Budapest Business Journal 22/22 by Business Publishing Services Kft.

Report 3Special for reta il ar ye od A go

BBJ

Retail

SPECIAL REPORT:

RETAIL SALES GROUPS (%)

IN HUNGARY RETAIL TRADE OF HUF) (IN MILLIONS

2014

ON RETAIL VOLUME INDICES YEAR=100) UNADJUSTED PERIOD OF PREVIOUS SALES (SAME 2012.

2013.

Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. March April May

101 100.1 100.6 96.9 97.3 98.8 97.9 97.7 96.1 97.2 95.9 96,6 97.2 97.6 99.5 100.6 102.2

ITY BY MAJOR COMMOD

June July Aug. Sep. Oct. Nov. Dec.

2014.

Jan. Feb. March April May June July Aug. Sep.

26.74

3.20

3.66

Alcoholic beverages beverages Non−alcoholic

2.85

3.24

1.01

0.85

Coffee

6.41

6.32

Tobacco

6.15

5.13

3.58

3.40

4.38

4.23

1.74

1.89

1.17

1.15

0.65

0.6

0.68

0.67

0.87

0.82

0.77

0.83

0.75

0.73

0.71

0.68

0.17

0.12

1.73

1.91

0.75

0.96

0.63

0.81

2.27

3.66

0.54

0.79

1.47

1.2

1.15

0.83

0.51

0.53

0.05

0.06

0.16

0.2

0.15

1.84

1.68

0.3

0.35

0.65

0.55

0.29

0.31

1.04

1.16

18.07

18.81

5.08

5.02

100

l and medical goods Pharmaceutica toiletries Cosmetics and goods Textiles, clothing goods Footwear, leather

99.1 103.1 102.9 102.7 104.5 106 104

106.2 106.7 106.4 109 104.9 104.1 102.5 102 105

Furniture

of textile materials Household articles Lighting equipment Household articles household appliances Durable electrical electric appliances Small domestic equipment Radio, TV and video and discs Audio, video tapes Hardware Sanitary equipment materials and equipment Do−it−yourself Building materials lacquers Paints, resins and Books, news, stationery equipment Information processing and precision equipment Photographic, optical Wallpaper Floor coverings

Central Household fuel retailing, the automotive fuel (KSH) reported on Cleaning materials Statistics Office November 26. accelerated by Second−hand goods Retail sales growth months. the previous two 2.4%. 2.5% in each of Phones rose an adjusted Retail food sales were up 5.9% and and jewelry sales Watches, clocks showed Non−food sales increased 7.6%. levels. figures games and toys vehicle−fuel Year−on−year mber, retail sales Sports articles, throughout the In January−Septe to calendar− that positive improvements numbers show 5.1% according according to Automotive fuel year, and the latestThe volume of retail rose and 5% adjusted data sales rose an trend continuing. rise of 4.5% figures. Food Other articles sales were up sales saw a year−on−year increase unadjusted 5.4%, non−food with a y.o.y. Retail trade, total in September, for food, drinks and adjusted vehicle−fuel sales increased and in sales of 2.4% rise of 5.9% in non− 4.9% a 4.9%. tobacco stores, and a rise of 7.6% in by food retail trade

BBJ STAFF

recovered, and As the economy at a lively clip in grew Hungary’s GDP also grew to healthy 2014, retail sales

VOL. 22. NUMBER 22

Q1 28.19

Food

RETAIL NOVEMBER 28, 2014 – DECEMBER 11, 2014

BUDAPEST

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

Members of GE and the American Chamber of Commerce in Hungary celebrated a quarter century in the country at a gala event inside the Parliament building, where Prime Minister Viktor Orbán reaffirmed Hungarian−U.S. friendship in spite of ‘debates on ideology or values’ and ‘disputes between U.S. corporations and regulatory authorities’. 10 NEWS

SPECIAL REPORT

NEWS

Taxes could profoundly impact some sectors

Retailers balk at new taxes, FX analysis: Refunds to plans for Sunday closings average HUF 1−1.5 mln

Our analysis of the new rules for 2015 finds a continued trend toward shifting the burden from income to consumption. Sectoral taxes are also continuing, and will feature new alcohol and tobacco levies. 03

While a tax structure that hits hypermarkets and a proposed Sunday closure law was fine with some local supermarkets, most of the larger foreign chains say they are feeling squeezed. 13

Analysts say the newly passed law on compensation to foreign exchange borrowers will net an average of HUF 1-1.5 million for debtors, without a serious short-term shock to banks. 04

Photo: Todoroff Lazar

Still sticking together

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

SUBSCRIPTIONS

Report 3Special retail A good year for

BBJ

Retail

SPECIAL REPORT:

RETAIL SALES GROUPS (%)

IN HUNGARY RETAIL TRADE OF HUF) (IN MILLIONS

BY MAJOR COMMODITY 2014

26.74

28.19

2013.

Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. March April May

101 100.1 100.6 96.9 97.3 98.8 97.9 97.7 96.1 97.2 95.9 96,6 97.2 97.6 99.5 100.6 102.2

June July Aug. Sep. Oct. Nov. Dec.

2014.

Jan. Feb. March April May June July Aug. Sep.

2.85

Coffee

6.41

and medical goods Pharmaceutical toiletries Cosmetics and goods Textiles, clothing goods Footwear, leather

99.1 103.1 102.9 102.7 104.5 106 104

106.2 106.7 106.4 109 104.9 104.1 102.5 102 105

Furniture

Central Household fuel retailing, the automotive fuel (KSH) reported on Cleaning materials Statistics Office November 26. accelerated by Second−hand goods Retail sales growth months. the previous two 2.4%. 2.5% in each of Phones rose an adjusted Retail food sales were up 5.9% and and jewelry sales Watches, clocks showed Non−food sales increased 7.6%. levels. figures games and toys vehicle−fuel retail sales Year−on−year Sports articles, throughout the In January−September, to calendar− that positive improvements numbers show 5.1% according according to Automotive fuel year, and the latestThe volume of retail rose and 5% adjusted data sales rose an trend continuing. rise of 4.5% figures. Food Other articles sales were up sales saw a year−on−year increase unadjusted 5.4%, non−food with a y.o.y. Retail trade, total in September, for food, drinks and adjusted vehicle−fuel sales increased and in sales of 2.4% rise of 5.9% in non− 4.9% a 4.9%. tobacco stores, and a rise of 7.6% in by food retail trade

BBJ STAFF

RETAIL

3.24

Alcoholic beverages beverages Non−alcoholic Tobacco

2012.

3.66

3.20

Food

ON RETAIL VOLUME INDICES YEAR=100) UNADJUSTED PERIOD OF PREVIOUS SALES (SAME

recovered, and As the economy at a lively clip in grew Hungary’s GDP also grew to healthy 2014, retail sales

0.85

1.01

6.32 5.13

6.15

3.40

3.58

4.23

4.38

1.89

1.74

1.15

1.17

0.6

0.65

0.67

0.68

0.82

0.87

0.83

0.77

0.73

0.75

0.68

0.71

0.12

0.17

1.91

1.73

0.96

0.75

Call +36 1 398-0344, or email circulation@bbj.hu

0.81

0.63

3.66

2.27

0.79

0.54 1.47

1.2

1.15

0.83

0.51

0.53

0.05

0.06

0.16

0.2

0.15

1.84

1.68

0.3

0.35

0.65

0.55

0.29

0.31

1.04

1.16

18.07

18.81

5.08

5.02

100

BUSINESS JOURNAL VOL. 22. NUMBER 22

BUDAPEST B

HUF 1,250 | €5 | $6 | £3.5

NOVEMBER 28, 2014 – DECEMBER 11, 2014

BUDAPEST BUSINESS JOURNAL 1 year HUF 27,500+VAT 6 months HUF 13,750+VAT 3 months HUF 6,875+VAT

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

NEWS

Photo: Todoroff Lazar

Still sticking together

Newsletters HUNGARY A.M., ENERGY TODAY, REGIONAL TODAY 1 year HUF 179,000+VAT 6 months HUF 104,900+VAT 3 months HUF 58,900+VAT

NEWS

Taxes could profoundly impact some sectors

Retailers balk at new taxes, FX analysis: Refunds to plans for Sunday closings average HUF 1−1.5 mln

While a tax structure that hits hypermarkets and a proposed Sunday closure law was fine with some local supermarkets, most of the larger foreign chains say they are feeling squeezed. 13

Analysts say the newly passed law on compensation to foreign exchange borrowers will net an average of HUF 1-1.5 million for borrowers, without a serious short-term shock to banks. 04

BOOK OF LISTS 2013-2014

HUF 19,120+VAT

DIGIBOL Subscription fee: HUF 39,900+VAT

EDITOR-IN-CHIEF: Tom Popper ASSOCIATE EDITOR: Robin Marshall EDITORIAL STAFF:

Florence De Bruyere, Maria Fedorova, Aniko Fenyvesi, Gergely Herpai, Levente HörömpöliTóth, Christian Keszthelyi, Gabriella Lovas, Robin Marshall, Zsófia Végh, András Zsámboki LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu DESIGN:

Absolut Design Stúdió (production@bbj.hu) LAYOUT:

Norbert Balázs ADVERTISING:

Absolut Media Zrt (hirdetes@amedia.hu) SALES: sales@bbj.hu

THE EDITOR SAYS

Without foreigners, we dance alone Back in May 2012, Prime Minister Viktor Orbán famously spoke of the “peacock dance” of diplomacy, in which one seeks to remain friendly with foreign powers, even while acting against their wishes. Perhaps we were seeing a bit of the dance at the 25th anniversary gala for AmCham on November 14, when Orbán described the special alliance between Hungary and America while acknowledging “disputes between U.S. corporations and regulatory authorities” and “debates on ideology or values”. But when Orbán first explained his peacock dance, he said the point of it was to keep Western interests from pushing Hungary into doing something that is bad for the country. While protectionism may have a populist appeal, foreign investors and foreign companies are good for the country. The new tax laws and other recent policies that hurt Western firms also hurt healthy competition, and run the risk of driving away the foreign investment that brings jobs. These moves may be good for a few companies or individuals, but overall they are bad for the country. Take the supermarket supervisory taxes and proposed Sunday closing laws. Local chain CBA, which is owned by László Baldauf, reputed to be a major campaign contributor to Fidesz, says it is in favor of the changes. Of courses it is: The law puts foreign supermarket chains like Tesco and SPAR in the highest tax bracket, while CBA is likely to fall into the zero bracket, simply because it uses a franchise− type structure. And if the Sunday law passes, with its loophole for smaller stores, CBA will be able to keep some stores open, while Tesco hypermarkets will have to forgo their 24−hour opening policy. Already, the big chains are projecting that the new tax could bring price hikes, which means Hungarians will pay more for food. The potential for long−term damage to competition is an even bigger concern.

Recent bank policy also has a populist ring to it: Make bankers pay for the pain of the 2008 financial crisis – caused in part by banks – by forcing them to pay for the losses borrowers felt due to the drop in the forint. And as long as Parliament is writing special laws regarding banks, why not pass a so−called “Lex OTP”? That law gives a tax break to firms that lost money due to the crisis in Ukraine, but it clearly helps OTP bank, owned by Sándor Csányi, a sometime close associate of PM Orbán. OTP is currently the biggest retail bank, and its services are often more expensive than others. If the government achieves its stated goal of 60% Hungarian ownership of banks by forcing out foreign firms, locals will have fewer alternatives to OTP, and can expect to pay even more for banking services. What’s worse, the pool of credit that funds businesses and home purchases will be smaller and doled out in a less competitive market. Of course we can mention the special taxes aimed directly at RTL Klub, the TV station that is aggressively criticizing the government and is blatantly stuck in a punitive tax bracket by its foes in leadership. Fidesz makes no pretence of treating RTL Klub the way it treats other media. Even the new tobacco tax hits foreign firms hardest. Phillip Morris and British American Tobacco are likely to pay tens of billions of forints in taxes while Hungarian firm Continental Tobacco Group would see an increase more in the order of tens of millions of forints. Foreign firms bring investment, jobs, competition and goods that Hungarians want to buy. Populist protectionist measures that hurt foreigners benefit a few business people but are also likely to lead to less competition and fewer jobs. No matter how you try to dance around it, that’s bad for Hungary.

CEO:

Balázs Román PUBLISHER:

Tamás Botka

Then and now

CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu PRINTING:

Absolut Print Kft MEDIA REPRESENTATION: Absolut Media Zrt Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu BBJ-PARTNERS

What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2011 BUSINESS MEDIA SERVICES LLC with all rights reserved. The Budapest Business Journal’s print run is audited by MATESZ, 1034 Budapest, Bécsi út 122-124, a member of IFABC.

BBJ.HU YOUR DAILY DOSE OF INFORMATION IN BBJ QUALITY

A figure dressed as Mikulás, or St. Nicholas, gives a child a gift in a 1963 photo from Budapest, left. Mikulás, who brings treats to children on December 6, is now all but supplemented with the tradition of Christmas. Above is a recent Christmas Market in the center of Budapest.

BBJ

1 News

NEWS

Analyst on FX loan law

NEWS

Another anti−gov’t demo

macroscope

New taxes hit some sectors harder The tax package for 2015 continues to shift the burden from income to consumption, with plenty of special taxes thrown in. Our expert picks out the changes to watch for. GABRIELLA LOVAS

Although the government promised that taxpayers would see no more dramatic changes to the tax system, tax consultants agree that some of the amendments could have profound consequences in several sectors. These include an extraordinary health contribution on tobacco wholesalers, an increase in excise taxes and the modification of the retail supply chain, according to PwC’s Tax Alert. Dramatic changes or not, the 2015 tax package has created enough drama with mass protests, flying computer parts and thousands of mobiles phones lit like candles on the dark streets of Budapest. But the government backed down and the scope of the telecommunication tax will not be extended to internet data transfers, at least for the time being. The government claims that the 2015 tax package, which was approved on November 18, aims to support families and small businesses, but will keep the taxes levied on special sectors in place. Following a long−held Fidesz philosophy, the focus of taxation continues to be shifted from taxes on income towards consumption and sales−type taxes as well as taxes that serve environmental and health preservation purposes. The package also contains measures to avoid tax evasion. Taxpayers shouldn’t get their hopes up about the reduced VAT rate they might have spotted in the package. Hungary’s standard VAT rate will remain the highest in the EU. A 5% VAT rate will be applied only to goods deemed intermediate products and to large live animals and abattoir processed animal products. Contrary to earlier plans, businesses will not yet see a one−digit corporate income tax, either. Here the Budapest Business Journal presents the most important changes in the package with the help of KPMG Tanácsadó Kft. and PwC Magyarország. FREE LUNCHES TAXED MORE Among the amendments, the changes on fringe benefits – like food or travel vouchers – concern most people. If the benefits are not credited on a SZÉP Card, any benefits exceeding the HUF 200,000 yearly limit will be subject to a 51.17% tax rate. The tax rate remains 35.7% below the yearly limit.

Perils of eastern banking: An OTP bank branch in Moscow. OTP will get a break on its taxes due to losses blamed on the Ukraine conflict.

The balance of the SZÉP Card may be used for leisure−time activities, catering and hotel services, says the government. The top tax rate applicable on any advertising tax base exceeding HUF 20 billion increases to 50% from the previous 40%. This will take the biggest toll on German−owned TV station RTL Klub, which stands alone in the top bracket. RTL Klub apparently received this special attention because it has been giving more scrutiny to the government in its newscasts since the advertising tax was introduced earlier this year. As for the special tax on financial institutions, OTP Bank will also receive special attention, but in a good way. According to an amendment some call “Lex OTP”, taxpayers with a Hungarian tax number are entitled to a tax refund capped at half of listed taxes paid for 2014 but not more than HUF 5 bln, in the case of certain business events caused by the Ukrainian crisis. OTP’s Ukraininan subsidiary accumulated HUF 37 bln in losses in the first nine months of 2014. Another important change related to the special taxes on financial institutions is that the proposal eliminates the current special tax levied on investment fund management companies. However, it introduces a new one on distributors and investment funds. An annual tax of 0.05% will be levied on a quarterly basis on distributors seated in Hungary. For the so−called “fund of funds”, funds that invest in other funds rather

than shares or bonds, there is a special rule to avoid double taxation. KPMG notes in its Tax Newsletter that “unfortunately the wording is not fully clear and thus it remains a gray area”. Furthermore, in line with recent European Court judgments, portfolio management services cannot be exempted from VAT any more. Perhaps the second most controversial change after the now−scrapped internet tax is the increase of the food chain supervision fee from its current level of 0.1% of sales turnover, which will hit big foreign chains, like the market leader Tesco. The fourth biggest player, Spar, recently told reporters, that it has paid HUF 325 million in supervision fees so far, but the fee to be paid will be 30 times higher, at HUF 9 bln next year. The fee will be determined on a progressive range. For entities with less than HUF 500 mln turnover, it will be 0%, but it will reach 6% for those with more than HUF 3 bln in revenues. The scope of public health product tax will be extended to alcoholic beverages. The tax amount will range from HUF 20−HUF 900 per liter, depending on the alcohol content. Another unpopular change is that municipalities will be entitled to introduce new taxes on private taxpayers. COUNTERING THE BLACK ECONOMY The government says it aims to continue to reduce tax fraud and to use all possible means in the fight against tax evasion.

Among anti−tax avoidance measures, the most significant, according to the government, is the system set up to prevent VAT fraud. The purpose of the Electronic Road Freight Traffic Monitoring System (EKAER) is “to keep track of the actual route of goods and to ensure that no goods may be placed on the market in Hungary, which were not previously reported to the tax authority. The new system will allow the authorities to perform their controlling and monitoring functions more effectively than ever before.” The minimum VAT amount in invoices to be reported will be halved to HUF 1 mln. New businesses are required to submit monthly VAT filings in the first two years of operations. The tax authority can request data from telecommunication service providers with respect to online sales turnover. SUPPORTING FAMILIES New tax breaks are planned for couples that marry if at least one of the partners is marrying for the first time. From 2016, the family tax base allowance for families with two children will be increased each year. In 2016, a tax base reduction of HUF 78,125 per month per child can be claimed, up from HUF 62,500 next year. Employers would be eligible for 100% of the social tax allowance in cases where employees are eligible for certain maternity benefits, but only in cases where they are employed only part time.

WWW.BBJ.HU

04 News

Budapest Business Journal | November 28 – December 11, 2014

Analyst: FX law holds no surprises CHRISTIAN KESZTHELYI

The passing of the new foreign exchange law does not come as a surprise for the Hungarian banking sector and uncertainty over what the law might have held is now past, helping to calm the market, Buda−Cash Senior Analyst Zoltán Réczey told the Budapest Business Journal. On November 25, the Hungarian Parliament approved the law on converting retail mortgages denominated in foreign currency as well as the law on “fair banks”; the laws are meant to assist borrowers hurt by the financial crisis of 2008 and subsequent declines in the value of the forint. From the consumers’ perspective it is a plus, as Réczey calculates that an average debtor could be compensated from HUF1−1.5 million and their monthly debt would decrease by HUF 20,000−25,000. Réczey believes that the changes would make Hungary less vulnerable to foreign shocks, and the compensation might positively affect local consumption, but it is still too early to see if the impact will be positive. When converting foreign exchange loans to forints, the National Bank of Hungary will fix the exchange rate for the conversion at an average of the rate experienced between June 16 and November 7 – or the rate of November 7 – whichever is more favorable to borrowers. This is expected to yield a rate of HUF 256.47 to the Swiss franc, HUF 308.97 to the euro and HUF 2.163 to the yen. Loans that were denominated in foreign currency will be denominated in forints at those rates.

Photo: Csaba Pelsoczy

New measures mean the average borrower can expect about HUF 1−1.5 mln in relief.

Minister of Justice László Trócsányi, left, and Economy Minister Mihály Varga at a press conference on the law.

“The recently approved laws are a relief for the banking sector, as now the insecurity of the last couple of months has perished,” Réczey said. Now that the laws are passed, he added, banks could start calculating the amount they need to spend on compensation and start focusing on the future. On the other hand, he noted the burden placed on the banking sector is huge and will worsen its efficiency and capital position. The market could experience consolidation, and more mergers and acquisitions are to be expected, Réczey predicted. Borrowing activity is likely to see a decline as a result of the two new laws, but the forint would experience a gradual strengthening. The “fair banks law” establishes strict conditions for unilateral changes to interest rates and fees, as well as detailing rules for how lenders inform their clients of services and charges. Justice Minister László Trócsányi said earlier that the legislation aimed to broaden the defense of Hungarian consumers. The FX law was approved with 116 voting in favor, 38 voting against, and a single abstention, while the law on “fair banks” was passed with 115 ayes, 13 nays, and 25 abstentions.

NEWS

IN BRIEF HUNGARY COOLS UKRAINIAN HOPES FOR GAS SUPPLY Hungary’s National Development Minister played down Ukraine’s hopes for a fast renewal of gas supplies, saying Hungary would only be able to provide so−called reverse natural gas flows to Ukraine after filling up its own storage tanks. “We are filling up (storage) capacities and until then we are not able to provide reverse,” Reuters quoted Miklós Seszták. Hungary’s storage tanks are 71.2% full at 4.5 bln cubic meters, according to Gas Infrastructure Europe’s website. Ukraine will buy one billion cubic meters of natural gas from Russia by the end of the year and up to that same amount monthly through the winter, Ukraine’s Naftogaz Chief Executive Andriy Kobolyev said. Eastward gas flows from Poland and Slovakia have helped to meet demand, though Hungary stopped shipping supplies to Ukraine in September. Kobolyev said he hoped Hungary would resume deliveries as soon as December. “We hope the supply of gas from Hungary will resume in December or January next year. We are in discussions with Hungarian counterparts,” he said. Last week, energy affairs state secretary at the Hungarian National Development Ministry, András Aradszki, also said that Hungary could resume gas shipments to Ukraine from December. In an interview with Reuters, Aradszki said there had been no pressure from Russian gas company Gazprom to halt gas shipments to Ukraine and said Hungary could technically resume shipments to Ukraine from December if Ukraine asks. “Restarting shipments will have no technical obstacles if Russian shipments are completed,” he said. Aradszki added that a separate pipeline connecting Hungary and Slovakia could start operating with full capacity in January. It could pump gas either north or south. KÖVÉR ORDERS REMOVAL OF EU FLAG FROM PARLIAMENT Speaker of the Parliament László Kövér ordered the EU flag to be removed from the

Parliamentary session, nol.hu reported on November 17. The Fidesz politician said that the Parliament is, for the time being, a place for the Hungarian national flag. The EU flags were brought in by MSZP MPs who also put flags in the windows of their offices in Parliament prior to the demonstrations scheduled on Kossuth Lajos tér that evening (see left). OPPOSITION: HUNGARY IS IN DEEP POVERTY Hungary’s leftist Democratic Coalition (DK) opposition lawmaker Tibor Zaveczki said on November 21 that the country is on the road to full poverty, commenting on Eurostat data that reveals more than 26% of Hungarians (three times the EU average) are classed as seriously deprived. According to Zaveczki, the deprivation rate is unprecedented in Hungary and the Socialists maintain that social spending will fall by 25% next year. Socialist Ildikó Borbély Bangó said she believes that the country’s current economic stance does not warrant such a high level of poverty. The green LMP party said that the government was ruining the social distribution system instead of strengthening it. TAX OFFICE, INDUSTRY INSIDERS CAMPAIGN AGAINST BLACK MARKET TOBACCO SALES Hungary’s National Tax and Customs Authority (NAV) launched a campaign against black market sales of cigarettes on November 17 together with industry insiders. Head of the Hungarian Association of Tobacco Industry Investors, Lóránt Dezső, said the campaign would involve posters, radio ads and newspaper articles drawing attention to the negative effects of black market tobacco sales. Károly Szabó, a chief director at NAV, said 85 million illegal cigarettes had been seized in the first nine months of this year, more than during all of last year. Data from

GET ENGAGED, GET UPDATED, GET NEW BUSINESSES, GET YOUR PLACE! More than 500 industry experts from the pharmaceutical and biotechnology manufacturing sector will meet for the fifth time on 25-26 February 2015 to find answers for the most pressing challenges the market is facing, to get an insight in to the novelties and to get new partners while having one-on-one business meetings. The regional and international media and association partners along with the programme advisory committee assures the highest relevance of the conference program, which will include the most up-to-date market insights into R&D, production, packaging, logistics, supply

chain and quality management-related topics. Keynote presentations and case studies will be presented by senior decision makers of prominent companies such as GE Intelligent Platforms, Baxter, Gedeon Richter, Zentiva, GSK Biologicals, FESTO, Aptar Pharma, Finesse Solutions, Lonza Biotec and many others. Some of the key topics in 2015 will include: • Industrial Internet Drives Productivity and Efficiency in the Life Sciences Industry • SmartFactories: Time and Cost Efficient Bio-Pharma from R&D to GMP • Trends and Growth Potentials of Biosimilars - Advantage or Threat?

• Supergeneric Drug Development • Strategies in the Development of Generic APIs • Continued Process Verification • Approaches for Process Optimisation, achieving Process Understanding by using PAT and Six Sigma • Injectables-elastomers Stoppers for Injectables • Safety Features on the Outer Packaging of Medicines • Partnerships between Wholesalers, LSPs and Manufacturers – How to diversify the services for manufacturers and how to improve the service level further? • End-to-end optimisation - How to

optimise manufacturing networks, how to closely cooperate between manufacturing and SCM? - Postponement strategies, e.g. postponement labelling The event will take place again at the luxurious 5-star Corinthia Hotel Budapest, in the heart of the city. For further information please visit our website: www.pharmconnect.eu or conact: Dalma Tabori International PR & Online Marketing Manager +36 1 219 5725 dalmat@tegevents.eu

WWW.BBJ.HU

News 05

Budapest Business Journal | November 28 – December 11, 2014

HUNGARIANS USE SOCIAL MEDIA TO SEEK EMPLOYMENT An international survey by Adecco, involving 17,272 collected responses from job seekers, reveals that 61% of Hungarian individuals looking for work use social media as a means of finding employment. Facebook is by far the most used social networking site for professional job seeking activities (40%), making Hungary one of the few countries that use LinkedIn less for this particular purpose. LinkedIn does, however, follow Facebook in terms of job search queries (24%). Among the various social networking sites, Facebook and LinkedIn are considered to be the only effective platforms in terms of matching supply and demand. A reported 33% of job seekers use social media to distribute their CVs online with 26% of the total number of job seekers being contacted through social media by a recruiter at least once. The use of social media for job search purposes is less common among those with a weak network ( both online and offline), and increases in proportion to the size of one’s network. FITCH SET TO REVIEW HUNGARY SOVEREIGN RATING Hungary’s sovereign debt ratings are scheduled to be reviewed by Fitch Ratings on Friday. European Union rules require rating agencies to submit an annual ratings review calendar for EU countries and Hungary is in line for a scheduled review by Fitch on November 28. All of the three major global rating agencies now maintain a stable outlook on Hungary’s sovereign ratings, with Moody’s Investors Service having upgraded its outlook on Hungary to stable from negative two weeks ago, bringing it in line with the others. Standard & Poor’s rates Hungarian sovereign long− term debt at “BB”, two notches short of investment grade and one notch below the “BB+” and “Ba1” ratings maintained by Fitch and Moody’s, respectively. As standard procedure, Fitch is expected to announce the outcome of its review on Hungary late on Friday, after European and U.S. markets have closed for the week. ADVERTISEMENT

Photo: Lajos Soós

market researcher GfK show the share of black market cigarette sales jumped to 11.8% at the end of last year from 5.8% in 2012. In July of 2013, Hungary initiated a state monopoly on retail tobacco sales, sharply reducing the number of outlets where smokers could buy cigarettes while also increasing cigarette prices.

FOURTH MASS DEMO A crowd estimated at more than 10,000 demonstrated outside the Parliament building on November 17 in the fourth large anti−government protest in about a month. This demonstration was organized by a group of students and young people and ran in parallel with more than 20 other protests against the Hungarian government on the same night, held across Hungary and abroad from Stokholm, to Luxembourg, Brussels, Berlin, Hamburg, London and Bristol. The demonstrators chanted slogans against Fidesz and Prime Minister Viktor Orbán in an event that was mostly peaceful, though some stragglers clashed with police after the official event ended. OECD PREDICTS SLOWED ECONOMIC GROWTH IN HUNGARY The Organization for Economic Cooperation and Development (OECD) projects that Hungary’s GDP growth would slow to 2.1% next year and to 1.7% in 2016 as a result of “tight credit conditions”, in its economic forecast published on November 25, adding that an “uncertain business environment” would limit investment. The projection

raised the ratio from the previous forecast of 1.6% published in May; however, it is well below the Hungarian government’s projection of next year’s GDP being approximately 2.5%. OECD expects Hungary ’s GDP to reach 3.3% in 2014. “Having absorbed the remaining cyclical slack, the economy is projected to slow, constrained by its pace of potential growth,” the OECD said, noting that exports would “remain strong”, but

investment growth was expected to be “modest”. The OECD acknowledged that the National Bank of Hungary ’s “Funding for Growth Scheme”, which supplies SMEs with cheap credit, had “gathered pace”; nonetheless, corporate lending is expected to “remain tight”. Private consumption in 2015 is expected to increase as a result of the compensation due to retail banking clients under borrowers’ relief legislation approved this summer, but the measure also increases the risk of further credit contraction by reducing bank profits. The OECD also warned, referring to the FX mortgage conversion law approved today, that the large and growing burden of the automotive sector on Hungarian manufacturing “could increase exposure to idiosyncratic shocks and thus output volatility ”. A weaker−than−expected eurozone economy could also reduce export growth, it added. The OECD said Hungary ’s consumer price index would average 2% in 2015, then rise to 3% in 2016 as the effects of household utilities price cuts wane. ORBÁN: EU IS A ‘STALLED PROJECT’ Hungary ’s Prime Minister Viktor Orbán dubbed the European Union a “stalled project” – and said that strong political leadership is needed to solve the continent’s problems, including high energy prices that stifle Europe’s ability to compete – in a speech Friday at a forum hosted in Baden−Baden by the German foundation for family entrepreneurs (Stiftung Familienunternehmen). Orbán said that alternative energy cannot be financed while nuclear energy is indispensable. He also said that if he succeeds in safeguarding Hungary ’s energy policy in Brussels, energy prices would become equal to those in the U.S. by 2018. Orbán acknowledged that Hungary is a a “political black sheep” but said it is also an “economic success story ”. He added that the Hungarian government “does not despise rich people, because to be rich is good and is an example to follow, and those who deliver and create workplaces should be encouraged rather than penalized with high taxes”. The Prime Minister said Hungary supports Ukraine’s sovereignty because “we also believe there should be something between Russia and Hungary ”. The prime minister said that immigration is not “a good thing” and Europe’s demographic problems should be addressed by nurturing a good family policy.

BBJ

2Business COMPANY TWO-THIRDS OF LAID OFF NOKIA WORKERS PLACED IN JOBS Two−thirds of the 1,149 Hungarians laid off at the Nokia plant in Komárom in northwestern Hungary that will shut down at the end of this month, have already been able to ﬁnd new employment, Szabolcs Pákozdi, head of the national job placement office OFKN, informed Hungarian news agency MTI on November 13. Pákozdi said 68 companies attended a job fair advertising more than 3,700 open positions for the laid off workers in September. Altogether 1,829 workers were laid off, 680 of them Slovakian citizens. Microsoft, which recently acquired Nokia’s handset business, announced in July that it would shut down the plant in Komárom, near Hungary’s border with Slovakia. TESCO MOBILE SIM CARD SALES TOP 200,000 Tesco Mobile, a 50−50 joint venture established by the local units of UK retailer Tesco and telco Vodafone, has sold more than 200,000 SIM cards in its ﬁrst two and a half years, company managers said on November 13. Tesco has 1.5% of the pre− paid SIM card market. People who purchased the cards have topped them up with HUF 1.7 bln, so far, said marketing director László Kiszely. They have also bought 80,000 handsets, he added. Tesco Mobile targets the 3.5 million regular shoppers at Tesco stores in Hungary. GOV’T, TAXI DRIVERS TO REGULATE UBER Hungary’s state secretary for economic regulation Bela Glattfelder has agreed ADVERTISEMENT

with representatives of taxi companies that the ridesharing service Uber should not be allowed a competitive advantage in acquiring fares, the National Economy Ministry reported on November 25. Uber is a ridesharing service headquartered in San Francisco, and operates in more than 200 cities worldwide. The company uses a smartphone application to coordinate rides between passengers and drivers. For rides in Budapest, the company advertises a base fare of HUF 300 and a HUF 130 per−kilometer fee, while under a decree dating to September 2013, the base fare for taxis operating in Budapest was set at HUF 450 with a per− kilometer fee of HUF 280. The decree, which also outlined strict requirements for vehicles, was aimed at promoting transparency on the market and weeding out unscrupulous drivers. “Participants at the meeting agreed that Uber should not be allowed a competitive advantage over honestly operating taxi services by failing to fully comply with the legal requirements for personal transport activities,” the ministry said in a statement. EPSON GLASSES AVAILABLE IN HUNGARY Epson is introducing its ﬁrst Augmented Reality (AR) device, dubbed Moverio, in Hungry, offering he potential for AR to developers looking to create apps for the consumer and business space, the company announced. Moverio enables a digitally enhanced view of the real world. Sensing technology, including a front−facing camera,

Photo: Peter Puklus

NEWS

PREZI GETS $57 MLN INVESTMENT Two American growth equity firms, Spectrum Equity and Accel Partners, have invested a combined $57 mln in Prezi, the presentation software company founded by Hungarians, CEO Péter Árvai, at center above, announced on November 19. Also shown here are the other Prezi founders, Péter Halácsy, left, and Ádám Somlai−Fischer gyroscope, GPS system, compass, and accelerometer, allows the device to accurately understand a user’s movements and the world around them. “From now on, this technology is also available in Hungary, thus leading the way for local developers towards building AR applications for entertainment and business purposes. This is expected to be a long−term process but we already see such exciting and well−functioning solutions that exceed our expectations,” said Gáspár Tőrös, Epson’s executive product manager for projectors. INVITEL EXTENDING INNOMAX GRANT Hungarian tele− and info−communications company Invitel is expanding its CSR program InnoMax grants to include schools from 2015, the company announced. The new granting scheme is dubbed InnoSchool and allows Hungarian elementary and secondary schools to apply with their tenders. The aim is to encourage educational institutions to engage in info−communication and raise awareness of smart devices, knowledge Invitel believes will be indispensable in the future. “Invitel is continuously seeking opportunities to offer efficient support to its clients,” Invitel’s Operative Chief Imre Mártha said, adding these grants not only support client needs, but also shape future generations.

BRUSSELS REVIEWS HUNGARIAN GOVERNMENT’S SUPPORT FOR AUDI EXPANSION The European Commission is reviewing €133.3 mln in state support for an expansion of German carmaker Audi’s base in Hungary, Hungarian daily Magyar Nemzet said on November 21. The EC conﬁrmed that a review of whether the support conforms to rules on state aid is underway. The National Economy ministry had conﬁrmed to the paper that the government had decided on “HUF 44.96 bln (€150.03 mln) in support, which at current values is equivalent to HUF 39.952 bln (€133.3 mln),” the newspaper said. The paper noted that the government earlier said it would support the investment with HUF 11.2 bln, about one−fourth of the size of the grant under scrutiny by Brussels. Audi launched production at the €900 mln expansion at its base in Győr in the summer of 2013. The added capacity has been a key factor behind Hungary’s growing industrial output and GDP growth. USTREAM WINS STREAMING MEDIA READERS’ CHOICE AWARDS Hungarian−founded online video streaming service Ustream has won “The Best Live Video Platform” title, part of the Streaming Media Readers’ Choice Awards, for the second time in a row, the company announced

WWW.BBJ.HU

2 Business

Budapest Business Journal | November 28 – December 11, 2014

on November 20. Ustream also won “The Best Video−based Advertising Solution” with its Ustream LiveAd service. “The two awards are a great honor, as they were voted on by our users,” said Ustream co−founder Gyula Fehér. “The success of LiveAd shows that our corporate users are also satisﬁed,” he added. Ustream has 80 million users worldwide.

the internet, helping advertisers save up to 36% of their advertising budget, according to IAB research. Enbrite.ly says its software as a service platform helps businesses to take appropriate action against wasteful spending by identifying bad quality sources or fraudulent actors cannibalizing their marketing budget, improving ROI across the board and restoring trust in their online customer acquisition efforts.

MASTERPLAST TO INVEST €400,000 IN EXPANSION Masterplast, one of the leading manufacturing and trading companies of thermal insulation materials in the Central and Eastern Europe, has announced that it will be expanding its plant in Szabadka, Serbia. The company is investing €400,000 of its own resources in the expansion and will launch trial production in its second glass fabric plant. Masterplast was established in 1997 and had revenues in excess of €81 mln in 2013. EXEDY ANNOUNCES HUF 7.3 BLN EXPANSION IN HUNGARY Japanese clutch and torque converter maker Exedy Corporation is spending HUF 7.3 bln to expand its base in Hungary, news agency MTI reported CEO Koji Akita as saying on November 19. The new plant will be completed by the middle of 2015 and production could start as early as January 2016, the CEO said. Yet further expansion is planned, he added. The investment will create 150 jobs. HOLCIM TO SELL HUNGARIAN UNIT Swiss−based building materials company Holcim is planning to sell its Hungarian unit as its recent merger with French peer Lafarge placed it in a dominant position in several European markets, Hungarian business daily Napi Gazdaság reported on November 19. Negotiations are currently underway between the buyer and Holcim Magyarország about a possible takeover of the company’s 16 Hungarian branch offices. The paper was informed that the potential buyer is a multinational group, and should the sale be approved by the parent in Switzerland, the transaction could be completed by the second half of 2015. Officials at the parent company’s Zurich headquarters conﬁrmed that there are talks underway on disposing of foreign subsidiaries including the Hungarian unit. SUZUKI TO START PRODUCTION OF VITARAS IN JANUARY Japanese carmaker Suzuki will start serial production of the new Vitara model in January next year, Magyar Suzuki CEO Ryoichi Oura announced at a press conference on November 18. The Hungarian unit will begin selling the new model next spring and they will export to all of Suzuki’s markets, he said, without

WIZZ AIR TOPS 100,000 FLIGHTS IN A YEAR Hungary−based low−cost airline Wizz Air, announced on November 25 that it flew 100,000 flights between November 2013 and the same month this year – the most ever in a 12−month period. The 10−year−old airline said in a statement that the 100,000 flights represents 30 billion seat kilometers and 1.3 million working hours, serving more than 15 billion passengers. “This is a milestone in Wizz Air’s history,” Operation Chief Diederik Pen said, adding: “Wizz Air is currently present in 36 countries and has recently announced the launch of 30 new routes.” revealing planned production ﬁgures. The parent company’s plan to introduce a new model every year could result in Magyar Suzuki launching production of a new model every 2−2.5 years, the CEO said. The Hungarian unit has wound up production of Splash and previous− generation SX4 models and the Esztergom plant is only making SX4 S−Cross and Swift models at present. Suzuki sales on Hungary’s new autos market reached 5,000 this year, up 27% year−on− year, beating the 20% rise of the market, sales director Róbert Krisztián said. Suzuki has a 7.4% share of the market, he added. Magyar Suzuki sales rose 11.6% to €1.567 bln last year. PANNERGY BOOKS NARROW LOSSES ON IMPROVED MARGIN Hungarian geothermal energy company PannErgy booked a HUF 383 mln loss in the ﬁrst

three quarters, down from a HUF 587 mln loss in the base period as margins improved, an earnings report published on November 18 reveals. The company’s revenue experienced a rise of 149% reaching HUF 1.56 bln, while direct cost of sales climbed just 108% to HUF 1.16 bln. PannErgy still racked up a HUF 78 mln loss at operating level. ENBRITE.LY WINS BIGGEST PRIZE AT SLUSH Hungary−based Enbrite.ly, which develops solutions to verify that online advertising spending reaches actual humans, won the biggest prize, €500,000, for any pitching competition to date at Slush 2014 in Helsinki. The funding is to be used to eliminate the “plague of advertising fraud from the online ecosystem”. Enbrite.ly ﬁghts ad fraud on

MAGYAR TELEKOM LAUNCHES CONTACTLESS MOBILE PAYMENT APP Magyar Telekom, the Hungarian subsidy of German telecoms giant Deutsche Telekom, launched a mobile payment application for near field communication− enabled smartphones, Hungarian news agency MTI reported on November 26. The app, dubbed “mobile wallet” in Hungarian, partners up with OTP Bank, MasterCard, SuperShop and InterTicket, with MasterCard providing the technology and security for the service. Users can also exchange loyalty points for rewards with SuperShop, and they can pay for event admission with the help of InterTicket. Telekom said that contactless payment is currently available at more than 20,000 points of sale in Hungary. The app’s test phase was launched in the summer of 2013 under the coordination of the Hungarian Mobile Wallet Association and with the participation of Hungary’s three largest mobile service providers. Vodafone is scheduled to offer subscribers mobile wallet services as of Q1 2015, the company said. Telenor informed MTI it would launch mobile wallet services “as soon as possible”. DUTCH ACCELL GROUP EXPANDS HUNGARY PLANT Bicycle manufacturer Accell Hunland Kerékpárgyártó, part of the Dutch Accell Group has built a more than HUF 600 mln new production hall at its plant in Tószeg, managing director Zsolt Steurer informed Hungarian news agency MTI on November 25. More than HUF 107 mln of the costs came from EU grants. The project preserved 118 jobs and added another 100, Streurer said. The plant puts out mid and high category bicycles, and sells its products mainly in Germany, Italy, Finland and the Netherlands. Most of the orders come from Winora, Haibike, Ghost, Batavus, Tunturi and ATALA. Accell Hunland had nearly €4.3 mln net income on sales of over €87.5 mln in 2013. Staff numbers vary between 230 and 550.

Let Corinthia be your home away from home this Christmas Celebrate Christmas in style at Corinthia! For anyone looking to spend Christmas in a superior environment enjoying top class service and memorable dining, then the Brasserie & Atrium Restaurant is the place to be! Winter wonder with a gorgeous Christmas Buffet Dinner on the evening of 24th and 25th from 6 pm and a sumptuous brunch on the 25th from 12 pm at the Brasserie & Atrium Restaurant. TABLE RESERVATION AND FURTHER INFORMATION: +36 1 479 4720 | CUISINE.BUDAPEST@CORINTHIA.COM

WWW.BBJ.HU

08 2Business

Budapest Business Journal | November 28 – December 11, 2014

Real Estate in Brief SKANSKA LAUNCHES NORDIC LIGHT OFFICE PROJECT IN BUDAPEST Skanska Property Hungary has started construction work on its seventh office building in Budapest, dubbed Nordic Light, on inner Váci út, the main office corridor of Budapest. Phase I is scheduled for completion in the first quarter of 2016. The complex will consist of approximately 26,200 sqm of leasable area and be built in two phases. The project has already been LEED pre−certified with a Gold rating thanks to its innovative solutions minimizing the building’s impact on the natural environment, Skanska says. During the design process, green and sustainable solutions received special attention, which not only minimizes the building’s environmental impact, but also reduces operating costs, which translate into lower bills for water and electricity, the company says. “Nordic Light is situated in a most vibrant office location, on the Váci corridor and offers great visibility to our tenants,” said Zoltán Linczmayer Managing Director of Skanska Property Hungary. “The state−of−art technologies of our building represent our commitment to the energy− efficient, environmentally friendly and healthy office spaces Skanska is famous for. With the design of the building, our aim was to create a workplace where people will love to spend their time.”

CPI GROUP SEES SIGNS OF RECOVERY CPI Group member CPI Hungary (formerly called Ablon) said on November 20 that it sees signs that the office market is recovering after an increase of 20% in leased premises in the Business Center 91 Office Building. “In the past year, almost 1,300 sqm of rental area has found a new lessee, and we can also report on an expansion of nearly 500 sqm,” said Adrienn Lovro, CPI Property Group country manager for Hungary and Romania. TRIGRANIT MARKS ITS 20TH YEAR The Hungarian Trigranit Development Corporation has celebrated its 20th year with a beach−front cocktail reception at MAPIC, the annual retail real estate expo in Cannes. Trigranit delivered the first class “A” office building in Hungary in 1995, followed by the Polus Center, the first Western−style shopping mall, in 1996. According to Trigranit, the property development and management company has undertaken 50 projects in 14 countries and developed 2.5 million sqm of gross leasable area. Based on the perception that “transport hubs need development” the company developed the 194,000 sqm WestEnd City Center retail, office and hotel complex. This multifunctional development concept has been transferred to countries including

Invitation PwC Hungary is pleased to invite you to the „Taxation trends and changes in 2015” morning seminar, which is jointly organised with the Budapest Business Journal (BBJ) and the British Chamber of Commerce in Hungary (BCCH). Date: 10 December 2014 9:00–10:30

Venue: Eiffel Palace Conference Center, 1055. Bajcsy-Zsilinszky út 78.

Language:

This event will offer you the opportunity to find out about the tax changes that will take effect on 1 January 2015. The English-language presentations by PwC Hungary’s leading experts will address the tax law trends in the context of Hungary’s macroeconomic situation and the impact that these changes will have on businesses.

Themes, Presenters:

The event will be held in English with no translation.

Stability but new taxes Paul Grocott, Partner, PwC Hungary

Participation fee:

The future of transfer pricing documentation - a three-tiered approach Anita Mekler, Director, PwC Hungary

By Friday, December 6. Free of charge. Registrations are accepted on a first come, first served basis. Participation is limited to a max. of 2 persons per company.

Further information Agi Fuleky +36 1 461 9309 agi.fuleky@hu.pwc.com

2015 tax law changes and practical issues Gergely Juhász, Manager, PwC Hungary

We look forward to your participation in the event!

Business Center 91 Office Building.

Poland, Croatia and Slovakia. “Poland is Trigranit Development Corporation’s prime focus today, but the company has projects under development in Croatia and Slovakia and monitors many other countries in the region,” said the company. A recent delivery in Poland is the Bonarka City Center in Krakow, which includes a retail and entertainment center on the site of an old textile factory. A further three office towers are under construction at the site. In another project, Trigranit is developing the Poznan City Center, consisting of a retail, entertainment and transport hub in cooperation with the

Polish Railway Company. In the mid ’90s the Trigranit Management Company (TGM) was founded and is now active in 14 countries with €3 billion of assets under management. “2014 was a special landmark in our history. Firstly, we opened up business in the MENA [Middle East and North Africa] region with a mandate to lease Cleopatra Mall in greater Cairo, providing more than 115,000 sqm of GLA. Secondly, we have just signed a letter of intent with our Chinese partners heading towards one of the world’s largest retail markets,” said Philip Evans, CEO of Trigranit Management.

WWW.BBJ.HU

2 Business

Budapest Business Journal | November 28 – December 11, 2014

Real Estate

Sustainability, efficiency and green offices An interview with András Schmidt, Sustainability Manager, Skanska Property Hungary Ltd. How do you define “sustainability” – in terms of the design, planning, construction and property management processes? I would like to refer to the Skanska website: “Sustainable Development can be defined in many ways. Common definitions include meeting the needs of the world today without compromising the ability of future generations to meet their own needs. In financial language, it means living on income rather than consuming finite capital. In family terms, it means not cheating on our children.” Translating this to our business it means that property management processes must be balanced environmentally with regard to social and economic performance in order to achieve positive long term results. Our Sustainability Agenda clearly defines our responsibilities. How central is energy efficiency? Energy efficiency is one of the key elements of our business, however water efficiency, CO2 emission, sustainable material use, quantity of waste, indoor

environment, thermal comfort and other core indicators have the same importance. How important is green accreditation for the success of a building with regard to: 1. the design and planning process, At the early stage of the design concept we implement LEED criteria in order to minimize the extra cost of design and construction. 2. the acquisition of a building permit, We have to prepare energy calculation based on local regulations but there is no direct connection to green accreditation. We have to fulfill the local EPB code. 3. the letting process, This is a key element, especially if we emphasize the significance of thermal comfort and the indoor environment which is fundamental for productivity. 4. property management and providing for tenant needs Any good level of certifications contributes to easier PM and evaluates the tenant’s need. 5. and ensuring sale to an investor? Green buildings have added value and this is a minimum requirement of investors.

In addition to occupancy rates, terms of contracts, location and building quality. What accreditations are you aiming for with your 2015 pipeline projects? Nordic Light project will be certified LEED Gold Core and Shell version 2009. The LEED procedure has already started and according to the time schedule we may be awarded the final certification in 2016 Q3, some months after hand over of the project. What proportion of 2015 pipeline class A offices in CEE are green accredited? If we assume that the trend for LEED certified buildings will have linear growth, based on the 2013-2014 period the expected number of LEED certified buildings will be approximately 60-70% more than the previous year in the CEE region. The number of accredited buildings could be around 500 in 2015 if we use same methodology with BREEAM certified buildings. BREEAM will possibly be more common in our region in the near future. However all building assessment methodologies have a common platform: the sustainability criteria level. LEED is an excellent tool when you have companies from the US or Sweden, BREEAM is possibly more appropriate to evaluate buildings using local or European standards.

Is the standard and efficiency of buildings now on a par with Western Europe? All countries have local Energy Building Performance regulations based on European directives. Our regulations are the 7/2006 TNM and 40/2012 BM orders. These orders only regulate the energy performances of different types of buildings and it has to be developed in order to reach the final Net Zero Energy target for buildings in 2020. A remarkable initiative is the effort of the World Green Building Council (WGBC) to introduce a new European building assessment system. On September 25 2014, the Hungary Green Building Council (HuGBC) and WGBC held a workshop in Budapest and the topic was “EU Framework for Sustainable Building Assessment”. We have been waiting for this initiative, a common European tool for building assessment. My expectation is that this system will be introduced as early as possible but of course taking into consideration the proper selection of the core indicators.

Nordic Light

A building for people. Energy and cost efﬁcient solutions in a great work environment. 96-98 Váci Road, 1133 Budapest, Hungary +36 1 382 9100 | www.skanska.hu

WWW.BBJ.HU

2 Business

Budapest Business Journal | November 28 – December 11, 2014

AmCham and GE mark 25 years in Hungary

Photo: Márton Magócsi

An event in Parliament celebrated a quarter century here for AmCham, and one of its founders, GE. It was also a time to reflect on the past, future and present of Hungarian− American relations. AmCham Hungary and GE, one of the chamber’s founding members and the largest U.S. investor in Hungary, celebrated 25 years of operations in this country with a gala event in the Upper House of Parliament on November 14, attended by more than 500 guests, including the Prime Minister of Hungary, two other ministers, the ranking official at the American embassy, the chairman of AmChams in Europe, and many former chamber presidents. While the emphasis was rightly on anniversary celebrations, the presence of Prime Minister Viktor Orbán and U.S. Embassy Chargé d’Affairs André Goodfriend in the same room added an intriguing subplot, given the on−going friction between the nations over a travel ban on six Hungarian officials, most notably the head of the tax authority, on charges of alleged corruption. In the end Orbán avoided any point scoring in his speech, instead talking up Hungary’s Euro−Atlantic alliances and friendships, which prompted Goodfriend to tweet afterwards: “Words of friendship and a handshake. Perhaps there will be constructive action too.” The evening opened with an address from AmCham President Willy Benkő, who spoke of the power of “E−squared”: encouragement and energy. He remembered a phone call he received from the then commercial attaché of the U.S. Embassy, which “encouraged me to get engaged” with AmCham. Engagement was a better word, he thought, than involvement. “Involved means showing up; engaged means ‘how can I help’ ?” Benkő quoted from the very first AmCham newsletter, a four−page affair produced in February 1990. Its back was given over to an interview with the late Ferenc Mádl, then chairman of the drafting committee of the Hungarian Foreign Investment Law, later President of Hungary. “Come to Hungary. Stay in Hungary. I think it will prove worth your while”, it concluded. “President Mádl, if you can hear me, we came to Hungary, we were encouraged, we were engaged, and we stayed,” Benkő said. AmCham CEO Írisz Lippai−Nagy introduced the chamber’s new streamlined focus built around three strategic pillars: knowledge, network and advocacy. “Hungary needs to grow with the region, and the region needs to grow with Hungary,” she said. Describing AmCham as a “divergent yet very powerful business community” that acts as “a synthesizer and an amplifier”, she said the board wants to see the country and region make a ten−spot improvement in world competitiveness rankings in ten years.

Photo: Todoroff Lazar

ROBIN MARSALL

AmCham CEO Írisz LippaiNagy on the podium. Above is a group shot of the event.

There may be debates ... (but) ... we are two political allies. “We are working closely on a structured policy agenda with our professional committees and government decision makers, as strategic partners,” she said. “This policy agenda will be shared with you early next year, and will act as our advocacy roadmap in 2015.” Nani Beccalli−Falco, President of GE Europe, somewhat reluctantly describing himself as a “40−year veteran of GE”, said he remembered “very well when GE made its initial entry into the market when it purchased Tungsram”, a deal announced on November 15, 1989. He went out of his way to pay tribute to both the country and its leaders. “I really want to acknowledge the support Hungary’s government has given our company for all this time. It was a very important factor in our decision to open our GE Global Operations Center here [in February]. It is also a tribute to the talent we have here.” But he was also keen to talk up the region, and a strong, unified Europe. “Prime Minister Orbán, I see great opportunities for this region. Central and Eastern Europe has the ability to be a hub for Europe.” Calling

himself a “profound believer in the EU”, he described (with apologies to the U.S. dignitaries present) the second industrial revolution of the early 20th century as having been “kidnapped by America”. He wants to ensure it is Europe that takes center stage in the coming third revolution, where digital processes, data usage and new technologies all meet. “We must work towards a strong, integrated Europe, we need to be able to create a Europe that has a common strategy in every field; in fiscal policy, in security, in foreign policy. We need a Europe that is not going to look like the United States, but is powerful and strong. Not a single European country, not even Germany, will be able to compete alone against China on one side and the Unites States on the other.” He ended with a rallying cry: “I am very ambitious about the future of Europe. I will work to make sure Europe is strong.” ORBÁN: THE ‘FRIENDSHIP’ IS CLEAR After a round table discussion involving representatives of Bosch, GE, MOL Group, and Morgan Stanley, who agreed there was a need to “rebrand and reposition” the region and to continue to develop and make full use of Hungary’s outstanding human resources, it was time for Orbán, who invoked what he called “one of the few privileges of being prime minister” and spoke in his native Hungarian. Anniversaries such as these are a chance to pause and make sure you can “see the wood for the trees”, he said. “From here, it is clear that there may be debates and controversies – say between the

governments of Hungary and the United States – but in actual fact, we are two political allies. There may be reservations and disputes between U.S. corporations and regulatory authorities – be they tax or competition authorities; but from this vantage point, at an elevation of 25 years, one can see with perfect clarity that Hungary and the United States are good economic partners. And while there may be debates on ideology or values in relation to what is progressive and what is not, or what the future holds for families, religion or nations [‥.] one can clearly see that there is friendship between the American and Hungarian peoples that is based on respect.” Like the president of GE Europe, Orbán is optimistic about the future: “Many people feel that the future is something dangerous, which holds a great many threats – as yet unknown. But there are those of us who believe that the future has fantastic potential. The future is something incomplete, and it is we who can decide what it should be: an opportunity, inspiration, attraction, hope, knowledge and innovation.” And like the president of GE Europe, Orbán has faith in the region. “Everyone in Central Europe knows – because our history has taught us this – that we must adapt, change, create, recreate and renew ourselves day after day,” he said. “Great innovations, new social and economic organizational solutions, and new [‥.] business opportunities will emerge here, in this region, in Central Europe, with Hungary as part of it.” Although it was not explicitly couched in those terms, there was also what appeared to be a justification for Hungary’s policy towards Russia, which has raised eyebrows in Brussels and Washington. It is notable that the ideas expressed here have been used in several speeches since. “I was born in the Cold War, grew up in it, and my youth was spent in it,” Orbán said. “There is not a single sensible person in Hungary, Central Europe or Europe as a whole who would want to see a return to that. We who live on this continent want to see the observance of international law, peace, cooperation and the economic prosperity that results from these. We shall never abandon this dream. We do not want to end our lives the way they started. We do not want European peace, welfare and prosperity to be reduced to a mere intermezzo between two cold wars. We want a European policy that makes everyone see their interest in the advancement of Europe.”

WWW.BBJ.HU

2 Business

Budapest Business Journal | November 28 – December 11, 2014

SAP supports students with University Alliances Program German multinational software corporation SAP launched its University Alliances Program (UAP) for students to learn about SAP software solutions, participate in innovative events and design thinking events five years ago in Hungary. Students can get involved in co-innovation projects and even in the research and development of new SAP solutions. With education a key to innovation, growth, social development and sustainability, UAP not only targets students, but professors and teachers as well. CHRISTIAN KESZTHELYI

“UAP opens up the world of SAP to more than 1,800 universities in more than 80 countries worldwide, and aims to develop highly qualified graduates with critical skills for the 21st century workforce,” explains Adam Dudits, Director of SAP UAP in the Central and Eastern European region. He adds that another important objective of UAP is to raise awareness of SAP as a dynamic, cutting-edge company for professors and students around the world. ADVERTISEMENT

The program has a broad scope in terms of products. It not only offers access to the most-frequently used solutions, which made the company the backbone of the enterprise IT world years ago, but also the latest technology, such as mobile, business intelligence, and so-called HANA products, among others. HANA is an in-memory platform, which can help solve the challenge of big data challenge – the hottest topic for the IT world currently. According to a study, 4.4 million IT jobs globally will be

created to support big data by 2015, so it represents a big opportunity for gifted talents. SAP plans to further grow the elements of its program. According to Dudits, the cloud version of HANA will be made available for students to develop their own applications on top of it. “The HANA Cloud Platform is a solution that is being implemented by leading companies around the world, and is spreading, so when students become jobseekers, they will be in unique positions,” stresses Dudits. The UAP program also offers more than 60 online courses for educational purposes. Educational material is available in both English and German, although teachers and professors are available to prepare translations for local education. On completing the program, students will receive an internationally recognized certificate. But not only education and development that are fostered by this program: So are entrepreneurship and innovation. “If we can inspire a student to form a startup company leveraging SAP technologies, we also count this as a success,” says the regional director. Networking is also an advantage that students and universities can benefit from. As SAP became a global player, its stakeholders can

Ádám Dudits exchange thoughts and ideas through the University Alliances Community, bringing together more than 17,000 professors and hundreds of thousands of students from member institutions all around the world. UAP has been available in 10 Hungarian universities and based on the win-win situation this program offers, Dudits expects more institutions to join.

BBJ

3Special Report A good year for retail

Retail

RETAIL SALES BY MAJOR COMMODITY GROUPS (%)

RETAIL TRADE IN HUNGARY (IN MILLIONS OF HUF)

2014 Q1

UNADJUSTED VOLUME INDICES ON RETAIL SALES (SAME PERIOD OF PREVIOUS YEAR=100) 2012.

2013.

Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec.

101 100.1 100.6 96.9 97.3 98.8 97.9 97.7 96.1 97.2 95.9 96,6

Jan. Feb. March April May

97.2 97.6 99.5 100.6 102.2

BBJ STAFF

As the economy recovered, and Hungary’s GDP grew at a lively clip in 2014, retail sales also grew to healthy levels. Year−on−year figures showed positive improvements throughout the year, and the latest numbers show that trend continuing. The volume of retail sales saw a year−on−year rise of 4.5% in September, with a y.o.y. increase in sales of 2.4% for food, drinks and tobacco stores, a rise of 5.9% in non− food retail trade and a rise of 7.6% in

June July Aug. Sep. Oct. Nov. Dec.

2014.

Jan. Feb. March April May June July Aug. Sep.

99.1 103.1 102.9 102.7 104.5 106 104

106.2 106.7 106.4 109 104.9 104.1 102.5 102 105

automotive fuel retailing, the Central Statistics Office (KSH) reported on November 26. Retail sales growth accelerated by 2.5% in each of the previous two months. Retail food sales rose an adjusted 2.4%. Non−food sales were up 5.9% and vehicle−fuel sales increased 7.6%. In January−September, retail sales rose 5.1% according to calendar− adjusted data and 5% according to unadjusted figures. Food sales rose an adjusted 5.4%, non−food sales were up 4.9% and vehicle−fuel sales increased by 4.9%.

Food

28.19

26.74

Alcoholic beverages

3.20

3.66

Non−alcoholic beverages

2.85

3.24

Coffee

1.01

0.85

Tobacco

6.41

6.32

Pharmaceutical and medical goods

6.15

5.13

Cosmetics and toiletries

3.58

3.40

Textiles, clothing goods

4.38

4.23

Footwear, leather goods

1.74

1.89

Furniture

1.17

1.15

Household articles of textile materials

0.65

0.6

Lighting equipment

0.68

0.67

Household articles

0.87

0.82

Durable electrical household appliances

0.77

0.83

Small domestic electric appliances

0.75

0.73

Radio, TV and video equipment

0.71

0.68

Audio, video tapes and discs

0.17

0.12

Hardware

1.73

1.91

Sanitary equipment

0.75

0.96

Do−it−yourself materials and equipment

0.63

0.81

Building materials

2.27

3.66

Paints, resins and lacquers

0.54

0.79

Books, news, stationery

1.47

1.2

Information processing equipment

1.15

0.83

Photographic, optical and precision equipment

0.51

0.53

Wallpaper

0.05

0.06

Floor coverings

0.16

Household fuel

0.2

0.15

Cleaning materials

1.84

1.68

Second−hand goods

0.3

0.35

Phones

0.65

0.55

Watches, clocks and jewelry

0.29

0.31

Sports articles, games and toys

1.04

1.16

Automotive fuel

18.07

18.81

Other articles

5.08

5.02

Retail trade, total

100

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

Legislation has big food chains reeling The tax on larger FMCG retailers and plans for a Sunday closing law looks like a one−two punch against foreign chains.

CBA Communication Chief Attila Fodor told the Budapest Business Journal, adding that CBA would also have to close most of its stores as a result of the law. Fodor said CBA believes that Sunday closures would not result in layoffs. On the contrary, because the rest of the week would see such big traffic, retailers would need to hire more employees. “We guarantee that our employees will not experience a drop in their wages, and would not by laid off as a result of Sunday closures,” Fodor added. But the Association of Hungarian Retail Stores (MBSZ), which represents 35 retail stores and 119 hypermarkets operating on a total of 2 million sqm, did not agree. “The law would result in layoffs involving 15,000−20,000 workers, while a further 15,000−20,000 workers would be hurt in the second wave of decreasing salaries,” according to MBSZ’s official press release published on November 20. “The support of some Hungarian chains for Sunday closings is not based on facts or considerations of market reality, and the proposed law will lead to layoffs and price hikes.” According to the press release, the real reason that CBA and other Hungarian firms support the Sunday closing is that they in fact have many stores that would be able to stay open on Sunday, while all of their larger competitors would stay shut. László Baldauf, who is reputed to be a major campaign contributor to Fidesz, and is said to have a good relationship with the government, owns CBA. According to Fodor, CBA has been included in consultations on the law, but so have others. “The National Economy Ministry is constantly consulting and negotiating with players of the market and professional associations,” Fodor said.

CHRISTIAN KESZTHELYI & ZSÓFIA VÉGH

In what looks like a one−two punch against foreign supermarket and hypermarket chains, Hungary passed a tax law that is expected to hit the foreigners hardest and has begun toying with a Sunday closure law that also seems to favor smaller local firms. “Retail shops operating in the framework of a Hungarian franchise, and their business models, are put in a significantly advantageous position in terms of competition in the newly introduced tax system,” said Róbert Dezső an associate with Szecskay Attorneys at Law. The tax law, passed November 18, includes an increase in the “supervision fee”, a special sectoral tax first levied on food markets in 2012. In 2014, firms in the fast−moving consumer goods (FMCG) sector had to pay a 0.1% tax on revenues to cover the supervision fee. In 2015, the tax will be bracketed, with firms earning less than HUF 500 million in net sales owing nothing. Firms making more than HUF 300 billion in revenues – a group that included only Tesco and SPAR in 2013 – will pay 6% on revenues. Because Hungarian firms CBA and Coop operate each store on a franchise basis as a separate business unit, they can claim to be in the lowest, non− paying bracket, even though CBA reported revenues of HUF 23.479 bln in 2013 and Coop HUF 10.919 bln The reaction from the big retailers has been predictably swift and negative. On November 18, food retailer SPAR, Hungary’s fifth largest employer with 13,000 employees, announced in a press conference that it would suspend its planned and ongoing investments in the country and is considering structural changes to remain profitable. The group said it laments the increase of the supervision fee payable to the Food Safety Chain Agency. SPAR said in a press release that it paid a HUF 320 mln in supervision fees in the past years, and this amount might now be as high as HUF 9 mln. Last year, the firm said, it paid HUF 26 mln in tax overall. Present in Hungary for 23 years, SPAR officials said they were not considering leaving Hungary, having invested €500 mln here thus far. Yet with the package passed, it is likely to suspend most of its development, including establishing a training center. “We had just convinced the board on the necessity of the meat plant development in October,” said Gabriella Heiszler of SPAR Magyarország. The company was going to invest €6 mln overall in the plant development, a new cold−cuts machine and the establishment of a center where SPAR would train its butchers and meat plant workers. This latter is sure to be postponed, SPAR said, and a decision on the other developments is pending.

Lidl: All should share the burden.

SPAR: Developments on hold.

TESCO: Will do all it can, but may be forced to raise prices.

Tesco was more circumspect, but equally negative: “Tesco is currently investigating the possible effects of the recently approved laws. As the new laws are posing a serious burden on a few yet very important players of the retail sector, Tesco might be forced to raise prices, but we will do everything to keep prices as they are,” a statement from its press office said. SUNDAY CLOSURE PROPOSED Along with the newly passed tax law, foreign chains are also concerned about a proposal to prevent large retailers from opening on Sundays. The bill was introduced by the Christian Democrats, the junior partners in the ruling coalition,

and was originally dismissed by Economy Minister Mihály Varga as bad for business, but has since been gaining traction, especially given a provision that would allow shops smaller than 400 sqm, or shops run by families, to stay open. CBA, Coop and Reál, the biggest Hungarian based chains, said in a joint statement on November 18 that they back the recently proposed bill because they want their employees to be able to rest on Sundays. “We support the initiative because a survey revealed that 87% of our employees, approximately 30,000 of our employees, would be happy to stay out of work and spend time with their families on Sundays,”

‘SIGNIFICANT BURDENS’ So far the biggest players in Hungary’s FMCG market – Tesco, SPAR, Auchan and Lidl, in that order – seem far from happy with the taxes, and the Sunday closing proposal. “The laws passed on November 18 and the proposed bill considering Sunday closure place significant burdens on both the retail sector and food market of Hungary,” Lidl PR Chief Judit Tőzsér told the BBJ. “Lidl Magyarország Bt. has significantly contributed to the development of Hungary in the past 10 years. Currently it operates 161 stores, employing a staff of 4,000 and offering chiefly Hungarian goods. During the past few years, Lidl has invested HUF 160 bln and paid HUF 39 bln in taxes in 2013,” she said. “The recently passed laws and the proposed bill will certainly affect the operation of Lidl, however we will do everything to minimalize its effects on our customers.” Tőzsér added, “Lidl takes part in contributing to Hungary’s public burden, however the extra burden can be considered acceptable only if every player of the industry/market is equally involved.” SPAR said it is against the Sunday closure proposal as well. “Last Sunday I visited several SPAR outlets and they were all full,” Heiszler said. “Hungarians don’t shop as a past time: The current standard of living doesn’t allow for that. If the legislation is passed, traffic will likely concentrate on other days.”

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

Mall managers under pressure to maximize As the recession in retail recedes, local shopping centers are scrambling to accommodate expansion plans of major chains. ZSÓFIA VÉGH

Crowded: WestEnd Mall.

With retail sales on the rise, major shopping chains are seeking to increase the size of their stores, and local malls are looking to accommodate them, but the amount of available floor space is limited. Mall managers are attempting to solve the problem by making “quality changes” to their tenant mix – pushing out smaller shops to add space for the big ones. Following a pause that lasted almost five years, many international retail stores have been given the green light to expand in 2014. These chains, major tenants of Budapest malls, are now looking for larger retail spaces to move to, but are having difficulty finding it. Malls in prime locations such Mom Park, Aréna Plaza, WestEnd and Allee are all operating at near−100% occupancy rates. Space is available in the less popular malls, but these international brands don’t take risks; they only set up

in malls where consumption and footfall are guaranteed. Facility managers have responded by making quality changes, swapping smaller – often less reliable – tenants for larger brand names. A good example of conscious brand building is MOM Park. The center has a line−up of high−end and premium brand tenants, and quality food−related units. MOM is now filled with restaurants and cafés, which have helped convert it into a business meeting point. The owners feel there is room for fashion brands such as Zara, and that electrical goods stores could also be a good match. MOM’s owners follow the patterns of a similar−sized shopping center in Warsaw, which is a hub for businesspeople and customers with higher incomes. While luxury brands may not appear in this (or any) mall, premium names often wind up there. “Many of our premium brand clients insist on a high−street location at first. Yet when they are presented with the figures, they change their minds and agree on opening a store in a shopping center,” Melinda Szilágyi, senior negotiator at the retail team of Cushman & Wakefield told the Budapest Business Journal. With a large proportion of premium brands, MOM is not the most expensive location in Budapest: rent ranges between €30−65/ sqm depending on location.

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

floor space Aréna Plaza is another center that has recently undergone a significant makeover. Tenants have been rearranged based on product types: shoes, fashion items, etc. are now placed on same sections within the mall. Overall 30 shops were concerned. Two international fast−fashion chains have doubled their space: both H&M and Zara now have two−floor/duplex stores of 2,500 and 2,600 sqm, respectively. As of October, the center houses premium brand Massimo Dutti, which is essential to maintain customer traffic at a mall that has no direct access to public transport. Arena, being a “car mall”, attracts better−off customers, so premium brands are a must. Shoppers stay longer in this center (100 minutes) and spend 2.5 times more (HUF 13,000) than the market average, a recent survey by GFK reveals. In rent terms, however, WestEnd City Center takes the lead. One of the forerunners of shopping malls in Budapest (and for a while the largest in the region) can charge higher rents than, say, MOM Park, due to its excellent location. Location is key for Hungarian customers, 46% of whom would rather go to a nearby mall than travel farther to a larger shopping center, CBRE’s survey on consumer shopping habits found. With many long−term contracts expiring recently, the center is apparently parting with some existing tenants to achieve a ADVERTISEMENT

PUSHING BACK FROM THE EDGES OF TOWN The 15−year−old Campona shopping center in southwest Budapest – shown at left – has welcomed new tenants this fall. Since the beginning of 2014, CBRE is responsible for leasing and facility management at the Campona and Pólus malls. The owners of both centers have proved open to expert advice. As a result, tenants such as Sporstdirect, KIK, KFC and Tally Weijl have opened outlets in the centers and others have revamped their stores. The idea behind the Pólus Center’s renewal, which finished in September, was to attract a health−conscious circle, while Campona, with its Tropicarium attraction, is focused on families.

more quality brand assortment. “At the end of the nineties, numerous small−size stores opened while today’s trends demand large areas,” said Krisztina Deutsch, director at leasing at WestEnd. Some older, less popular shopping centers are also undergoing facelifts. Új Udvar, a shopping center at Bécsi út in the third district, announced makeover plans this summer. The new owner (who also owns the popular Gozsdu Udvar in downtown Pest) introduced the country’s first bed movie and a floor for Hungarian artisan food and design products. Új Udvar aspires to attract the wealthy residents of District 2, and says it plans to capitalize on the fact that the neighborhood lacks a decent shopping center. The reason for growing demand is the

demise of new developments. Since the opening of Árkád 2 last March, no new shopping center has been built. There are only two major projects in the pipeline: Futureal Development Zrt.’s shopping center at Etele tér (Buda’s district 11) and another one by ECE Projektmenedzsment Kft. at the corner of Szentendrei and Bogdáni roads (district 3). This latter has been postponed several times – the decision is reliant on domestic consumption, the management said earlier. Futureal’s development at the terminus of metro line 4 is set to start as soon as the company has managed to pre−let 40% of the 40,000 sqm retail space available – the necessary precursor to securing the bank loan, CEO Tibor Tatár said. If built, both shopping centers would benefit from two types of

customers: the more well−off inhabitants coming from Római Part, Hegyvidék, and Törökbálint, and the masses from nearby housing estates. This combination is likely to attract tenants from premium brands and daily consumer goods segments as well. Despite the rise in domestic consumption, tenant expansion is limited to tried and tested locations. A rise of a few percent points is hardly enough for developers to embark on large speculative projects – current demand is still too weak to fill a 40,000 sqm space. “Legislation changes under approval hold a great deal of uncertainty and can impact consumers spending significantly,” Zsolt Kákosy, head of asset services at CBRE said. “If current trends uphold, we expect a moderate growth in retail investments.”

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

Retail property market livening up Deals are being made in Hungary, while new development is taking place elsewhere. DAVID LAWRENCE

Strong retail demand fundamentals are positively impacting sentiment with regard to retail investment in Hungary as distinct signs of a recovery in the Hungarian investment market are evident and a number of deals are on the cards. While new development seems to be more common among neighboring countries, there are deals going on here. With regard to possibilities in the retail sector, the portfolio owned by the German investor AEW Europe, including the 27,000 sqm MOM Park in Buda, is available to investors. Earlier in the year, the Dutch ING Real Estate sold its remaining 50% stake in the 47,000 sqm Allee shopping center in central Buda to Nationale−Nederlanden for a reported €95 million. In another deal, the Mosaic Park Center Park portfolio was purchased by the British investor Revetas for €44 mln. “Some specialist investors are keen on retail as the sector is seen as at the bottom ADVERTISEMENT

Aréna Plaza.

of a cycle with improving micro−economic indicators and rising sales volumes,” said Benjamin Perez−Ellischewitz, Head of Capital Markets at JLL Hungary. Prime Budapest shopping center yields are put at 7.3%, compared to 5.5% percent for the high performing Warsaw retail sector and 6% for Prague. Retail and office are traditionally the most preferred CEE investment destinations; retail is gaining ground on the office markets in terms of transaction volume with a number of big deals said to be in the pipeline. CBRE put CEE regional investment volume for the first three quarters at €2.12 billion for office compared to €838 mln for retail and €738 mln for industrial. “There are a number of transactions in the CEE retail investment sector in the pipeline with expected closing before 2014 yearend. We

MOM Park.

anticipate that total retail investment volume in the CEE region will reach €1.75−2 bln in 2014,” said Agata Sekula, Head of CEE Retail Investment at JLL. DEVELOPMENTS AROUND CEE In Hungary, no new shopping center developments are expected to commence next year; the next mall deliveries will not be until at least 2017 given the lead in development period. Total shopping center space in CEE increased by 1.4 million sqm to 59 million sqm at the end of the first half of the year; the region now leads European shopping center development. In the first half of 2014 there has been what Cushman & Wakefield describe as “an uplift in consumer sentiment”. The majority of development is

in the Russian and Turkish markets, which are expected to constitute around 80% of deliveries for 2014. The top five pipeline countries for the second half of 2014 and 2015 are Russia, Turkey, Poland, Romania and Croatia. Poland has 9.3 million sqm in the pipeline, Turkey 9.5 million sqm and Russia 4.57 million sqm. “Four big projects are planned in Warsaw and there have been two recent deliveries in the Czech Republic and a major delivery in Slovakia,” concluded Jonathan Hallett, Head of CEE Retail at C&W. “However, the Hungarian retail market is stagnating and I see no new developments starting in 2015−2016. There is a lot of investment money looking at retail in Central Europe, firstly at Poland and Czech and followed by Slovakia, then Hungary, and then Romania,” he added.

WWW.BBJ.HU

Budapest Business Journal | November 28 â&#x20AC;&#x201C; December 11, 2014

Largest shopping centers in Budapest RANK

Ranked by net retail space

COMPANY WEBSITE

Ă RKĂ D SHOPPING CENTER

ARENA PLAZA SHOPPING CENTER

KĂ&#x2013;KI TERMINĂ L

MAMMUT SHOPPING AND ENTERTAINMENT CENTER

www.arkadbudapest.hu

www.arenaplaza.hu

www.kokiterminal.hu

www.mammut.hu

WESTEND CITY CENTER

LURDY HĂ Z SHOPPING AND OFFICE CENTER

www.westend.hu

www.lurdyhaz.hu

ALLEE SHOPPING CENTER

SAVOYA PARK

www.allee.hu

www.savoyapark.hu

PĂ&#x201C;LUS CENTER SHOPPING CENTER www.polus.hu

DUNA PLAZA

CORVIN PLAZA

MOM PARK SHOPPING CENTER

EUROPARK SHOPPING CENTER

EUROCENTER-Ă&#x201C;BUDA SHOPPING AND ENTERTAINMENT CENTER

www.dunaplaza.hu

www.corvinplaza.hu

www.mompark.hu

www.europark.hu

www.eurocenterobuda.hu

NET RETAIL SPACE (SQM) NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

NO. OF LEVELS NO. OF RETAIL UNITS NO. OF PARKING SPACES

MAIN TENANTS IN 2013

ADDRESS PHONE FAX EMAIL

68,000

Âť Âť

3 200 1,600

Van Graaf Inditex Group (Zara, Bershka, Stradivarius, Pull&Bear), Media Markt, Interspar, Hervis, Libri, H&M, C&A, GAP, Mango, Humanic, Deichmann, New Yorker, Tchibo

1106 Budapest, Ă&#x2013;rs vezĂŠr tere 25. (1) 433-1400 (1) 433-1401 info@arkadbp.hu

&XVKPDQ :DNHĂ&#x20AC;HOG .IW 1052 Budapest, DeĂĄk Ferenc u. 15., (1) 268-1288, (1) 268-1289, ZZZ FXVKPDQZDNHĂ&#x20AC;HOG FRP

64,000 â&#x20AC;&#x201C; 185,000

2 200 2,800

Âť

1087 Budapest, Kerepesi Ăşt 9. (1) 880-7010 (1) 880-7070 kinga.voith@arenaplaza.hu

129$,3 ,QJDWODQÂ ]HPHOWHWpVL .IW 1191 Budapest, Vak BottyĂĄn utca 75/a-c, (1) 919-1300, (1) 919-1320, www.kokiterminal.hu

59,000 7,000 200,000

3 150 1,600

Promod, Orsay, H&M, New Yorker, &&& 0DULRQQDXG +HUYLV 2IĂ&#x20AC;FH Shoes, Players Room, Libri, MĂźller, Yves Rocher, Swarovski, Tchibo, Euronics, Tesco, OBI, DM, Deichmann, Rossmann

1191 Budapest, Vak BottyĂĄn utca 75/Aâ&#x20AC;&#x201C;C (1) 919-1300 (1) 919-1320 info@kokiterminal.hu

56,000 105,000

Âť

7 330 1,200

Âť

1024 Budapest, /|YĹ&#x192;Ki] XWFD Â˛ (1) 345-8000 (1) 345-8005 mammut@mammut.hu

:HVW(QG ,QJDWODQKDV]QRVtWy pV h]HPHOWHWĹ&#x192; .IW 1062 Budapest, VĂĄci Ăşt 1-3., (1) 374-5617, (1) 374-6536

50,700 16,605 200,000

3 400 1,930

Media Markt, Spar, H&M, Cinema City - 4Dx, Drogerie Markt, Mango, C&A, Salamander, Starbucks, Bershka, Pull&Bear, Geox, Nike, Massimo Dutti, Zara, Stradivarius, G-Star Raw, GAP, Scotch&Soda, Deichmann, Vapiano

1062 Budapest, VĂĄci Ăşt 1â&#x20AC;&#x201C;3. (1) 374-6573 (1) 374-6536 info@westend.hu

/XUG\ +i] %HYiViUOy pV Irodacentrum Kft., 1097 Budapest, KĂśnyves KĂĄlmĂĄn krt. 12â&#x20AC;&#x201C;14., (1) 456-1200, (1) 456-1209, www.lurdyhaz.hu

47,500 47,500 95,000

4 100 1,350

Âť

1097 Budapest, KĂśnyves KĂĄlmĂĄn kĂśrĂşt 12â&#x20AC;&#x201C;14. (1) 456-1100 (1) 456-1209 titkarsag@lurdyhaz.hu

6&0 6KRSSLQJ &HQWHU Management Kft., 1117 Budapest, OktĂłber huszonharmadika u. 8â&#x20AC;&#x201C;10., (1) 372-7200, (1) (1) 372-7201

46,600 7,000 118,000

3 150 1,200

Van Graaf, H&M, C&A, New Yorker, Zara, Marks&Spencer, Libri, Humanic, Intersport, Cinema City, Interspar, Best Byte, Deichmann

1117 Budapest, OktĂłber huszonharmadika utca 8â&#x20AC;&#x201C;10. (1) 372-7200 (1) 372-7201 info@allee.hu

46,500

Âť

122,000

2 75 2,600

Auchan, OBI, ALDI, Deichmann, TAKKO, New Yorker, Euronics, GILDA MAX FITNESS, CCC, DM, KIK, OTP Bank, Raiffeisen Bank

1117 Budapest, Hunyadi JĂĄnos Ăşt 19. (1) 887-1330 (1) 209-9071 RIĂ&#x20AC;FH#VDYR\DSDUN KX

44,100 â&#x20AC;&#x201C; 62,000

1 220 2,500

Âť

1152 Budapest, SzentmihĂĄlyi Ăşt 131. (1) 415-2114 (1) 419-4034 polus@eur.cushwake.com

Âť

4 158 1,020

H&M, Orsay, Tamaris, Media Markt, IStyle, CBA PrĂma, VĂśgele, Intersport, Alexandra, Libri, Marks and Spencer, Promod, Yves Roches, EstĂŠe Lauder/ Clinique, Marionnaud, Tally Weijl, PlayersRoom, IMORI VirĂĄg, Vodafone, Deichmann, Humanic, KFC, MC 'RQDOGÂˇV &LQHPD &LW\ '0 9LVLRQ ([SUHVV 5HVHUYHG %DWD &ODLUÂˇV *DV Jeans, Retro Jeans

1138 Budapest, VĂĄci Ăşt 178. (1) 465-1600 (1) 465-1620 dunaplazasc@klepierre.com

.OHSLHUUH 0DQDJHPHQW 0DJ\DURUV]iJ .IW 1138 Budapest, VĂĄci Ăşt 178., (1) 577-1100, (1) 577-1101, www.klepierre.com

34,000 â&#x20AC;&#x201C; 74,000

4 110 812

CBA, MĂźller, H&M, Hervis, New Yorker, C&A, Reserved, Euronics, Alexandra, Reno, Posta

1082 Budapest, FutĂł utca 37â&#x20AC;&#x201C;45. (1) 977-7779 (1) 577-1101 info@corvinplaza.hu

%13 3DULEDV 5HDO (VWDWH =UW 1123 Budapest, AlkotĂĄs u. 53., (1) 487-5501, (1) 487-5542

28,600 18,600 48,200

3 110 1,230

Cinema City, SPAR, H&M, Reserved, Salamander, French Connection, Furla, Benetton, Gant, Michael Kors, Paulaner, Vapiano, Leroy

1123 Budapest, AlkotĂĄs utca 53. (1) 487-5501 (1) 487-5542 momparkinfo@mompark.com

(XURSDUN %HYiViUOyN|]SRQW .IW %XGDSHVW hOOĹ&#x192;L ~W (20) 800-0520, (20) 800-0520, www.europark.hu

25,600 â&#x20AC;&#x201C; 30,500

2 65 1,000

Âť

1191 Budapest, hOOĹ&#x192;L ~W (20) 800-0520 (20) 800-0520 info@europark.hu

0DQKDWWDQ 5HDO (VWDWH Management Kft., 1032 Budapest, BĂŠcsi Ăşt 154., (1) 437-4600, (1) 437-4650

22,059 â&#x20AC;&#x201C; 35,900

4 100 400

Âť

1032 Budapest, BĂŠcsi Ăşt 154. (1) 437-4600 (1) 437-4650 info-hu@aere.com

FACILITY MANAGER, ADDRESS, PHONE, FAX, WEBSITE

ECE Projektmanagement Budapest Kft., 1106 Budapest, Ă&#x2013;rs vezĂŠr tere 25/a, (1) 434-8200, (1) 434-8207, www.ece.com

0DPPXW 6]ROJiOWDWy =UW %XGDSHVW /|YĹ&#x192;Ki] X Â˛ (1) 345-8000, (1) 345-8005, www.mammut.hu

&HJLV +XQJDU\ .IW 1117 Budapest, Hunyadi JĂĄnos Ăşt 19., (1) 887-1330, (1) 209-9071, www.cegis.fr

&XVKPDQ :DNHĂ&#x20AC;HOG .IW 1052 Budapest, DeĂĄk Ferenc u. 15., (1) 266-1288, (1) 268-1289, ZZZ FXVKPDQZDNHĂ&#x20AC;HOG FRP

.OHSLHUUH 0DQDJHPHQW 0DJ\DURUV]iJ .IW 1138 Budapest, VĂĄci Ăşt 178., (1) 577-1100, (1) 577-1101, www.klepierre.com

37,000 â&#x20AC;&#x201C;

WWW.BBJ.HU

RANK

COMPANY WEBSITE

SUGĂ R SHOPPING CENTER

CSEPEL PLAZA

www.sugar.hu

www.csepelplaza.hu

Budapest Business Journal | November 28 â&#x20AC;&#x201C; December 11, 2014

FACILITY MANAGER, ADDRESS, PHONE, FAX, WEBSITE

NET RETAIL SPACE (SQM) NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

NO. OF LEVELS NO. OF RETAIL UNITS NO. OF PARKING SPACES

MAIN TENANTS IN 2013

ADDRESS PHONE FAX EMAIL

.HULQJDWODQ .IW %XGDSHVW 1DJ\ -HQĹ&#x192; X (1) 487-3746, (1) 487-3749

19,000 â&#x20AC;&#x201C; 19,803

2 68 473

Âť

1148 Budapest, Ă&#x2013;rs vezĂŠr tere 24. (1) 469-5339 (1) 469-5330 sugar@sugar.hu

.OHSLHUUH 0DQDJHPHQW 0DJ\DURUV]iJ .IW 1138 Budapest, VĂĄci Ăşt 178., (1) 577-1100, (1) 577-1101, www.klepierremanagement.hu

13,675 â&#x20AC;&#x201C; 19,803

2 68 473

Âť

1211 Budapest, II. RĂĄkĂłczi Ferenc Ăşt 154â&#x20AC;&#x201C;170. (1) 425-8004 (1) 425-8004 csepelplaza@klepierre.com

CPI Hungary Kft., 1132 Budapest, VĂĄci Ăşt 30., (1) 225-6600, (1) 225-6601, www.cpigroup.hu

11,400 â&#x20AC;&#x201C; 12,260

2 8 420

%UHQGRQ 2IĂ&#x20AC;FH 'HSRW /tUD .|Q\Y

1234 Budapest, BevĂĄsĂĄrlĂł utca 8. (1) 225-6600 (1) 225-6601 retail@cpipg.com

)Ĺ&#x192;YiURVL gQNRUPiQ\]DW &VDUQRN pV 3LDF ,JD]JDWyViJD 1117 Budapest, KĂśrĂśsy J. u. 7â&#x20AC;&#x201C;9., (1) 273-3100, (1) 273-3163, www.piaconline.hu

11,140 â&#x20AC;&#x201C; 12,304

5 67 56

Âť

1033 Budapest, FlĂłriĂĄn tĂŠr 6â&#x20AC;&#x201C;9. (1) 439-3800 (1) 439-3887 csapi.ig@csapi.hu

URMI Kft., 1118 Budapest, RĂŠtkĂśz u. 7., (1) 309-0400, (1) 309-0402

11,000 3,000 20,000

4 40 250

Âť

1118 Budapest, RĂŠtkĂśz utca 7. (1) 309-0400 (1) 309-0402 info@elevencenter.hu

5pFVHL &HQWHU .IW 1146 Budapest, IstvĂĄnmezei Ăşt 6., (1) 460-3622, (1) 460-3618

10,000 25,000 18,000

Âť

1146 Budapest, IstvĂĄnmezei Ăşt 6. (1) 460-3666 â&#x20AC;&#x201C; recsei@recsei.hu

0DQKDWWDQ 5HDO (VWDWH Management Kft., 1032 Budapest, BĂŠcsi Ăşt 154., (1) 437-4600, (1) 437-4650

9,322 â&#x20AC;&#x201C; 9,662

Âť

1103 Budapest, Sibrik MiklĂłs Ăşt 30. (1) 439-2330 â&#x20AC;&#x201C; info@family-center.hu

Ă&#x201D;M 8GYDU .IW 1036 Budapest, BĂŠcsi Ăşt 38â&#x20AC;&#x201C;44., (1) 437-8205

9,322 300 13,000

Âť

1036 Budapest, BĂŠcsi Ăşt 38â&#x20AC;&#x201C;44. (1) 437-8200 â&#x20AC;&#x201C; â&#x20AC;&#x201C;

Âť

1039 Budapest, RĂĄkĂłczi utca 36. (1) 242-1142 (1) 275-1846 info@csillagvar.com

SOROKSĂ R BUY-WAY www.buyway.hu

)/Ă?5,Ă&#x2030;1 7e5, h=/(7.g=3217

ELEVEN CENTER

RĂ&#x2030;CSEI CENTER

www.piaconline.hu

www.elevencenter.hu

www.recsei.hu

)$0,/< &(17(5 .Ĺ&#x201A;%Ă&#x2030;1<$ www.family-center.hu

Ă&#x161;J UDVAR SHOPPING CENTER â&#x20AC;&#x201C;

CSILLAGVĂ R SHOPPING CENTER

RĂ&#x201C;ZSAKERT SHOPPING CENTER

RĂ&#x201C;ZSADOMB CENTER

www.csillagvar.com

www.rozsakert.hu

www.rozsadombcenter.hu

9,000

Âť

360

Âť

400

Âť

400

Âť

Âť Âť

3 41 250

5DLIIHLVHQ ,QJDWODQ h]HPHOWHWĹ&#x192; .IW 1054 Budapest, AkadĂŠmia u. 6., (1) 477-8488, (1) 477-8499

7,375 â&#x20AC;&#x201C; 18,000

5+2 72 230

Âť

1026 Budapest, GĂĄbor Ă ron utca 74. (1) 391-5998 (1) 391-5961 info@rozsakert.hu

5 GRPE &HQWHU .IW 1025 Budapest, TĂśrĂśkvĂŠsz u. 87-91., (1) 345-8400, (1) 345-8492

6,480 140 11,700

7 52 179

Spar, DM, OTP, Posta, Bowling, Chilli JĂłga, Squash, Fitness, No Milk, TĂłtĂĄgas KĂśnyvesbolt, Cafe Chino

1025 Budapest, TĂśrĂśkvĂŠsz Ăşt 87â&#x20AC;&#x201C;91. (1) 345-8400 (1) 345-8492 titkarsag@rozsadombcenter.hu

CPI Hungary Kft., 1132 Budapest, VĂĄci Ăşt 30., (1) 225-6600, (1) 225-6601, www.cpigroup.hu

5,000 â&#x20AC;&#x201C; 6,000

3 19 220

MĂźller, H&M, Deichmann, Yves Rocher, OTP Bank

1081 Budapest, NĂŠpszĂnhĂĄz utca 3â&#x20AC;&#x201C;5. (1) 225-6600 (1) 225-6601 info@europeum.hu

WPR Nonus Kft., 1095 Budapest, MĂĄriĂĄssy u. 7., (1) 451-4760

4,972 1,567 6,425

6 45 160

BortĂĄrsasĂĄg, CBA PrĂma, DM, HegyvidĂŠk GyĂłgyszertĂĄr, KormĂĄnyablakOkmĂĄnyiroda, LĂra KĂśnyvĂĄruhĂĄz, Magyar Posta, Neckermann-Thomas Cook, OTP Bank, OTP Travel, Triumph

1124 Budapest, Apor Vilmos tĂŠr 11â&#x20AC;&#x201C;12. (1) 951-0578 (1) 201-6691 info@hegyvidekkozpont.hu

&XVKPDQ :DNHĂ&#x20AC;HOG .IW 1052 Budapest, DeĂĄk Ferenc u. 15., (1) 268-1288, (1) 268-1289, ZZZ FXVKPDQZDNHĂ&#x20AC;HOG FRP

Âť Âť

2 150 3,279

Âť

1222 Budapest, NagytĂŠtĂŠnyi Ăşt 37â&#x20AC;&#x201C;43. (1) 424-3000 (1) 424-3001 info@campona.hu

EUROPEUM SHOPPING CENTER www.europeum.hu

HEGYVIDĂ&#x2030;K BEVĂ SĂ RLĂ&#x201C;KĂ&#x2013;ZPONT

CAMPONA SHOPPING AND ENTERTAINMENT CENTER

www.hegyvidekkozpont.hu

www.campona.hu

58,760

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

SPONSORED BY QATAR AIRWAYS

Qatar: Where high-flying dreams come true Most travelers rush through Qatar, using its airport only to change planes. But Doha, now gearing up for the World Cup, has a lot of exotic attractions to offer, from camel races to dune safaris. For the ultimate flying experience, make sure to choose Qatar Airways. Entering the hotel elevator, it’s full of young men in sports uniforms. They are on their way to breakfast where it turns out around two thirds of the guests represent various associations from volleyball to judo, apparently from all over the world. If you thought Qatar’s first megaproject in the realm of sports would be the football World Cup of 2022, you’re in for a big surprise. In fact, by the end of a 12-month period that started in April 2014, Doha will have hosted 99 major sporting events, including 43 international ones. The $2.8 bln invested in infrastructure in the last several years are paying off. No wonder the 2019 World Athletics Championships have recently been awarded to Qatar too. DETERMINED TO MAKE IT HAPPEN Driving in the capital strengthens the image that everything revolves around development. Three metro lines are being built in parallel and there’s a construction site at every second corner. These are all signs of focused preparations for the largest global football fest due in eight years’ time. Some talk openly about hosting the Olympics soon. The Qatari face an enormous challenge, and not only because of the heat. The World Cup normally spreads over several large cities, but now a single one with a million residents must cope with the onetime flood of fans. Regardless, Qatar is determined to show it can make it happen. For a start, a brand-new, space stationlike airport was built. The predicted 30 million passengers are offered an unrivalled experience. State-of-the-art lounges and premium brand stores are meant to spoil travelers at the highest level. More is to come, though, as the next

phase of building will see a ballooning of the passenger handling capacity of Hamad International Airport by two-thirds. FEELING LIKE MESSI Travelers’ demands are also expected to soar thanks to a strategy that intends to make Doha a regional aviation hub. Along that line national airline Qatar Airways is rapidly expanding. On top of its current fleet of 139 operating aircraft, it has 340 more on the order books worth a whopping $70 bln, or the equivalent of 60% of Hungary’s GDP. Passengers choosing Qatar Airways can claim that their experience starts on boarding the aircraft. Forget that it’s the privilege of Messi & Co. from that ad to get the finest treatment. The airline, which was awarded Five-Star ranking ten years ago, provides a dazzling level of service. Every detail is perfectly planned from the interior design to the world-class hospitality of the crew. The entire time spent on board justifies all those honors that Qatar Airways has been

given and that are listed on no less than eight full pages. According to Skytrax, an aviation audit organization, those titles include the World’s Best Business Class 2014 for the second consecutive year, and Airline of the Year in 2011 and 2012. God knows what consigned them to the runner up position in the past two years in the latter category because one thing is dead certain: flying Qatar Airways rocks! And its business class is unforgettable. NO NEED TO RUSH ON The five-course menu crafted by celebrated French chefs offers impeccable harmony with dishes reinterpreted in a fun and elegant way. The Chardonnay from the premium wine list – featuring every wine region of the world – keeps you comfortably numb. In your king-sized seat you feel more like you are in a business lounge or in a cozy hotel lobby. Time flies while up in the air, so no wonder the next thing you know is the captain announcing the plane has started its descent. Should you be among those nine out of ten tourists that use Qatar only for transit purposes, you may want to reconsider your next itinerary. For there’s no need to rush on. Doha has a lot more to make you stay longer, so next time make sure you do. The dune safari is undoubtedly a classic, with moments when your SUV rushes downhill at seemingly impossible angles. Go for a camel ride to let your adrenaline drop. This animal is so sweet it makes you want to own one. Allegedly, 1,500 dollars would do the trick, although it would cost millions to buy one of the racing camels that feature in fascinating competitions from time to time. FALCON SURGERY IN CLOSE-UP VIEW Other collectibles are also high on the wish list of locals. Among them are cars, watches, horses and, believe it or not, falcons! Having a falcon is part of the culture and wanna-be owners are ready to shell out up to tens of thousands of dollars to buy one. Having them trained and flown

at hunting contests drives up related costs further. Stores specialize in selling them, and in downtown Doha there’s even a dedicated hospital meant for their sole treatment. Witnessing surgery in such a cutting-edge environment makes you wonder how many people in this world would rather switch with these birds. The passion for falconry is yet another sign of the laid-back way the Qatari people live their lives. They can do so in complete safety, as there’s pretty much no such thing as crime. Horse riding policemen serve more as a tourist attraction. This orderliness and the booming economy keep drawing labor from abroad to the extent that more than 80% of the country’s 1.8 million population is made up of foreigners. With up to 100,000 new jobs opening in the near future, diversity is bound to reach even higher. UP FOR A BEER IN THE LIBRARY BAR? Germ freaks are bound to have their prejudiced concerns, but it’s time for them, too, to relax. “Clean” and “modern” are the buzzwords that determine your Doha experience. The bazaar quarter, the Souq, is no exception to that rule. But all this modernity is also merged with tradition; every high-tech architectural solution contains a tiny element of Arabic patterning, from ATM machines to the cases covering air-conditioning devices. When ‘doing’ the Souq, don’t expect some worn-down area. It is to the same high standard as the rest of the city, and to enjoy a perfect dinner, go to Al Terrace where Lebanese cuisine is practiced at an artistic level. It’s so good that you can easily deal with the fact that alcohol is available only in a select few places. It’s part of the fun to track them down and get lost on the way there because your driver from Ghana has to figure out himself from strangers where exactly to go. Now you can imagine how rewarding a single cold beer could feel, in particular on the eleventh floor of a hotel in an establishment called ‘The Library’. But why don’t you find out for yourself some day?

BBJ

4 Socialite New wines make 2014 shine, at least for now Overall, 2014 is supposed to be a bad year for Hungarian vintages, but the early grapes seem to have missed the worst of the weather. ROBERT SMYTH

The 2014 vintage looks set to be something of an annus horribilis for Hungarian wine but at least the first releases made from grapes that ripened before the weather did its very worst are, for the most part, pretty consistent and up to scratch. The new wines that are traditionally released to coincide with Szent Márton Nap (St. Martin’s Day) on November 11 revealed some pleasant surprises, flying somewhat in the face of the assumption that all was lost after heavy rain washed out much of the second half of the summer. Some winemakers, such as Pálffy from the Káli Basin, have written the vintage off and are expected to have virtually zero output, while from across the Balaton the Konyári cellar may release only rosé instead of red wine. The downpours lasted right up until, and indeed right through, the critical harvest period for the regular ripening grapes. However, spring and early summer were stellar and the early−ripening grapes or those that happened to be picked early escaped much of the damage. Incidentally, back in late spring and early summer, it looked likely that even later ripening grapes would need to be brought in within the month of August. However, a regular pattern of downpours followed by hot weather created the ideal humid, moist vineyard conditions for disease, especially powdery

Ottó Légli 333

Figula Zenit 2014

Zoltán Günzer Portugieser Szüret 2014

and downy mildew, to develop in many of the wine regions and blight the vintage. From Balatonfüred’s Figula winery Zenit 2014 actually has quite a lot of body, when we might be expecting a more watery wine. This is a little restrained on the nose at first but is quite opulent on the palate, oozing primary grape notes, along with pear, pineapple and grapefruit, plus a touch of spiciness

WINE GALLERY FOR BEGINNERS AND EXPERTS

DISCOVER THE BEST OF HUNGARIAN WINE CULTURE IN ONE PLACE • taste before you buy • bachelor/ bachelorette party • individual tastings (no reservation needed) • guest visit • Christmas party • company apero • gift card • birthdays Suggested for:

1052 Budapest, párizsi utca 4., •Tel.: +36 -1-235-0230 • www.cultivini.com

Tamás Dúzsi Marci 2014

on the finish. This white grape is a crossing of Ezerjó and Bouvier that was created by Ferenc Király in Pécs in 1951 and is typically picked in August. Staying in the same region, the organic Dobosi Olaszrizling 2014 is a lively, focused and precise white wine with clean grapefruit and fresh green apple aromas and flavors, along with thirst−quenching crispy acidity. Organic (and biodynamic) growers have less defenses to throw at the elements, but this one came out just great, as it has done for the previous couple of vintages since it’s been on my radar. Zenit puts in another appearance in Ottó Légli’s 333, which is always released on the 333rd day of the year and comes from the south side of Lake Balaton from the Balatonboglár region. The grape is joined by Pinot Blanc, Irsai Olivér and Rizlingszilváni (Müller−Thurgau) to make an aromatic, zippy, citrusy, refreshingly sour and immensely quaffable wine with light alcohol (10.5%). Among the rosés, the first bottling from Csaba Sebestyén of Primőr Rozé 2014 from Szekszárd is a nice pink color, clean as a whistle and oozes strawberry aromas. Csaba now has his sister Csilla, who previously worked as a sommelier at a Michelin−starred restaurant in Scotland, helping him back at the family winery. Together they composed the blend of two− thirds Zweigelt and one−third Merlot. From Villány, upcoming Levente Kvassay’s rosé 2014, a blend of

Csaba Sebestyén Primőr Rozé 2014

Kékfrankos, Merlot and Syrah, is a vibrant light pink color, deliciously fruity on the nose with raspberry, strawberry and even a squeeze of zesty lime. It strikes a lovely balance between the bite of the acidity and juicy fruitiness on the palate. Everything about this wine says, “Drink me!” Back in Szekszárd, Tamás Dúzsi’s Marci 2014, a blend of Blauburger, Zweigelt and Portugieser, is a lively, fresh, medium− bodied red with nice fruit (sour cherry and raspberry). From Villány, Zoltán Günzer’s bright purple−colored Portugieser Szüret 2014 is quite light in terms of body but fabulously fragrant with floral and primary grape aromas. It is very vibrant on the palate and oozes fresh new wine appeal. Zoltán, not to be confused with his brother and fellow Villány vintner Tamás Günzer, made two “Oportós” as he still refers to the grape once known in full as Kékoportó, in 2014. This one was bottled straight from the tank after a rough filtering to preserve its freshness, with the aim of making a wine to enjoy now rather than later. While the Günzers and many of the Villány winemaking fraternity are of Swabian German descent, a new mini wave of German winemakers (i.e. the Wassmanns (Ralph and Susann) and Horst Hummel), are taking this supposedly low pedigree grape very seriously, drastically reducing yields, working with minimum intervention and releasing really complex and even age worthy wines from it.

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | November 28 â&#x20AC;&#x201C; December 11, 2014

WHATâ&#x20AC;&#x2122;S

Fun things to d o in Budapest for the nex t t wo weeks.

Christmas Market. Take 6.

CHRISTMAS MARKET November 28â&#x2C6;&#x2019;December 31, VĂśrĂśsmarty tĂŠr More than 100 craft kiosks offer everything from jewelry to pottery, leather goods, wooden toys and all manner of decorative household items. Mulled wine will keep shoppers warm while locally prepared sausages and other delicacies fuel the shopping frenzy. budapestinfo.hu/xmas IMAGINING VISION To March 1, Robert Capa Contemporary Photography Center A joint exhibition between the Capa Center and Kitchen Budapest showcases innovative technologies in the context of vision and observation. This fully interactive event features such gadgets as Google Glass, Oculus Rift, Leap Motion and an augmented reality mask, all of which blur the boundaries between reality and virtual reality. Also on display is a survey of related technologies from early adopters to more advanced contraptions. capacenter.hu ELLEN ALLIEN November 28, AkvĂĄrium Klub DJ/producer and founder of Berlin electronic music record label BPitch Control comes to Budapest to spin her signature, dancefloorâ&#x2C6;&#x2019; friendly mix of minimal electronica and IDM. A sought after DJ in her own right, she also provides a forum, through BPitch, to fellow Berliners Paul Kalkbrenner, Ben

Michael Nyman.

Klock, Modeselektor and many more. akvariumklub.hu MICHAEL NYMAN BAND November 28, Palace of Arts The master of minimalist contemporary music, composer Michael Nyman made a name for himself by producing hypnotic soundtracks for a number of underground films, most notably the works of director Peter Greenaway and Jane Campionâ&#x20AC;&#x2122;s Piano. This performance commemorates the centenary of the outbreak of the First World War and will feature a collage of archival footage from the war, some of it graphic in nature. mupa.hu

TRICKS & TRACKS 2 December 5â&#x2C6;&#x2019;6, TrafĂł House of Contemporary Arts Presented by renowned contemporary dance choreographer PĂĄl FrenĂĄk, Tricks & Tracks 2 follows in the footsteps of the original Tricks & Tracks first brought to the stage in 1999. Minimal sets and lithe, scantily clad dancers parade about and clash with each other on stage in this physical manifestation of human relationships. trafo.hu ADVERTISEMENT

-DQXDU\ _ SP 6ROR FKDULW\ FRQFHUW /LV]W $FDGHP\ %XGDSHVW

NIGHT CIRCUS November 29, Palace of Arts First premiered at the renowned Budapest Spring Festival, the Recirquel Contemporary Circus Company features an allâ&#x2C6;&#x2019;Hungarian cast of gifted acrobats under the director of choreographer Bence VĂĄgi to a jazzâ&#x2C6;&#x2019;inspired live soundtrack. mupa.hu TAKE 6 December 2, Palace of Arts This Grammyâ&#x2C6;&#x2019;award winning Christian a cappella sextet finds its inspiration in spiritual roots and never missses a beat. The group originates from Huntsville Alabama and perform a mix of R&B, jazz and gospel. mupa.hu

MĂ RTA SEBESTYĂ&#x2030;N December 11, Liszt Ferenc Academy of Music Hungarian folk singer MĂĄrta SebestyĂŠn gained international recognition when she loaned her voice to the Deep Forest world music outfit in the midâ&#x2C6;&#x2019;â&#x20AC;&#x2122;90s. In this eveningâ&#x20AC;&#x2122;s performance sheâ&#x20AC;&#x2122;s backed by a full instrumental ensemble and will perform her mix of folk, classical and choral works at the beautifully restored Liszt Ferenc Academy of Music. mupa.hu

)HEUXDU\ _ SP 0DVWHUV RI LPSURYLVDWLRQ IHDW -iQRV %DOi]V DQG 0RKDPPDG 5H]D 0RUWD]DYL 3DODFH RI $UWV %XGDSHVW )HEUXDU\ _ SP _ )RON 3DODFH RI $UWV %XGDSHVW )HEUXDU\ _ SP _ ,QÂşQLW\ :LWK WKH 'RKQiQ\L 6\PSKRQ\ 2UFKHVWUD &RQGXFWHG E\ *iERU +ROOHUXQJ 3DODFH RI $UWV %XGDSHVW

PDUDWKRQ &RQFHUWV LQ %XGDSHVW ZZZ IHOL[ODMNR KX _ ZZZ ]HQHDNDGHPLD KX _ ZZZ MHJ\ KX _ ZZZ PXSD KX

BEYOND THE BOUNDARIES OF FOLK Violinist and zither player FĂŠlix LajkĂł has been captivating audiences since he first stepped onto the stage at age 15. Next month he launches a series of concerts in various formations, while he continues to push the musical envelope with his passionate improvisations. FĂŠlix LajkĂłâ&#x20AC;&#x2122;s music is as colorful and varied as his collaborations, leaning heavily on traditional folk but frequently meandering over to classical, jazz and even blues. In honor of his 40th birthday, he will play a round of shows as part of the â&#x20AC;&#x153;FĂŠlix LajkĂł marathonâ&#x20AC;? with the first Budapest performance taking place at the Music Academy on January 3, followed by three shows at the Palace of Arts on February 27 and 28, each with a different set of musical guests. While some are lucky to be born with talent, LajkĂł has the added advantage of knowing his only option was to pursue a career in music.

It also helps that heâ&#x20AC;&#x2122;s very good at what he does. â&#x20AC;&#x153;I just really love to play. I grew up in a very different environment and I needed to make something of myself. This was the one thing I knew how to do so I started playing violin in bars,â&#x20AC;? LajkĂł says very matter of factly. â&#x20AC;&#x153;The reason I play music is because I canâ&#x20AC;&#x2122;t express this stuff in words.â&#x20AC;? Born to Ethnic Hungarian parents in the Vojvodina province of Serbia, LajkĂł never completed his musical studies and instead developed a particular way of playing and composing. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t write anything down.

Whatâ&#x20AC;&#x2122;s good I can remember, and what isnâ&#x20AC;&#x2122;t, it doesnâ&#x20AC;&#x2122;t matter,â&#x20AC;? he says. This technique, of course, leaves much room for improvisation. â&#x20AC;&#x153;I work with themes that have the same notes but I never play them in the same way,â&#x20AC;? he explains. In keeping with his collaborative inclinations, LajkĂł has big plans with some equally gifted musicians. â&#x20AC;&#x153;It looks like Iâ&#x20AC;&#x2122;ll be making a record with the Balanescu Quartet very soon, and Iâ&#x20AC;&#x2122;m also going to be doing some recordings with [Iranian] drummer, Mohammad Reza Mortazavi,â&#x20AC;? he says.

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | November 28 – December 11, 2014

BOOK REVIEW

Playing big This ground−breaking book gives every woman the practical skills they need to “play bigger”, by finding their voice and making things happen. In her inspirational book, “Lean In”, Sheryl Sandberg raised awareness about the changes women need to make in order to become more successful. In “Playing Big”, Tara Mohr continues this conversation and extends it, by providing useful strategies for how women can achieve these goals. Mohr, an expert in leadership and wellbeing, was inspired to write “Playing Big” when she realized that many of the women she was working with were not recognizing their own worth. She suspected that these women wanted to “play bigger” in their lives and careers, but were not sure how to begin. Whether a manager, volunteer, entrepreneur, graduate or stay− at−home mom, many women aspire to something, from more opportunities to share their voice to more influence in the workplace. Mohr has spent years coaching women to help them reach their potential in her leadership courses, and founded the globally successful Playing Big leadership program. In “Playing Big”, she shares the lessons she’s learned from working with women to

help them pursue their ambitions with more conviction. Mohr argues that women face certain challenges in trying to play bigger, such as experiencing destructive feelings of self−doubt. She reasons that women must learn how to silence their negative internal voice and tap into their inner wisdom by beginning to “listen to your inner mentor instead of your inner critic”. Some of the thought− provoking strategies Mohr proposes include the notion of “unhooking from praise and criticism” and the need to leave “good−student habits behind”. In this way, Mohr presents practical tools that women can use to identify and pursue their callings, learn to trust their instincts and become confident to share their ideas and questions. Through its step− by−step development program, the book shows how every woman can make real changes in her life in a simple, effective way. Insightful and informative, “Playing Big” is the ideal guide for any woman who has ever felt they would like to make a change in their lives, but does not know where to start. Samantha Waide PLAYING BIG. by Tara Mohr Published by Hutchinson ISBN 9780091954369 Available to order through www.hungaropress.hu

WHO'S NEWS Do you know someone on the move? Send information in English to research@bbj.hu

Name DR. FERENC MÁTRAI Current company/ position SENIOR COUNSEL, WEIL, GOTSHAL & MANGES LLP BUDAPEST OFFICE Previous company / position PARTNER, CMS CAMERON MCKENNA LLP BUDAPEST OFFICE

Senior Counsel Ferenc Mátrai has recently joined the Budapest office of Weil, Gotshal & Manges LLP where he became practice head of the firm’s Real Estate practice. Since earning his law degree from Eötvös Loránd University (ELTE) in 1989, he has gained in-depth experience in real estate and construction, corporate and M&A as well as PPP projects and other public procurement matters. He has previously advised numerous international companies on high-profile transactions across the CEE region. He is a member of the Budapest Bar Association and is fluent in English in addition to his native Hungarian. Weil, Gotshal & Manges LLP is a leading international law firm of more than 1,200 lawyers, including approximately 300 partners worldwide. Weil is headquartered in New York, with offices in Beijing, Boston, Budapest, Dallas, Dubai, Frankfurt, Hong Kong, Houston, London, Miami, Munich, Paris, Prague, Princeton, Providence, Shanghai, Silicon Valley, Warsaw, and Washington D.C.

REMBRANDT AND THE DUTCH GOLDEN AGE AT THE MUSEUM OF FINE ARTS - 31 OCTOBER 2014 – 15 FEBRUARY 2015 The large-scale exhibition titled Rembrandt and the Dutch Golden Age, to run in the Museum of Fine Arts from 31st October, showcases 17th-century Dutch art, one of the golden ages of European culture. Displaying 178 works by over 100 painters, the exhibition is built around one of the greatest masters of the period, Rembrandt, and twenty of his masterpieces. The most outstanding pieces of the Museum of Fine Arts’ rich Dutch collection will be complemented by more than 130 paintings from some fifty European and American public and private collections. The most prominent loaning institutions include the Rijksmuseum in Amsterdam, the Nationalmuseum in Stockholm, the Louvre, the London National Gallery, the Los Angeles Getty Museum, the New York Metropolitan, the Uffizi in Florence and Madrid’s Prado. Besides a significant number of works by Rembrandt – including the artist’s earliest known painting and one of his last selfportraits – visitors can view three works by Vermeer. A The exhibition’s key lenders are the Nationalmuseum in Stockholm, the Rijksmuseum in Amsterdam and the Kremer Collection. The Hungarian public has never before had the opportunity to see such a

Dutch master, as well as his followers and students, while also presenting the history of Dutch painting immediately prior to Rembrandt as well as around his time. The exhibited paintings will also provide visitors with an insight into 17th-century Holland’s struggle for independence, the flourishing of the sciences, the fundamental religious and social changes, and the developments in people’s way of life and thinking. The exhibition was realised with support from the Hungarian Government.

comprehensive exhibition of Dutch art from the 1600s. Filling a long-standing gap in the history of domestic exhibitions, Rembrandt and the Dutch Golden Age will be the last large-scale exhibition before the Museum of Fine Arts closes for renovation work in spring 2015. With its exhibition displaying the Dutch Golden Age the Museum of Fine Arts continues its series, launched in 2006, linked to its important collections. After El Greco, Velázquez, Goya in 2006; Botticelli to Titian in 2009 and Caravaggio to

Canaletto in 2013, the current exhibition focuses on the 17th-century material of the museum’s Dutch Collection, which ranks high by international comparison: with its 500 paintings, including pieces by 17th-century masters, it is among the top five collections in Europe, excluding the Netherlands. Rembrandt is one of the greatest artists of all time and his oeuvre is a faithful impression of the formation of Holland and the social changes interconnected with it. The exhibition, therefore, focuses on the

The chief business sponsor of the exhibition is MKB Bank, its key business sponsor is TriGránit Development Plc., its sponsor is MVM Hungarian Electricity Plc., and cooperating partners are KLM Royal Dutch Airlines, Sofitel Budapest Chain Bridge. The exhibition is curated by Ildikó Ember, an internationally reputed researcher of 17th-century Dutch painting, and co-curated by Júlia Tátrai, an art historian of the Old Masters’ Gallery specialised in Dutch and Flemish art.

Museum of Fine Arts, Budapest Dózsa György út 41, 1146 Budapest http://www.szepmuveszeti.hu

WWW.BBJ.HU

Budapest Business Journal | November 28 – December 11, 2014

Restaurants FINE

4 Socialite

This is an extract from Fine Restaurants, the Budapest Business Journal’s Restaurant Guide 2014 (www.facebook.com/fine. restaurants). To order your copy of the publication, which costs HUF 2,990, send an email including contact details to Andrea Bognár, bognar.a@amedia.hu

Trattoria Pomo D’oro The amazing standards our restaurant represents can best be proven by the fact that we were the first to receive the plaque of patronage from the Italian Chef Association. Be our guest, and join an exciting and adventurous trip through all the different tastes of Italian cuisine! We look forward to seeing you in our restaurant. Address of restaurant: 1051 Budapest, Arany János utca 9. · Telephone number: +36 (1) 302−6473 · Telephone number for reservations: +36 (1) 302−6473 E−mail address: info@pomodorobudapest.com · Website address: www.pomodorobudapest.hu · Name of manager: Attila Jáhner · Name of chef: Rosario Simeoli· Opening hours: Monday−Sunday: 12:00–15:00 / 18:30–24:00 · Number of seating places: 150+26+12 · Year of establisment: 2002 ADVERTISEMENT

AZ ÚJ FULL HYBRID LEXUS GS 300h

Bármilyen hosszú legyen az út, az új Lexus GS300h modellből frissen szállhat ki. Az új GS a dinamikus dizájn, precíz irányíthatóság és modern utastér mellett új hajtáslánccal felszerelt rendszert kínál. Elérhető választás a kényelem és megbízható luxus rajongóinak. További információk: www.lexus.hu

HIVATALOS MÁRKAKERESKEDÉS Lexus Buda 1112 Budapest, Budaörsi út 185—195. Telefon: (06 1) 248 2482 www.lexusbuda.hu

Az új GS 300h

W W W. L E X U S . H U facebook.com/lexushungary

A képen látható gépkocsi illusztráció. A Lexus GS 300h kombinált üzemanyag-fogyasztása (l/100km): 4,7—5,0; kombinált CO 2-kibocsátása (g/km): 109. További részletek a www.lexus.hu oldalon.

BUSINESS CLASS