEBSITE

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

NORDIC LIGHT www.skanska.hu 18

CORVIN TOWERS

ALKOTĂ S POINT

www.futureal.hu

www.alkotaspoint.hu

TERRAPARK C, D TĂ&#x2013;MB www.terrapark.hu

19,869 21,280

15 1â&#x20AC;&#x201C;3

13 529

6â&#x20AC;&#x201C;9 3

S & T Consulting, Ricoh Hungary, *') 6XH] :HOW *RRG0LOOV Flaga, Partner in Pet Food, Bioderma, EDCO

19,487 20,681

300 3

11 352

12.50 3.65

Citibank, Digi Kft., Fitness Trade Kft.

RIVER ESTATES OFFICE BUILDING 22

www.simmoag.hu

MILLENNIUM TOWER II www.millenniumcity.hu

R70 OFFICE COMPLEX 24 www.r70.iroda.hu

19,000 23,000

18,700 19,000

MOM PARK OFFICES 25

18,638 48,000

INFOPARK BUILDING D 26

18,526

ZZZ PRPSDUNRIĂ&#x20AC;FH KX

www.infopark.hu

Âť

8+underground

250 5

Âť

12.50â&#x20AC;&#x201C; 13.75 3.95

156 3

9 450

11â&#x20AC;&#x201C;12 1,100 HUF

Keler, Develor

170 5

12 468

12.50â&#x20AC;&#x201C;14 1,350 HUF

3Ă&#x20AC;]HU <RXQ & Rubicam, *URXS0 %RQLWiV UPM-Kymmene, PortfoLion, BNP Paribas Real Estate, IVECO, Thales

200 3

7 347

12â&#x20AC;&#x201C;.75 3.20

675$%$* =UW Lufthansa Systems, Pannontej Cetelem Bank, Medicover, Dealogic, AXN Hungary, Mastercard, 7(6&2 *UXQGIRV (6$% *LYDXGDQ Costa

EIFFEL SQUARE www.eiffelsquare.com 27

18,500 23,500

OFFICE GARDEN III 27

18,500

CORVIN ONE 29

18,000 20,000

ZZZ RIĂ&#x20AC;FHJDUGHQ KX

www.futureal.hu

KRISZTINA PALACE ZZZ NULV]WLQDSDODFH KX

Âť

18,000 22,600

Âť

250 5

10 350

20 4

18,500 5

Âť Âť

12.50 960 HUF

â&#x20AC;&#x201C;

188 5

6 342

13.50 3.92

Epam, Futureal, DAS

250 5

7 399

12.75â&#x20AC;&#x201C; 13.50 3.59

Johnson&Johnson, *UDQLW $JULFXOWXUH Deutsche Leasing, Depo 814 restaurant

,9* ZZZ LYJ KX

ConvergenCE, www.convergen-ce. com

Robertson Hungary, www.robertson.hu

â&#x20AC;&#x201C;

Cushman & :DNHĂ&#x20AC;HOG

WWW.BBJ.HU

5 346

7.5â&#x20AC;&#x201C;8 1,150 HUF

Credit Express, Interticket, *URXSDPD Ă&#x2013;ko-Pannon

400 3

6 254

11â&#x20AC;&#x201C;13 3.70

*HWURQLFV Hervis,Oberbank

100 3

8 245

9â&#x20AC;&#x201C;11 3.50

DuPont, Tchibo, Johnson Diversey, Invitel, TOTAL, Coca-Cola Hellenic, Carlsberg

360 3

5 406

12â&#x20AC;&#x201C;.5 1,100 HUF

HP, Novartis

CA IMMO

300 5

8 266

11.90â&#x20AC;&#x201C;12.9 2.90

Lufthansa 6\VWHPV (,7 ,9*

JLL, www.jll.hu

168 5

6 252

12.95â&#x20AC;&#x201C;13.5 2.80

$YLV %XGJHW *URXS ABB, MSCI, Deichmann, Innovative Dental Care

6 310

12.50 960 HUF

Shell, TATA Consultancy, Syngenta, Pirelli

WELLNESS AND SPORT SERVICES

24-HOUR RECEPTION AND SECURITY SERVICES

GREEN ENVIRONMENT

SUITABLE FOR DISABLED PEOPLE

IN-HOUSE FACILITY MANAGEMENT

BANK BRANCH/ATM

Cushman & WakeĂ&#x20AC;HOG ZZZ FXVKPDQZDNHĂ&#x20AC;HOG KX FRP JLL Kft., www.jll.hu

Cushman & WakeĂ&#x20AC;HOG ZZZ FXVKZDNH com

Cushman & :DNHĂ&#x20AC;HOG ZZZ FXVKPDQZDNHĂ&#x20AC;HOG hu.com

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

RESTAURANT, CAFĂ&#x2030;

INDEPENDENT POWER SUPPLY

CURRENT MAIN TENANTS

100 3

BICYCLE PARKING

AVERAGE MONTHLY RENT ON APRIL 1, 2014 (EURO/SQM) AVERAGE MONTHLY SERVICE CHARGE ON APRIL 1, 2014 (EURO/SQM)

LEASING AGENT, NAME, WEBSITE

WASTE RECYCLING

NO. OF ELEVATORS NO. OF PARKING SPACES

18,000 20,000

SERVICES

NATURAL LIGHT AND AIR VENTILLATION

MINIMUM LEASABLE OFFICE SIZE (SQM) MINIMUM LEASE TERMS (YEARS)

M3 BUSINESS CENTER 29 www.m3bc.hu, www.ablon-group.com

GREEN TECHNOLOGIES

NO. OF LEVELS

COMPANY WEBSITE

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

NET OFFICE SPACE (SQM) TOTAL GROSS SIZE OF BUILDING (SQM)

RANK

22 3

ADDRESS PHONE FAX EMAIL

â&#x20AC;&#x201C; CPI (100)

1146 Budapest, HungĂĄria kĂśrĂşt 179â&#x20AC;&#x201C;187. (1) 225-6600 (1) 225-6601 ablon@ablon.hu

â&#x20AC;&#x201C; JP Morgan Asset Management (100)

1027 Budapest, Henger utca 2. (1) 225-0912 (1) 375-0445 info@margitpalace.com

â&#x20AC;&#x201C; JP Morgan (100)

2040 BudaĂśrs, PuskĂĄs Tivadar utca (1) 225-0912 (1) 375-0445 RIĂ&#x20AC;FH#FRQYHUJHQ FH FRP

â&#x20AC;&#x201C; (100)

1114 Budapest, %DUWyN %pOD ~W Â˛ (1) 501-2800 (1) 501-2801 RIĂ&#x20AC;FH#FDLPPR KX

â&#x20AC;&#x201C; Bluehouse Capital (100)

1117 Budapest, 1HXPDQQ -iQRV XWFD ( (1) 382-7560 (1) 382-7570 RIĂ&#x20AC;FH#LYJ HXURSH FRP

â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1134 Budapest, KassĂĄk Lajos utca 19â&#x20AC;&#x201C;25. (1) 382-9100 (1) 382-9129 leasing@skanska.hu 1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIĂ&#x20AC;FHJDUGHQ KX

MARGIT PALACE OFFICE BUILDING www.margitpalace.com 17,138

Âť

TERRAPARK NEXT B www.terraparknext.com 33

17,042 20,055

BARTĂ&#x201C;K HOUSE 34

ZZZ EDUWRNKD] LURGD KX

17,000 30,000

INFOPARK BUILDING E

17,000

34 www.infopark.hu, www.ivg.hu

Âť

GREEN HOUSE www.skanska.hu

16,800 17,800

OFFICE GARDEN II 36

16,800 27,000

120 5

16,000 23,800

140 3

4 177

10.50 2.90

Âť

16,000 17,400

300 5

6â&#x20AC;&#x201C;9

Âť

12â&#x20AC;&#x201C;13 3

Âť

15,751 17,200

3â&#x20AC;&#x201C;8

15 1

2â&#x20AC;&#x201C;3 393

9 4.50

*HQHUDO 0RWRUV Tesa Tape, Kaiser & Kraft

15,700 28,685

2,000 3â&#x20AC;&#x201C;5

4+2 440

13.50â&#x20AC;&#x201C;16 3.80

Âť

130 5

6 350

11.50â&#x20AC;&#x201C;12.5 3.80

BME Infokom, Phillips, HP, Sio-Eckes, Vamsoft

7+5 underground

330 5

6 246

18 3.30

14,370 27,000

8+underground

200 3

6 280

11 3.50

Adidas, Xapt, Montana, QualySoft, Helly Hansen, Tupperware

14,120 18,452

10+underground

250 3

8 287

12.50 3.90

Vodafone, Boehringer Ingelheim

ZZZ RIĂ&#x20AC;FHJDUGHQ KX

BUSINESS CENTER 140

VĂ CI GREENS

www.joneslanglasalle.hu

www.vacigreens.hu

BUDAĂ&#x2013;RS OFFICE 40 PARK

www.ablon-group.com, www.orcobusinesspark.hu

LOMB BUSINESS 41 CENTER www.ablon-group.com

OFFICE GARDEN I 42

ZZZ RIĂ&#x20AC;FHJDUGHQ KX

15,000 26,000

Âť

Robertson, www. robertson.hu

*57 *URXS (100) â&#x20AC;&#x201C;

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1138 Budapest, VĂĄci Ăşt 140. (1) 268-1288 (1) 268-1289 reception-hungary@eu.jll.hu

Cushman & :DNHĂ&#x20AC;HOG ZZZ FXVKPDQZDNHĂ&#x20AC;HOG hu.com

â&#x20AC;&#x201C; ATENOR *URXS

1138 Budapest, VĂĄci Ăşt 117â&#x20AC;&#x201C;119. (1) 785-5208 (1) 782-7591 borbely@atenor.hu

JLL, www.jll.hu

â&#x20AC;&#x201C; CPI (100)

2040 BudaĂśrs, 6]DEDGViJ ~W (1) 225-6600 (1) 225-6601 ablon@ablon.hu

â&#x20AC;&#x201C;

â&#x20AC;&#x201C; CPI (100)

1139 Budapest, VĂĄci Ăşt 99. (1) 225-6600 (1) 225-6601 ablon@ablon.hu

â&#x20AC;&#x201C; Heitman (100)

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIĂ&#x20AC;FHJDUGHQ KX

Robertson, www.robertson.hu

3Z& 0DJ\DURUV]iJ .Ĺ&#x192;YiUL 7HUFViN Dentons, BCCH, BBC

â&#x20AC;&#x201C;

â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1055 Budapest, %DMFV\ =VLOLQV]N\ ~W (1) 473-1209 (1) 473-1210 LQIR#KRUL]RQGHYHORSPHQW KX

â&#x20AC;&#x201C;

(100) â&#x20AC;&#x201C;

1118 Budapest, 5pWN|] XWFD (1) 309-0909 (1) 309-0900 info@budawest.net

Colliers International, www.colliers.hu, Eston International, www.eston.hu

7UL*UDQLW Holding (26) Heitman Hepp IV (74)

1095 Budapest, Lechner Ă&#x2013;dĂśn fasor 6. â&#x20AC;&#x201C; â&#x20AC;&#x201C; scsikos@trigranit.com

K1A ,QJDWODQNH]HOĹ&#x192; Kft. (100) â&#x20AC;&#x201C;

1103 Budapest, .Ĺ&#x192;pU XWFD $ (1) 392-4075 (1) 392-4081 EDOD]V V]HUGDKHO\L# immorent.com

EIFFEL PALACE www.eiffelpalace.hu 14,500

Âť

BUDAWEST OFFICE 44 BUILDING www.budawest.net

MILLENNIUM TOWER I www.millenniumtowers.hu

LAURUS OFFICES ZZZ ODXUXVRIĂ&#x20AC;FHV KX

13,973 27,000

120 3

8 247

10â&#x20AC;&#x201C;11 3.50

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Robertson, www.robertson.hu

WWW.BBJ.HU

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

24 3

WWW.BBJ.HU

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

WWW.BBJ.HU

Budapest Business Journal | May 09 – May 22

BBJ Research Markets in numbers

TUNE IN TO TOTAL FM Facility Management (FM) is headed in the direction of ‘Total FM’ where the range of services offered to tenants is stretched to the max. But only those who can strike the delicate balance between quality provision and revenue generation will stay on top. LEVENTE HÖRÖMPÖLI-TÓTH

Tenants on the office leasing market have true leverage when brokering conditions. Budapest, offering a total potential space of 3,172,400 square meters, leaves them plenty of choice. As stated in the report by the Budapest Research Forum, the vacancy rate, which was above 21% back in 2012, is still stuck at 18.4% and so further strengthens the customers’ position.

STORY HIGHLIGHTS ■

Facility managers are pushed by oversupply to offer an ever wider range of services ■ Long-term competitiveness relies on embracing new technologies and providing tailor-made solutions

the right level of FM the building cannot be marketed,” agreed László Tódika, head of facility management of TriGranit Management Corporation. “The trouble is, however, that even though high quality is demanded at all times customers are not always ready to pay for it.” Indeed, keeping costs low has become a very complex task. It presumes having knowledge whose scope goes well beyond technical matters. Oversight concerning energy management, work planning, property tax, or insurance issues are part of the equation as well. Certain cost fighting tactics usually work, though. “Identifying the exact level of services demanded should be step

HOT STUFF IN THE FM WORLD The sector’s players look ahead to major technology-based trends that are bound to set the pace for all those willing to play along. Cloud Computing Research data by AMI Partners suggests that SMEs will spend up to $100 million on cloud computing by 2014. The leading forms of building automation using the cloud are building management software (BMS) and active management analytics. Those eager to gain an edge should watch out for them. Biometric Systems It is no longer only border security where facial recognition can be used. FM is bound to follow suit en masse pretty soon, resulting in a more precise and environmentally friendly technology that provides a wide range of options from access control to identity documentation. BYOD Mobility The Bring-your-own-device hype seems to reach ever more workplaces, allowing for a doubling or tripling of the mobile workforce this year. Accordingly, companies are expected to respond to this trend by creating mobile policies that balance flexibility with confidentiality and the privacy requirements of the business. FM will be part of it.

“In the case of an office building, the property itself constitutes the core business. What is therefore required is staff with the right competences and a facility manager whose performance needs to be continuously assessed. Employees of FM companies already have these competences. They are trained and open to new technologies and innovative solutions; this is why they are able to support effectively the strategic decisions of building owners,” Gábor Décsi, Managing Director of Dome Facility Services Group Kft. told the Budapest Business Journal. JUGGLING WITH BUDGETS There is no doubt that facility management services are taken seriously by those using them, and adequate quality is therefore expected. “Without

one. Such FM efforts as environmental or energy awareness can be aligned with the policy or the internal processes of the customers,” Décsi pointed out. According to Tibor Ruzsinszki, regional chief at STRABAG Property and Facility Services Zrt, competitiveness revolves around three main issues that also have an impact on costs: sustainability, energy, and innovation. For green certificates apply no longer only to buildings, but also to FM firms; at the same time, rational energy use and finding the cheapest sources of energy supply can give an edge. “Mobile IT solutions, smart metering systems, social networks accelerating communication and information exchange are all altering the mentality, quality level, and cost structure of FM providers to a great deal,” Ruzsinszki said.

MANAGERS WITH A THOUSAND FACES The price war on the market cannot be ignored. “FM fees cannot be pushed down forever. Focus should be put not only on a single project, but rather an entire portfolio,” Tódika said. “If tenants get extra services they are happy to pay more.” And the list of those services is ballooning. Those running the properties are taking on ever more duties, giving way to the emergence of so−called ‘Total FM’. “This is where the market is headed. Workplace−related tasks are shifted to facility management, thus relieving customers in an ever more diverse manner,” Tódika added. The practical side of the coin is that separate teams no longer need to be set up by each customer to carry out different duties. Energy experts, interior

designers, or cleaning control personnel – safer in one hand, goes the shared wisdom. CREATE THAT VALUE Such multiple service contracts and the phenomenon of Business Process Outsourcing set the trend accordingly. The complexity of the partnership presupposes, however, that the parties think together in strategic terms and in the long run. “Customers also need to realize that competitiveness is not rooted in costs forced down by switching facility management companies on a one− or two−year basis, but in a cooperation based on professional confidence. Managers thus take responsibility, reduce risks to the minimum, understand customer goals and can provide tailor−made solutions. At the end of the day, the ‘execution− oriented’ approach is replaced by one focusing on value creation,” Décsi said.

The BBJ Research column reviews a given industry, gives a market round−up and analyzes the numbers behind the market tendencies. Our analysis is based on the latest edition of the Book of Lists. For the latest, updated figures, check out DigiBOL, the digital version of the Book of Lists. www.digibol.hu

WWW.BBJ.HU

26 3

Budapest Business Journal | May 09 â&#x20AC;&#x201C; May 22

Facility management companies

11,400

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RANK

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DOME FACILITY SERVICES GROUP KFT.

710

611

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421

336

www.millenia.eu

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AREX FM KFT.

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KĂ&#x2013;T R 92 LĂ&#x2030;TESĂ?TMĂ&#x2030;NYNR GAZDĂ LKODĂ SI KFT.

210

158

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SEB ImmoInvest GmbH, List Group, Starbucks

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IldikĂł Laskai â&#x20AC;&#x201C; â&#x20AC;&#x201C;

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675$%$* 3URSHUW\ and Facility Services GmbH (51)

LĂĄszlĂł VĂĄgĂł Gyula JĂĄszai GĂĄbor Landi

1095 Budapest, MĂĄriĂĄssy utca 7. (1) 325-1850 â&#x20AC;&#x201C; info@ VWUDEDJ SIV KX

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Ferenc BatĂĄri â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1148 Budapest, )RJDUDVL ~W (1) 468-4080 (1) 468-4088 mail@future-fm.hu

Philip Evans =ROWiQ Lehoczky DĂĄniel 3D]VLW]N\

1062 Budapest, VĂĄci Ăşt 3. (1) 374-6516 (1) 374-6571 info@ WULJUDQLWPDQDJHPHQW FRP

1994 23

SĂĄndor DemjĂĄnÂť, SĂĄndor CsĂĄnyiÂť, SĂĄndor NyĂşlÂť 3HWHU 0XQNÂť

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1994 27

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GĂĄbor Angel Krisztina Czifra â&#x20AC;&#x201C;

1033 Budapest, 3ROJiU XWFD Â˛ (1) 457-3860 (1) 367-2800 bif@bif.hu

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2003 61

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1023 Budapest, Lajos utca 28â&#x20AC;&#x201C;32. (1) 423-0000 (1) 423-0001 LQIR#GRPHIVJ KX

1999 41

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Tibor Balogh *\|UJ\ OsvĂĄth GĂĄbor Kelemen

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2001 11

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Hubert MĂźhringer 3pWHU 5DGy BerenikĂŠ SĂłlyom

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1027 Budapest, &VDORJiQ\ XWFD (1) 325-2640 (1) 325-2644 arexfm@arexfm.hu

1997 20

DĂĄniel Jellinek (100) â&#x20AC;&#x201C;

DĂĄniel Jellinek â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1148 Budapest, Kerepesi Ăşt 52. (1) 688-1700 (1) 688-1701 LQIR#LQ PDQDJHPHQW KX

1992

(100) â&#x20AC;&#x201C;

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â&#x20AC;&#x201C; Rustler Gruppe GmbH (100)

Valentin Langbein â&#x20AC;&#x201C; â&#x20AC;&#x201C;

1123 Budapest, $ONRWiV XWFD Â˛ (1) 434-2690 (1) 434-2699 info@rustler.hu

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â&#x20AC;&#x201C;

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1999

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www.kotr92fm.hu

RUSTLER KFT. www.rustler.hu

ADDRESS PHONE FAX EMAIL

2008

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:KLOH HYHU\ HIIRUW LV PDGH WR HQVXUH DFFXUDF\ DQG WKRURXJKQHVV RPLVVLRQV DQG W\SRJUDSKLFDO HUURUV PD\ RFFXU $GGLWLRQV RU FRUUHFWLRQV WR WKH OLVW VKRXOG EH VHQW RQ OHWWHUKHDG WR WKH UHVHDUFK GHSDUWPHQW %XGDSHVW %XVLQHVV -RXUQDO 1075 Budapest, MadĂĄch Imre Ăşt 13â&#x20AC;&#x201C;14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

BBJ

4 Socialite BOOK REVIEW

THE NEW DEFINITION OF SUCCESS The co−founder and editor−in− chief of The Huffington Post redefines what it means to be successful in today’s world. In 2007, Ariana Huffington woke up on the floor in a pool of blood. She had just worked another 18−hour day and had collapsed from exhaustion, hitting her head on the corner of her desk as she fell. She had co−founded The Huffington Post two years’ earlier, had been on the covers of magazines, and had just been called one of the world’s 100 Most Influential People by Time magazine. But after her fall, she realized that something had to change. “In terms of the traditional measures of success, which focus on money and power, I was very successful,” she writes. “But I was not living a successful life by any sane definition of success.” Huffington likens money and power to two legs on a three−legged stool. Those two legs may hold us up temporarily, but sooner or later we’re going to topple over. We need a third leg – a third metric for defining success – in order to live a healthy, productive, and meaningful life. Looking around her, Huffington found that the people who really seemed to be thriving had made room in their lives for four things: well−being, wisdom, wonder and giving. And so the idea of the Third Metric was born. The ‘four pillars’ that Huffington identified make up the four sections of her book ‘Thrive’.

In each section she draws on the latest research and scientific findings in the fields of psychology, sport, sleep and physiology to show the profound and transformative effects of meditation, mindfulness, unplugging and giving. She also talks about the lessons she has learned in her own efforts to embody the principals of the Third Metric, and includes a range of practical tools and techniques that can be used for eradicating stress, and that are easy to incorporate into our everyday lives. ‘Thrive’ is also a deeply personal book in which Huffington talks candidly about her challenges with managing time and prioritizing the demands of a career and two daughters. Hers is a passionate call to arms as she looks to redefine what it means to be successful, and shows us the way to a revolution in our culture, our thinking and our workplaces. “In the new definition of success,” she writes, “building and looking after our financial capital is not enough. We need to do everything we can to protect and nurture our human capital [...] to reconnect with ourselves, our loved ones, and our community – in a word, to thrive.’

THRIVE by Ariana Huffington Published by WH Ellen ISBN 9780753555415 Available to order through www.hungaropress.hu

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | May 09 – May 22

MANAGING SWITZERLAND IN BUDAPEST Tibor Vona, the passionate outsider behind the success of the ExperiDance production company ROBERT V. WALLENSTEIN

How would you identify ExperiDance? A: Our company is known as a creator of a new style that is studied at the Hungarian dance academies. It is already a Hungaricum−value in dance. We respect all kinds of folk art traditions that we combine with innovative approaches, thus we can reach out constantly to new audiences. We effectively attract the attention of young generations and foreigners whom we make interested in the values of Hungarian folk arts. The essence of our ‘ars poetica’ is to provide premium quality entertainment by focusing on real values and special experience. Sándor Román, our artistic director and co−founder is keen to re−identify the company from time to time, and his answers are given by the new dance choreographs. We have proved in the past years that folk dance can be a profitable genre in Hungary. Today, when people can get to a folk dance event for about HUF 400, we sell our tickets for 11 times more! Our HUF 4,500 price does not scare people away. I am competing with Harry Potter and Iron Man when it comes to balancing family budgets’ spending on culture, but so far we are managing pretty well.

ExperiDance does it with a ‘crazy, kamikaze outsider’, as you once described your character as a producer. A: Román and I are certainly somewhat outsiders to the Hungarian live performers’ world. Mostly our different backgrounds and pioneering, risk taking, independent characteristics differentiate us from the

others. I came from the printing and publishing sector. In 2000 I decided to leave behind the world of boring numbers and the non−creative advertising atmosphere. I was looking for something more meaningful, a self−realization project. Our publishing company was one of the main sponsors of Michael Flatley’s Budapest show in 2000. I

Tibor Vona Born in Budapest, 1969. Education: Euro−Contact Business School, strategic manager 1990 Budapesti Extra – sales person, advertising 1993 Budapesti Piac – co−owner and publishing director 2000 Founder ExperiDance Production Company 2010 Awarded Golden Cross of Hungarian Republic happened to get invited to the after−party. There I had a chance to ask Flatley why he chose Hungary for one of the biggest show of his life with 70,000 people? He explained to me in a cozy environment over some beer, whiskey, and a cigar that he did a thorough survey on Hungary before, and realized the huge capacity for a new style of folk dancing. He said people love folk dance here, but they lack the real characters of the genre yet. So when I learned from my friend and former business partner, the concert organizer, István Hegedűs, that Flatley had walked away with a profit of HUF 800 million, I thought this would make a fantastic challenge for me! I wanted to do the same. Flatley reminded

me about a single fact: I need a partner, the cornerstone of the product, a talented choreographer. It was fate that in two weeks I met with Román. He had his own company, but was also searching for new ways. When I saw his production I knew – this is it! I offered my assistance to him, asked how I could help him. He said with everything – so we founded ExperiDance together. Knowing that Román collected folk dances extensively, and had three years of experience in Hollywood, working for Universal Studios, I felt that only with him could I realize success. I partnered as a professional investor, who brought in his skills and connections. Today I act as a financial and professional mentor. My job is to build the brand around the company. We both became owners and I can say with pride that our project has evolved in to the most successful Hungarian dance theater production company.

This is why you called your company and rented home, the RAM Collosseum, a UFO? A: Our story can certainly be interpreted as an unidentified flying object – flying from great results – and it is hard for the majority to accept and understand why we are successful. In the present Hungarian cultural scenario we are a complete odd−one−out. When we premiered our first show back in 2001 we sold out the 2,200−seater Erkel Theater 12 times with a HUF 7,500 ticket price. That was a breakthrough start for us, and truly a shock for the dance community in Hungary. Román was seen before as something of an outlaw, who was also looked down upon by others. Most of this community was scared of more talented and experimental newcomers. Why? Because in the Hungarian culture

the natural selectivity had been artificially blocked. The rules of the free market could not be implemented yet. For the interest of the veterans, the system artificially maintains old and privileged territories. It is all about applying for state funds and grants. We deny practices where frustrated artists are knocking on a non−expert politician’s door, asking for financial support for their shocking and disturbing productions. We have managed to remain independent and free willed. Sometimes it was hard. Two years ago I risked my whole family’s life when I got seriously ill after the stress of putting all my previous decade of savings in to the company. But I survived, and now we are back on track and doing better than ever. We dedicate our life here to the amazement and fascination of our audience. We want them to switch off from everyday life and be elevated to a higher dimension with us. With so many aspects we are running a mini Switzerland in 1.5 hectares here in Budapest.

How could you transplant your business management skills to this peculiar field of art? A: I learned management practices in the pioneering times of the early 1990s as a young and striving sales person. I quickly climbed up the stares and become co−owner of Budapesti Piac, the monopoly publishing company a few years later. We were considered equally big fish with the late media mogul, János Fenyő, with whom we competed to acquire the print house Atheneum. We both failed on that project, but our results were impressive with an average 70 tons of printed magazines/ week, a circulation worth HUF 3 billion, and having connections with 4,800 companies. Being producers of ExperiDance in the first

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Budapest Business Journal | May 09 – May 22

few years we clearly realized how much jealousy and hatred accompanies our new way of progression. We were inspired by the negativity and decided to be even more successful here and outside of the country. In China they consider us one of the top 10 dance companies in the world. What is different about our system is that the two owners, Román and I, can work in parallel, each only focusing on what we are good at. He works on the performance and I have the meetings with the financial supporters and also it is my job to provide a calm and transparent situation in the theater, so the artists can focus solely on their production. Unfortunately it is a rare model in Hungary, mostly because effective cultural managers are very expensive. In my case I make 10 times less today than 10−15 years ago, but nobody really believes it. I feel lucky that I can say for me there are more important achievements than money.

I am still wondering about your odd−one−out−image. How does ExperiDance fit in with the RAM? A: We applied for the RAM – a downtown modern cultural center with high tech facilities – with the desire of being a unification pioneer of the Hungarian dance world. This idea of bringing together different platforms made us a scary odd−one−out species. The dance profession was so much shocked by the idea that it decided to continue to refuse partnership. Instead of establishing a dance center in Budapest, nobody wanted to join us here. So we have got a nice home now and are doing great while the other dance companies have remained frustrated with their problems. Our 21st century experience theater is the first of its kind in Budapest, a great potential for all kinds of performance and event organizations. We are the principal renters from the 13th district municipality for 10 years, but we can also make profit from renting the building for different occasions. At RAM we provide stages for all kind of activities – except for politics, which has nothing to do with culture, according to my standards. Mostly we cater for art and performances, of course, but companies can also rent our spaces. Due to clear financial situations we can really function here as an incubator place where people come not by showing their party membership cards, but purchasing the HUF 3,500−4,500 tickets.

Let’s talk about the figures, the real indicator of your achievement. A: We have performed in front of more than one million people with our 14 productions since 2001. We have visited 12 countries with our 28 ensemble dancers. We employ a staff of 35−40 people, we perform around 200 times per a year, about 80 times at the RAM, and the rest are invitation tours. We can sell about 80% of the houses to our shows. Knowing our ticket prices and the

fact that we have more than 600 seats here, I consider it a great achievement. We are really successful if we can rent the theater on those days when the company performs outside of the house. Our mission, producing values and preserving folk art, means much more to me than having billions in my bank account. I was offered a general manager position at BrókerNet back in 2000, but to the surprise of my circle, I refused it. Now most of them have HUF 50−60 billion. I have as much as I need for happiness and remaining hungry for meaningful creativity.

How do you convince companies to sponsor you? A: We are effective. The secret is simple: people of all kinds love to come here. They get an unforgettable experience from us. Today we have the CEO of City Bank coming with his wife – they will have a great time and at the end of the show we will advise them on how to save on their taxes by supporting us through the system of TAO (corporate tax). Several decision makers in the financial sector like to corporate with us this way. I have my personal past and contact to those 4,800 company leaders. I am 45−years−old. My generation is at the peak time of our life. We were the lucky ones who could get on the last train, the train that took us to places where not all the roles were given away. As for our success with TAO−taxation: last year we received HUF 2.1 billion among all those hundreds of Hungarian performing art NGOs who all together applied for the HUF 11 billion TAO−budget. This is a pretty significant result in my view. Additionally we also have our main sponsors as well on whom we rely: Audi, Lambda System, and Griff Collection.

You getting along pretty well with yourself, I guess? A: Yes, and especially since my sickness. I do not see a personal failure if something cannot be realized. Before my sickness I could not handle that. That is why I got ill. When you are just about to finish your life, and against all the odds you still survive, you going to change your life radically. I go for weekly checks, and my interior energy sources had been transformed; now I can live a life with true faith again and with very positive attitude. During that sickness I was taking the biggest existential risk of my life. I asked myself if I could lose all I have made before, and if I could accept it? Would I be able to restart my life from the beginning? I felt that I could. That very moment was the moment of freedom, the eternal independence for me. That feeling is what drives me today, hopefully till the last day of my life.

Your stated role model was always the famous Cirque du Soleil Company. Any plan to follow them to the stages of Las Vegas? A: Once we were offered a contract that might have ended up with us in Vegas.

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But it turned out that we could have had only a 1% share on that uncertain business. Trying to still be a dreamer but looking at our future realistically, I can only say that we are on the right track. Our speed is still exciting; we are preparing new productions, two of which are international with Italian, German and Spanish companies. And we have a lot of offers for tours abroad with our latest show, ‘Fergeteges’. As for our big plans: Mr. Román still strives for reaching universal world fame, and wants his name to be remembered. For me, I will be happy

if I can get ever more invitations from Kazincbarcika and other smaller places in Hungary where they haven’t seen us yet. If you ask about personal vision, I am planning to create a dynasty. I want one day to pass on my duties to my 19−year− old son who studies economics. My second son is very talented in art, so perhaps he can also add his value to the continuation. And all the big brothers can be supported by my younger son who is as an excellent physical fighter, so naturally will be the recovery expert in the family.

ABOUT EXPERIDANCE • • • • • • • •

Founded in 2000 by Sándor Román and Tibor Vona Audiences totaling more than 1,000,000 1,500 full-house performances Performed in 12 countries 14 shows in the repertoire 28 dancers employed 35-40 technical staff employed Ambassadors of Hungarian Culture

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WHO'S NEWS

Name RENE KOTTLOWSKI Current company/position EVOSOFT HUNGARY KFT / COO

Name RYOICHI OURA Current company/position MAGYAR SUZUKI CORPORATION / CEO

Kottlowski has joined the executive board of evosoft Hungary Kft as chief operations officer (COO). Previously, he worked for evosoft GmbH in Germany, which belongs to the interest of Siemens AG. He was the head of a business function that was responsible for software product development. Earlier he worked for different companies as business consultant and division head in the field of customer relations management. He has more than 10 years of experience in executive positions.

CEO Hisashi Takeuchi is leaving Magyar Suzuki Corporation, to be replaced by Ryoichi Oura. Hisashi has been promoted to a new position in the product-planning department of parent Suzuki Motor Corporation. Oura got his degree in Chemical Engineering at the Department of Engineering of Yokohama National University. He started his career in 1984 joining SMC in charge of manufacturing engineering for the painting process at its headquarters. In 2011 he transferred to Suzuki’s Esztergom plant, responsible for the production department.

Budapest Business Journal | May 09 – May 22

Do you know someone on the move? Send information to research@bbj.hu

Name ZOLTÁN MATISA Current company/position DHL FREIGHT MAGYARORSZÁG / MANAGING DIRECTOR

Name KRISZTINA HORVÁTH Current company/position SAP HUNGARY / HR DIRECTOR

As of May 1, Matisa is the new managing director of road haulage company DHL Freight. His predecessor Péter Bartha continues his career at the company’s German HQ in Hannover. Before his current appointment, Matisa had been with, among others, IBM Data Storage System Kft for ten years. Earlier, he worked for Unilever, Procter&Gamble and Samsung. He obtained his diploma from the International Business School and Oxford Brookes University.

Horváth, who has been serving as acting HR director for some time, has been appointed fulltime to the position of HR director at SAP Hungary. She has been with SAP since 2002, worked as HR business partner and managed cross-border projects in the EMEA region. She holds degrees from the Loránd Eötvös University and the Corvinus University.

Balla is the new sales director of SmartSense Hungary. He has worked in the media industry for many years: he was deputy editor-in-chief at IDG Hungary, and also spent three years as sales manager at the company’s online and digital magazines. During this time, he participated in the launch and development of several new publications.

Name ZOLTÁN BALLA Current company/position SMARTSENSE HUNGARY / SALES DIRECTOR

Name ISTVÁN KEMÉNYFY Current company/position MAZARS / SENIOR TAX MANAGER

Keményfy was named senior tax manager at Mazars in April. For the past 14 years, he has worked as a tax advisor at law firm Lakatos, Köves és Társai (and its predecessor Köves Clifford Chance). Between 1990 and 2000, he was tax advisor at Deloitte, Price Waterhouse, Coopers&Lybrand, and PwC. Before that, he worked for the Finance Ministry for ten years.

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Budapest Business Journal | May 09 – May 22

RESTAURANT REVIEW

FINE, FRENCH AND FANCY MÁK is one of the most popular bistros in Budapest. It has won several gastronomy prizes and recommendations, is praised by bloggers and foodies, and – which is maybe the most important thing – the restaurant is full almost every day. MÁK is an international restaurant, not only in terms of its kitchen, but most of its quests as well. It could be located anywhere in the world, but being in Budapest, the recipes and the raw materials are rooted in the Hungarian cuisine. Its culinary concept is based on the international trends of the past decade, focusing on ﬁne dining and the bistro style. János Mizsei, the very young, only 23−year−old chef has been leading the kitchen since last summer. We visited MÁK on a weekday night. The friendly, well−lit, vintage designed place was almost full at around 8 PM. The guests were seemingly having great fun enjoying their dinner and wine. We took a side table, so we could have a peaceful conversation and enjoy the show at the same time. The menu is well structured but kept simple. There are only a few starters, main courses and desserts to

choose from; even so, it was not an easy task given the exquisite food compositions. The remarkable wine selection was also tempting. While we were making our choices, we were given various kinds of bread and butter. The rustic coffee and walnut bread was salty and crunchy, and made an interesting match with the butter. We also had pogacsa with onions, and tried a vanilla and Sichuan pepper butter with homemade bread. As a chef’s gift we got sztapacska, a traditional Slovakian potato dumpling with goat’s cheese foam and mangalica bacon. My vegetarian partner got the same, though of course without the bacon. My ﬁrst course was guinea−fowl consommé, which was very strong and characteristic. Green peas with mint, smoked guinea−fowl ham, carrots and mango cubes and watercress made it special. My partner had marinated mackerel with beetroot variations (beetroot leaf salad with sou−vide beetroot vinaigrette, pink and yellow beetroot, and panna cotta and tonka bean crumbs). The different tastes and textures created a vivid experience; each bite was a new surprise. For main courses we had grilled duck liver with vanilla scented polenta mousse, smoked baby corns, marinated baby radish and a few kinds of exotic fruits. It was a rendezvous of sweet and savory, meat and fruit, soft and crispy. We also had a saffron risotto with mint

and fried dough. The risotto rise was al dente, and was sweet and creamy: a good choice. For dessert we ordered a mousse made of 80% dark, Belgian chocolate with cherry coulis, and lemon mousse with marsh mellow, lemon coulis and crumbs. The appearance of each dessert was elegant and classy; the composition of tastes well balanced and delicious. The revolution in gastronomy has brought us many wonders, but it has also

introduced the curse of brave creativity. MÁK is also on the way to ﬁnd its place among the most creative and innovative modern restaurants. We wish it good luck with its mission. (X)

MÁK BISTRO 1051 Budapest, Vigyázó Ferenc utca 4.

GOURMET FESTIVAL: ONLY THE BEST One of the best Hungarian gastro-festivals, Gourmet Festival, is awaiting all gastronomy fans between 30 May and 1 June this year. Guests will be able to get a taste of Hungary’s best restaurants, wineries, pastry shops and get to know other famous representatives of the gastro-world. While the main focus was Goulash last year, this time chefs will have to re-create the wellknown Hungarian ‘rakott krumpli’ (layered potato casserole) in a unique way, next to their own specialties. Gourmet Festival, organized by Sziget Cultural Management, has already proven in the previous years that it aims to showcase the bests, let it be anything from restaurants, artisan goods, pastry shops, winery or brewery. In 2013 more than 100 exhibitors were part of the festival program and more than 12 000 visitors were interested to try out the specialties. This year not only more guests, but also more exhibitors are expected at the three day event. Károly Gerendai, founder of the event, has declared that Gourmet Festival is the ultimate destination today for those who would like to taste the bests of Hungarian cuisine at one place at the same time. He said: “Our selected and special showcase introduces the most important masters from all around the country and it is an honor that many of them only come to our event”. Besides the diverse and mostly modern offer, Gourmet Festival now for the second time also focuses on a traditional Hungarian meal. While last year the chefs had to re−create the famous Hungarian goulash, this year they will have to work

on the concept of ‘rakott krumpli’ (layered potato casserole). The number of the exhibitors is expanding also. The organizers are inviting all the important actors of the Hungarian gastro world, but this time the local representatives of international cuisines will also appear at Gourmet. This way those Hungarian restaurants focusing on a thematic international cuisine will have the chance to show their tastes and this year quality street food will also enter the festival site. The popular gastro stage will have many colorful programs, featuring cooking shows from both Hungarian and international chefs or cooking classes and tasters. Finally, here is a little teaser from last year’s event: http://www.youtube.com/ watch?v=rocjHomxs0o

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