Budapest Business Journal 3210

Real Estate: Offices

Office Demand Seeing Fundamental Changes

As demand has fallen in the Budapest office market, overall vacancy has risen. There are other concerns at play, however, not least the availability of larger floorplans and well-located, ESG-compliant properties.  14

CEE Markets Face Common Challenges

Office pipelines across CEE are restrained, with few new projects being initiated in the uncertain economic, geopolitical, and financial environment. Further concerns include letting and office working practices and even the long-term demand for space.  26

Grappling With Hungarian Mysteries

David Holzer says he is constantly reminded how little he knows of or about the magnificent Hungarian language. While he doubts he will ever accumulate more than a few words, he is keen to understand how it works.  29

Building on Your Assets

Italian Fabrizio Mazzá, the commercial director and country manager for HB Reavis, talks about the developer’s strategic goal to become one of the most efficient asset managers in Europe, as well as a leading constructor. 13

Disinflation Process is Broken in April

Fresh data suggests that the decline in the consumer price index stopped in April. According to analysts, inflation could return above 4% in May. However, no significant price pressure is expected in the Hungarian economy in the coming months.  3

The listed auto retailer is setting ambitious financial targets for 2028, aiming to double its revenue to HUF 750 billion and EBITDA to HUF 40 bln from last year’s figures.  7

EDITOR-IN-CHIEF: Robin Marshall

EDITORIAL CONTRIBUTORS: Luca Albert, Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Gary J. Morrell, Nicholas Pongratz, Gergő Rácz.

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THE EDITOR SAYS

PLUS ÇA CHANGE. OR MAYBE NOT.

I saw a series of photos the other day that reminded me how much things stay the same and how much they change. Sometimes simultaneously. The images were of a meeting in London on May 8 between Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó and his British opposite number David (now Lord) Cameron, the Secretary of State for Foreign, Commonwealth and Development Affairs, to give him his full official title.

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The two politicians know each other well. Szijjártó is the longest-serving foreign minister in the European Union, having taken up the post on Sep. 23, 2014, when he replaced Tibor Navracsics, who had resigned to take up his role as a European Commissioner. Cameron, of course, was British Prime Minister from 2010 until 2016, when what he took to be a calculated risk with his party and country over a referendum on whether to leave the European Union proved, in fact, to be a massive miscalculation.

Having campaigned to remain within the EU and lost, Cameron felt he could not stay on as PM and resigned. Rather than become what they call a backbencher, those Members of Parliament from the ruling party who play no direct role in government, he also stood down as an MP, claiming he did not want to prove a distraction to whoever succeeded him.

When he was the premier, he and Hungary’s Viktor Orbán became firm allies. It was a bond forged in 2014 during the process to appoint the former Luxembourg PM Jean-Claude Juncker as the president of the European Commission. Describing Juncker as the “ultimate

Brussels insider” who could not reform the EU, Cameron thought he had the support of others, most notably Germany. However, when it came to the vote, only two countries voted “No,” the United Kingdom and Hungary.

A former British Ambassador has told me several times how strongly Cameron felt about the support Hungary had offered when no one else did, describing Orbán as “a man of his word.”

Fast forward to now, and Cameron again unexpectedly occupies one of the four Great Offices of State: the PM, the Chancellor (finance minister), the foreign secretary and the home secretary (interior minister). It is clear from the photos the two top diplomats are comfortable in each other’s company. But it is also clear there is more water between the two sides than was the case in 2014.

Posting on X under the headline “Allies in London,” the Hungarian Embassy said the two countries are “in agreement on many important issues and have very different views on other important issues. We believe that arms deliveries do not bring peace, only the risk of escalating the war.”

David Cameron had a slightly different view, saying: “The UK is committed to backing Ukraine for as long as it takes. I met Hungarian Foreign Minister Péter Szijjáartó today to discuss this and the importance of maintaining Euro-Atlantic unity.”

To paraphrase Alphonse Karr, “The more things stay the same, the more they change.”

Robin Marshall Editor-in-chief

THEN & NOW

In the black-and-white photo from the Fortepan public archive, dated 1947, surgical staff in what is today the St. John Center Hospital of North Buda (Északbudai Szent János Centrumkórház) are seen operating on a patient. The color photo from the state news agency MTI depicts a robot-assisted surgical operating theater at the University of Debrecen Clinical Center’s Department of Surgery on the day of its handover, Tuesday, May 14.

Photo by Dr. Miklós Horváth / Fortepan

Photo by Zsolt

Czeglédi / MTI

1News

• macroscope

Hungary’s Disinflation Process Breaks in April

Fresh data suggests that the decline in the consumer price index stopped in April. According to analysts, inflation could return above 4% in May. Although no significant price pressure is expected in the Hungarian economy in the coming months, the process could mean inflation will return to the target tolerance band of the National Bank of Hungary (MNB) only in 2025.

Inflation in Hungary, 1991-2024 (January-April)

Change compared to the same period of the previous year, %

countries is sufficient so that the forint does not weaken too much,” Kiss concludes.

“After the 0.8% in March, the monthly inflation in April was still high at 0.7%, which is otherwise the same as the monthly repricing in January and February,” says ING Bank analyst Péter Virovácz. “There is still significant inflationary pressure in the Hungarian economy since, to sustainably reach the 3% inflation target, one-month inflation would have to be around 0.2-0.3%,” he warns.

Difficult to Predict

After 14 months of decline, inflation rose again in April. The year-on-year increase was 3.7%, following 3.6% in March. The main reasons for the rise were the more expensive market services and increasing fuel prices. Although the index is expected to rise above 5% by the end of the year, no huge price pressure is expected.

“The domestic headline index is still within the tolerance band of 2-4%, but we still believe that the current return of inflation [….] is a temporary phenomenon for the time being,” Erste Bank analyst János Nagy comments on the data.

He says the base effect was still supportive in April, but annual inflation rates are expected to rise again from May. In the short term, a critical proinflationary factor is the continued practice of backward-looking pricing, especially in the service sector, as well as the outflow of wages and the expected increase in consumption. The latter factor will likely be more decisive in the second half of the year.

“Overall, we expect fluctuating annual inflation figures of between 4-5%

throughout the year without a definite trend,” Nagy says.

“The favorable base effects of the Hungarian inflation trend have finally

ANNIVERSARY GALA

June 7, 2024 18:00

Source:

run out,” Péter Kiss of Amundi Alapkezelő says. He expects a fluctuating rise in inflation from May. “We will certainly have to revise our expectation of 4.8% for December,” the analyst notes.

Slower Rate Cutting

In light of the current data, the central bank could still reduce the base rate in May at the predicted slower pace, but depending on the base processes, a slowdown of up to 25 basis points is possible.

“From the middle of the year, the question marks will become more frequent. [.…] The course of domestic inflation within the year is questionable, as the analyst consensus expects a higher inflation trajectory than our forecast. On the other hand, the external environment can also change dramatically due to the incoming macroeconomic data,” Kiss says.

“The main question now seems to be how much of a real interest rate premium compared to regional

“For now, however, it is quite difficult to predict the second half of the year. The performance of the Hungarian economy seems to be weak; the tightness of the labor market has eased, which puts a brake on the favorable process of wage outflow. We do not have to fear the formation of a price-wage spiral. Caution is still present in the economy, and we still have to wait for the meaningful start of consumption. These will act as a brake on inflation in the months ahead, so they are more of a downside risk for our forecast,” Virovácz says.

Zoltán Árokszállási, of MBH Bank expects the increase in the price of services will slow down in the coming months as it becomes less justifiable to use last year’s inflation as the basis for pricing decisions. At the same time, rising internal demand, driven by high real wage growth, makes it easier for businesses to raise prices.

“As a result of these effects, we are projecting a slow decline in the annual price index of services for the coming months, which may significantly exceed the annual inflation calculated for the entire consumer basket during this year,” Árokszállási says. MBH is maintaining its forecast that this year’s average inflation rate will be 4.1%. For the rest of the year, annual inflation data might be over 4%, and for December, an increase in prices of around 5% could be forecast. The stable and sustainable achievement of the MNB’s inflation target of 2-4% is expected in 2025 at the earliest, but even then, the average annual inflation may exceed 3%, the analyst concludes.

SAVE THE DATE

AmCham Hungary cordially invites its partners and friends for its 35th Anniversary Gala event on June 7. Join AmCham for an unforgettable evening bringing together the most important decision makers, and business leaders of Hungary. The Gala will feature AmCham's Diversity Impact Awards presentation, a gourmet menu, and special programs to mark this significant milestone. For more information, and registration, please contact event@amcham.hu Millenáris, “B”

ZSÓFIA CZIFRA

PM Blames Low Growth on War, Speaks With Zelensky

Prime Minister Viktor Orbán blamed the ongoing war in Ukraine for holding back Hungary’s economic expansion in an interview with Kossuth Rádió on May 3. ‘If we weren’t in a wartime environment, then economic growth wouldn’t be 2.5%, it would be double,’ the PM said.

Spurred by Russia’s invasion of Ukraine in February 2022, countries on the eastern flank of the North Atlantic Treaty Organization have significantly bolstered their defense spending. While Poland led the rearmament surge, at

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3.9% of economic output in 2023 based on NATO figures, Hungary also increased its defense expenditures above the 2% NATO guideline to 2.43% of GDP last year.

Orbán warned that if the war continued into the following year, this level of spending would no longer be sufficient.

“If we have to calculate with the war in ’25, too, then defense expenditures in ’23 and ’24 won’t be enough […]. We’ll have to raise that spending, and if we have to raise that, then there will be less for other areas,” he warned.

Hungary still strongly opposes any Western military and financial support to Ukraine due to concerns about the conflict spilling over into Europe. The latest proposal by NATO involves long-term military support for Ukraine against Russia through EUR 100 billion to be paid out over the next five years, and the military alliance taking over some coordination work from a U.S.-led coalition known as the Ramstein group.

At a regular press briefing on June 9, Gergely Gulyás, the head of the Prime Minister’s Office, made it clear that the government was opposed to Hungary’s participation in the plans, adding that it would “make every effort”

to keep Hungarian soldiers and weapons from being sent to Ukraine. Regarding the plan’s timeline, Gulyás said the assumption the war would last for another five years was “in itself of concern.”

‘Crazy Mission’

Minister of Foreign Affairs and Trade Péter Szijjártó reiterated this sentiment at a meeting of MPs of governing Fidesz in Budapest on May 13. Acknowledging that Hungary couldn’t prevent NATO from carrying out its intentions, he said Hungary wanted “no involvement whatsoever” in what he called “NATO’s crazy mission.”

Meanwhile, Hungary is concerned by new sanctions proposed by the European Commission on Russia’s liquefied natural gas industry. While the measures wouldn’t directly prohibit Russian LNG imports to the EU, they would prevent EU countries from re-exporting Russian LNG after receiving it.

Hungary remains highly dependent on Russian exports and has long been against further energy sanctions. While Hungary did not oppose the measure outright at a recent meeting of EU ambassadors, Politico reported, Hungary said it would “not support anything that might have a negative impact on [the] EU gas market.”

HU-rizon Program: HUF 8 bln Funding for International Research led by Hungarian Unis

Hungary’s National Research, Development and Innovation Office (NRDIO) has announced a new HUF 8 billion call to support the launch of international research projects led by Hungarian research teams, involving the world’s top universities and research institutes and focusing on solving three social and economic challenges of importance to Hungary and the world.

Digitalization, the green transition, and the preservation of a healthy life are pressing challenges faced in almost all areas of the economy and society. Under the new call, the NRDIO invites innovative research proposals from Hungarian-led international research teams in these three priority focus areas identified in the John von Neumann Program (NJP).

Applications can be submitted until July 5. The goal-oriented, impact-driven approach of the HU-rizon Program and the requirement to achieve results that can be applied in practice will contribute to strengthening marketoriented research and the international embeddedness of Hungarian universities, NRDIO says.

The move follows an earlier EU decision to block Horizon Europe and Erasmus+ funding for some Hungarian institutes, including 21 universities, over concerns about their management structures.

“Our new international research excellence call shows that if they try to close us down, we will open up to the world. That is why we have initiated our international student exchange scheme, the Pannonia Program that is currently available, and launch now the HU-rizon Program to support international cooperation with Hungarian researchers,” says State Secretary for Innovation, Higher Education, Vocational Training and Adult Education Balázs Hankó, of the Ministry of Culture and Innovation.

The Importance of Research

“Facing the European Commission’s unfair and discriminatory decision, which seriously harms the competitiveness of Hungary and Europe, we believe in the importance

of international research cooperation. Through the launch of the HU-rizon Program, we will fund research in areas of interest to Hungarian society

Meanwhile, Orbán spoke with Ukrainian President Volodymyr Zelensky by phone on May 8, the PM’s press chief Bertalan Havasi said, according to state news agency MTI. Havasi said the parties discussed important elements of Hungarian-Ukrainian ties, focusing on war and peace. Orbán affirmed that Hungary was prepared to contribute to any initiative that could lead to peace, the press chief said. Havasi added that the sides agreed to continue bilateral consultations. posted about the call on.

“Hungary’s position is important to us when it comes to bringing peace and general regional security closer,” Zelensky wrote on X (formerly Twitter), according to the Warsaw-based Charter’97 Press Center. Zelensky emphasized Ukraine’s interest in good neighborly relations with Hungary and the development of cooperation in trade, energy and logistics.

“We agreed on further steps to resolve the entire range of bilateral issues on mutually beneficial terms. We discussed the European integration of Ukraine. I am convinced that Ukraine’s early accession to the EU will benefit both our states,” the president added.

and economy and cover the costs of the best foreign universities participating,” the state secretary underlined.

The program is open to research centers and researchers not only from Europe but globally, based on excellence, while Hungarian higher education institutions will lead the international consortia implementing the research projects.

Funding from the National Research, Development and Innovation Fund will cover the total budget of the research and development projects; in other words, the costs of both Hungarian institutions and their foreign partners. Projects can be awarded a budget of up to HUF 400 million.

Hungarian academic research groups have nine exciting topics to choose from within the three focus areas of the NJP and have two months to develop innovative concepts in cooperation with fellow researchers from Europe or beyond.

The 24-36-month collaborative projects funded under the HU-rizon Program aim to support the development of strategically important global partnerships and assist Hungarian researchers in getting ready to lead large-scale international projects.

NICHOLAS PONGRATZ

Balázs Hankó

Semmelweis Uni, Novartis Launch

Cutting-Edge Lipid Management Center

A significant milestone has been recorded in a three-way collaboration between Semmelweis University, the government and pharma firm Novartis Hungary with the establishment of an innovative Lipid Management Center to advance the prevention of cardiovascular diseases.

in atherosclerosis. Elevated levels of LDL cholesterol lead to the calcification and narrowing of the arteries, potentially resulting in heart attacks or strokes. It is well known that effectively lowering cholesterol levels can prevent, or even reverse, the narrowing of the arteries and thus prevent strokes or heart attacks.

The official announcement of the center was attended by Deputy State Secretary for Health Policy Judit Bidló of the Ministry of Interior, Rector of Semmelweis University Dr. Béla Merkely, Deputy State Secretary for Innovation László Bódis, and Colette Matz, country president of Novartis Hungary. The university, the Ministry of Culture and Innovation and Technology, and Novartis Hungary Ltd. signed a tripartite cooperation agreement in spring 2022 that aims to enhance the role of healthcare and digitaltechnical innovation in public health. The three pillars of the framework are the digitalization of clinical research and increasing access to it, securing Hungary’s leading role in cell and gene therapies, and launching a national cardiovascular public health program. A significant proportion of cardiovascular diseases are caused by atherosclerosis. This group of diseases includes heart attacks and strokes. In Hungary, every second death related to cardiovascular disease is due to atherosclerosis. In contrast, in the European Union, every third death can be attributed to this group of diseases, meaning Hungary is disproportionately affected. Evidence strongly suggests that “bad cholesterol,” more formally known as LDL cholesterol, plays a crucial role

LDL cholesterol levels are influenced primarily by genetic factors and lifestyle. According to evidence-based international professional recommendations, cardiovascular diseases caused by atherosclerosis can be effectively prevented by reducing LDL cholesterol levels to specific target values. Today, revolutionary and highly effective drugs are available to lower bad cholesterol levels, but lifestyle changes are equally important.

Most at Risk

As part of the triparty cooperation, the Semmelweis Lipid Center was established with a dual purpose. The first goal involves data analysis, mapping representative cholesterol levels across Hungary by region, gender, age subgroup, and existing comorbidities.

rector Merkely. “In our center, based on a carefully developed protocol, patients not only receive combined, innovative drug therapy but also personalized lifestyle, dietary, and psychological counseling. Our goal is to examine how much we can reduce the calcification of the neck, leg, and coronary arteries within two years with this approach,” he adds.

“We have set a goal of close cooperation between universities and research institutes, as well as the corporate sector, so that joint developments can generate real social and economic impact.”

The essence is to identify patient groups most at risk from atherosclerosis.

In addition, by examining the LDL cholesterol levels of several thousand heart attack patients visiting the Városmajor Heart and Vascular Clinic at Semmelweis University, researchers plan to map correlations that allow for new interventions to be implemented as soon as possible to achieve the international professional recommendation targets for LDL cholesterol levels more effectively.

Prevention and treatment of cardiovascular diseases are essential as these diseases affect one in five people in Hungary and cause the deaths of about

60,000 people here annually.

“The Hungarian Government is so committed to the more effective treatment of cardiovascular diseases and the care of our compatriots living with heart disease that we have made the fight against cardiovascular diseases and the adoption of a European action plan a key priority for our upcoming EU presidency,” Bidló, of the interior ministry, explains.

“In the János Neumann Program, we have set a goal of close cooperation between universities and research institutes, as well as the corporate sector, so that joint developments can generate real social and economic impact. The cooperation between Semmelweis University and Novartis exemplifies this, thus serving as a model for other players in the innovation ecosystem,” the culture and innovation ministry’s Bódis adds.

Unique Approach

“The second goal of the Semmelweis Lipid Center is to examine the effectiveness of a new, unique, comprehensive approach targeting patients proven to suffer from coronary artery calcification,” notes university

The fact that Hungary assumes the rotating presidency of the Council of the European Union for six months on July 1 provides an excellent opportunity to extend the exemplary lipid treatment research project of Semmelweis University and Novartis to the EU level, those involved say.

“We welcome the decision that the Hungarian government has prioritized cardiovascular health on the EU agenda and initiated the adoption of EU legislation for a European-level action plan,” says Matz of Novartis Hungary.

“Hungary is one of the countries where we can cooperate with the best experts. We collaborate with Semmelweis University in several areas, and it is a great joy for us to support the achievement of Hungarian cardiovascular health policy goals through research programs that identify the best possible care methods for those suffering from cardiovascular diseases. In addition, our screening programs focus on prevention to also contribute to improving the health of Hungarians,” she adds.

Novartis says it remains committed to establishing collaborations that, through public and private sector partnerships, provide practical solutions to society’s most significant health problems.

GERGELY HERPAI

Dr. Béla Merkely, Rector of Semmelweis University. Photos by Gergely Herpai.

Colette Matz, country president of Novartis Hungary

Deputy State Secretary for Health Policy Judit Bidló

AmCham and GE: 35 Years of Business, Innovation and Investing in Hungary

Ahead of their joint 35th anniversary gala on June 7, the Budapest Business Journal sat down with Írisz LippaiNagy, CEO of the American Chamber of Commerce in Hungary and Endre Ascsillán, GE’s chief strategic and government affairs officer, and global head of business development at GE Vernova Steam Power, Nuclear New Build.

challenges, but time has shown that it’s by the community and our collaborative initiatives that we can shape our present and future and get things done.

BBJ: Congratulations to both AmCham and GE. In addition to the fact that you have both been in Hungary for 35 years, what else links AmCham and GE?

Írisz Lippai-Nagy: It’s our commitment to key U.S. values such as transparency, progress, and the high quality of our work, as well as our willingness to engage in multi-stakeholder discussions to drive innovation and enhance competitiveness that connects us.

Endre Ascsillán: As an American company with a global footprint, we are proud to be one of the founding members of AmCham in Hungary, bringing a company culture and innovation expertise to the country that supports the competitiveness of Hungary on global markets. We have been investing for 35 years, in many cases through cooperation with AmCham, building local and regional relationships.

BBJ: What has been the most significant lesson (or lessons) you have learned about getting things done in Hungary over these three and a half decades?

IL-N: Over the years, we’ve built a powerful business community at AmCham, consisting of more than 300 members, including American, Hungarian and other international businesses. We have faced several

EA: Unity is our strength. If we have allies, a collaborative approach brings the best results. We both believe in partnerships and have been trusted partners in regulatory affairs and policy shaping all these years that support innovation and global competitiveness in Hungary. It’s a proud accomplishment that GE’s company values, expertise in innovation, manufacturing technology, lean mindset, environment, health and safety and other standards have positioned Hungary and the Hungarian workforce as global players in the market.

BBJ: You both represent core American values. Are these as vital (and welcome) in Hungary today as in 1989?

IL-N: We can undoubtedly see an opening towards the East, but at the same time, as a European country, Hungary holds Western and American values that have become part of our culture, including our business culture, and resonates with many of us. In today’s rapidly changing world, timeless Western values, such as democracy, diversity, equality, and transparency, are more crucial than ever to build a stable and sustainable society capable of staying resilient even amidst constant changes. I’m proud that our business community stands by them and that we can have the support of such impactful companies as GE.

EA: Yes, our technology expertise, innovation capabilities, and global reach are vital for serving our customers and partners effectively. We have consistently put these

BBJ: There is one very concrete link between AmCham and GE in Hungary, and that is the late Dr. Iván Völgyes. Credited by many as the father of modern lobbying in Hungary, Völgyes was born in Budapest in 1936 and moved to the United States in 1956. After the fall of the Iron Curtain, he became instrumental in bringing many U.S.-based businesses to Hungary. As the chief advisor to General Electric in Hungary, Völgyes helped bring six of GE’s 10 global core businesses and more than USD 1 billion in investment to the country. He also has close ties to AmCham through his dedicated efforts to foster U.S.-Hungary business relations, in tribute to which the chamber established an award named in his honor. What do you think he would make of your joint 35th anniversary?

IL-N: I believe he would welcome our joint celebration, reflecting our strong partnership over the years and our shared interest and commitment to promoting U.S.-Hungarian business relations and the local business environment. This serves as the continuation of the legacy he started, just as the Dr. Iván Völgyes Award recognizes those individuals who have contributed significantly to the development of the Hungarian American business relations.

AE: I hope he would feel proud to see GE’s contributions toward the Hungarian economy. Today, these include:

assets to work in building a strong local presence by leveraging the importance of our Hungarian activities and highly skilled local teams specialized in important technology sectors. Hungary was and remains a critical part of this work.

BBJ: AmCham Hungary was the first chamber in the region. GE was a similar pathfinder. Did you see part of what you were doing here as being regional role models?

IL-N: Our activities, whether it’s our professional, social, or advocacy work, have been focused primarily on our members and addressing specific challenges within Hungary; in doing so, we aimed to set a standard. At the same time, as a member of the AmCham network spanning almost 50 countries in Europe and Eurasia, we participate in international initiatives and gladly share news about our innovative projects. Furthermore, we’re delighted to note that representatives from our member companies enthusiastically spread the word about our activities. This not only amplifies our reach but also fills us with joy and pride, knowing that our efforts are making a positive impact and setting us apart in our field.

AE: GE has expanded its presence significantly since acquiring Tungsram in 1989 by bringing all primary business divisions to Hungary, creating one of GE’s most important hubs in Europe. The recent formation of three independent industry-leading global public companies focused on aviation, healthcare, and energy demonstrates GE’s remarkable legacy and ensures continued value creation for customers.

• High-performance gas turbine components and small- and medium-sized power plants are being exported to more than 160 countries from GE Vernova’s state-of-the-art factory in Veresegyház.

Hungary is one of the seven global strategic sites of GE HealthCare and home to data science teams contributing significantly to numerous precision care solutions, including oncology, cardiology, and neurology applications.

• GE Aerospace’s unique aircraft parts repair facility in Central and Eastern Europe is based in Veresegyház. The plant serves more than 170 customers worldwide by supporting GE Aerospace’s major overhaul factories and airlines.

ROBIN MARSHALL

Írisz Lippai-Nagy

Endre Ascsillán

2 Business

AutoWallis Unveils its Strategic Vision for Expansion up to 2028

AutoWallis is setting ambitious financial targets for 2028, aiming to double its revenue to HUF 750 billion and EBITDA to HUF 40 bln from last year’s figures. As a prominent automotive and mobility service provider across 16 countries and representing 24 car brands, the company says it plans to maintain a steady pace of 2-3 acquisitions per year and is looking to initiate dividend payments post2026 after a period of intense growth.

with more than half of its revenue consistently coming from foreign markets,” Müllner highlighted.

He also noted that the company achieved growth amid economic challenges such as the COVID-19 pandemic, supply chain issues affecting automotive manufacturing, high inflation, and rising financing costs, proving the resilience of its diversified brand and country portfolio.

The renewed strategic vision for AutoWallis Group comes after the company surpassed its 2025 financial goals last year. Since its public listing in 2019, the auto retailer has seen a significant upturn in performance: its revenue has quadrupled, and profits have increased tenfold.

“Over the past five years, the expansion of the group was primarily transactional, while our organic growth also exceeded industry trends,” stated Zsolt Müllner, chairman of AutoWallis, at the firm’s May 6 investor day. Since 2019, AutoWallis has drawn HUF 48 billion from the capital market, increased the number of brands it represents from nine to 24, completed 11 acquisitions, and expanded its operations to 16 countries.

“Due to the exceptional trend-like growth over the past years, AutoWallis has now become an international group

“Thanks to continuous development, the company, listed in the ‘Premium’ category of the Budapest Stock Exchange, is poised for heightened attention from international investors,” Müllner predicted.

According to the company forecasts, the number of autos sold is expected to rise from 44,909 in 2023 to 100,000 by 2028. The firm’s updated growth strategy estimates that its revenues could more than double by 2028, reaching up to HUF 750 bln, representing a 15% annual growth rate.

Doubling Digits

Similarly, the company’s EBITDA is projected to double, reaching close to HUF 40 bln by 2028. The pre-tax profit is also expected to grow at an annual rate of 16%, reaching HUF 25 bln by the target year, more than double the figure for 2023.

“Hungarian stocks generally trade at low valuation multiples, but AutoWallis is particularly interesting due to its significant growth story,” Gábor Bukta, head of analysis at leading financial

could secure long-term positions,” Ormosy noted. He discussed AutoWallis’ strategy to continue expanding in the Central and Eastern European region while broadening its represented brands, primarily focusing on emerging manufacturers.

“AutoWallis expects that the more intense phase of expansion could last until 2026, followed by a stable, normalizing growth phase,” he predicted.

Financial Roadmap

In the short term, AutoWallis has laid out a clear financial roadmap that eschews further capital increases. Instead, the corporation is set on bolstering its strategy through what it calls the prudent utilization of accrued profits, supplemented primarily by bond and banking resources.

“There

is expected to be considerable attrition and consolidation among Chinese brands, but the winners could secure long-term positions.”

services consultancy Concorde Securities Zrt., noted. “The substantial growth deserves higher valuation multiples. If the growth narrative and high margins persist, they could significantly boost the stock price.”

Bukta admitted that, at the time of speaking, the updated figures had not yet been incorporated into his firm’s model, which currently had a target price of HUF 218, while AutoWallis’ stock had closed at HUF 151.5 on

May 3.

Concorde’s forecast was based on revenue of HUF 534 bln, with an EBITDA expectation of HUF 27.7 bln.

Discussing the latest trends, AutoWallis CEO Gábor Ormosy suggested that EU regulations might be reaching a turning point regarding the forced electrification of the automotive industry. He said that significant regional adoption differences are apparent, and the spread of EVs is occurring slower than anticipated.

Ormosy also touched on the increasing presence of Chinese automakers, for whom the adoption of electric vehicles could represent a glass ceiling; moreover, their cost advantage over European rivals could diminish while competition intensifies with Tesla and traditional car manufacturers.

“There is expected to be considerable attrition and consolidation among Chinese brands, but the winners

This fiscal approach underpins the management’s intention to table a proposal for predictable, longterm dividend disbursements to its shareholders post-2026. Concurrently, the management is mindful of the ongoing consolidation, which is expected to reveal additional opportunities, thereby permitting the reinvestment of accrued profits to fuel continued growth, as has been the norm.

AutoWallis is far from navigating toward

2028

on autopilot but instead says it is committed to significantly enhancing its visibility and stature within the capital markets. Central to this ambition is acquiring an Environmental, Social, and Governance rating, which will anchor the company’s credentials in sustainable business practices.

Furthermore, the strategy includes accessing broader green financing options to underscore its commitment to environmental sustainability, expanding coverage by financial analysts to improve market visibility, purchasing its own shares to signal confidence to the market, and diversifying its shareholder base to include more international institutional investors.

Moreover, Ormosy speculated on pursuing a dual listing on another stock exchange. Such an ambitious move would be predicated on the company’s growth achieving a substantial scale in select countries such as the Czech Republic, Poland, and Romania. As highlighted during the investor day presentation, such an expansion could justify tapping into local financial resources for further growth.

AutoWallis CEO Gábor Ormosy addresses the audience during the firm’s investor day on May 3. Photo by Gergely Herpai.

Make Work More Inclusive: Join EU Diversity Month

Every May, EU Diversity Month aims to promote fair workplaces to create a society and economy based on equal opportunities. As the exclusive representative of the EU Diversity Charter in Hungary, the Hungarian Business Leaders Forum is participating for the seventh time in what it says is the largest joint EU project to date.

Due to the acceleration of digitalization, automation, increased care needs, demographic changes, and geographically dispersed employees,

the world of work is being transformed significantly, which can represent a severe threat but can also be shaped into an opportunity, HBLF says. Therefore, the 2024 European Diversity Month focuses on how organizations take advantage of the future of work and adapt to a constantly changing world. The HBLF will include activities planned for the month in the

Budapest BSC Charity Beach Volleyball Tournament

6 June 2024

organization’s May event calendar and invites member companies to share their plans with the forum so it can promote them to a broader audience.

“The goal of the charter is to eliminate discrimination based on gender, race, religion, or any other factor: the programs planned for May put special emphasis on the matter,” says Zsuzsa Gárdus, the board member responsible for HBLF’s Diversity Charter.

Inspiring Others

“Once again, we excitedly await the diversity-related initiatives of our members and domestic companies during this period, which we will promote as widely as possible on our charter website (sokszinusegikarta.hu), in our newsletters, and on our social media platforms. We hope that, by sharing best practices, we can inspire others to create a more inclusive work environment,” she adds.

The Budapest Festival Orchestra (BFZ) was among the first to register its project: the BFZ organizes Community Weeks, during which musicians visit nursing homes, schools, underprivileged children,

“We hope that, by sharing best practices, we can inspire others to create a more inclusive work environment.”

synagogues, and churches to play music. Their goal is to make classical music available to people of all ages and in all circumstances.

“A band can do a lot for its diversity if it does everything to make its audience diverse and strengthens itself as a network of small communities,” explains Orsolya Erdődy, manager-director of the Budapest Festival Orchestra.

The European Diversity Charter initiative was launched in 2004. It records and promotes the EU’s antidiscrimination and equal opportunity guidelines among employers. The charter initiative is currently active in 26 European countries. More information can be found at eudiversity2024.eu/europeandiversity-month-2024/ Hungarian businesses and organizations involved in the 2024 Diversity Month include Abacus Medicine Hungary, AMC Networks Central Europe Kft., Budapest Festival Orchestra, Danone Kft., E.ON Hungária Zrt., ESAB Kft., Hegymegi-Barakonyi and Fehérváry Baker & McKenzie Law Firm, Henkel Hungary, Jobsgarden Kft., KPMG

Hungary, Legrand Zrt., Magyar Telekom, MVÜK Zrt., Tesco Hungary, the Women in Energy Association, and Yettel Hungary.

The HBLF was founded by the personal initiative of the United Kingdom’s King Charles III (then Prince of Wales) in 1992 as the Hungarian organization of The Prince of Wales International Business Leaders Forum. According to its mission statement, the CSRfocused HBLF “is committed to promoting responsible business practices that benefit business and society, and which help to achieve social, economical and environmentally sustainable development in Hungary.”

The HBLF Diversity Awards and Charter Signing Ceremony from 2023. Photo by HBLF.

BSD Unites Leaders and Experts to Shape Future of Regional Security

The organizers of the first Budapest Security Dialogue conference in the Hungarian capital have said it exceeded all expectations. The 700-plus participants attending the Budapest Marriott Hotel on April 26-27 heard from more than 40 speakers.

BSD aims to become a prominent platform for discussing regional security issues. The event is “deliberately conceived as a counterpart to the Munich Security Conference,” the organizers told the Budapest Business Journal. Hungary’s Minister of Defense Kristóf Szalay-Bobrovniczky opened the conference by declaring, “The most important thing is peace!”

The two-day event brought together prominent keynote speakers, including defense ministers from Hungary, Bosnia and Herzegovina, Kosovo, Montenegro, Serbia, and Slovakia, and the EU High Representative for Foreign Affairs Josep Burrell, whose remit includes the union’s common security and defense policy.

A ministerial meeting of the Central European Defense Cooperation with Balkan states was held in Budapest the day before the conference opened.

Also attended by chiefs of staff and NATO and EU representatives as well as 18 ambassadors, the conference aimed to foster comprehensive discussions on crucial

topics shaping security in Central and Southeastern Europe. Among the 20 participating companies were Airbus, Rheinmetall and Saab, as well as institutional partners such as Dialog Hungary.

Key topics included EU-Western Balkans cooperation and European defense enhancement. The event emphasized bridge-building and collaboration in addressing regional security challenges. Alongside the talk, the BSD also featured a defense industry exhibition.

In his opening keynote, Szalay-Bobrovniczky emphasized the importance of peace, lamenting what he called the current “war fever” in Europe and the world. He stressed that Europe must be able to protect itself and that Central Europe and the Western Balkans must articulate their positions on this crucial issue.

High-tech Force

He warned that Hungary cannot afford to be weak. He emphasized the country’s efforts to modernize its army since 2010, dismantling outdated Soviet-era structures and building a high-tech force fully compatible with NATO standards.

Robert Kaliňák, Slovakia’s Deputy Prime Minister and Minister of Defense, expressed concerns about the slow pace of EU integration in the Western Balkans, citing the EU’s lack of progress since 2003. He emphasized the importance of cooperation between neighboring countries, citing Slovakia and Hungary’s “near-optimal partnership” as an example.

Insights from Montenegran and Kosovo ministers emphasized proactive measures to anticipate and address new challenges.

László Palkovics, former technology and industry minister and now CEO of N7 Holding Zrt., said Hungary’s defense industry

is at the forefront of the state’s re-equipment efforts. This approach aims not only to drive national security but also to become a key engine for the economy. He added that the country is also looking to establish a presence on the international market and integrate into global supply chains.

Conference discussions touched upon regional security developments, political and military structures, the historical context in the Balkans, and the impact of events like the war in Ukraine on EU enlargement perspectives. The event underlined the significance of unity and strategic cooperation in ensuring peace and stability in the region.

“The BSD clearly filled a significant void in the region, providing a valuable platform for exchange and networking,” said Wolf Illner, managing director of BSD. He said he and his team were “thrilled by the overwhelmingly positive feedback.”

The organizers say they are already planning next year’s event, which will take place in April 2025 with Bosnia-Herzegovina as the focus country. Before that, Illner’s team will stage the Euro Defense Drone Conference in the Hungarian capital this October.

Robert Kaliňák, Slovakia’s Deputy Prime Minister and Minister of Defense.

The room was packed for the keynote speech by Hungary’s Minister of Defense Kristóf Szalay-Bobrovniczky.

Former Minister of Technology and Industry and now CEO of N7 Holding Zrt., László Palkovics.

Gold braid and Palaces: Senior officers talk against the backdrop of Castle Hill.

Cordia Begins Development of Marina City

The residential developer Cordia, part of the Futureal Group, has launched its latest large-scale urban rehabilitation development on a 14-hectare (34.6 acres) former industrial area in Pest’s District XIII.

The mixed-use Marina City complex will have a 1.2 km-long shoreline on the banks of the Danube. A waterfront, multifunctional promenade and 90,000 sqm of car-free green space will be created. With residential tower blocks reaching 64 meters, most apartments will offer views of the river and the Buda hills.

The investment is put at HUF 400 billion. The project will be served by direct metro connections 10 minutes from the city center and more than 100 shops, restaurants, service facilities, and sports amenities. According to the development plans, more than 2,500 apartments will be built in several phases.

“Since its foundation, Cordia and the Futureal Group have been committed to revitalizing neglected

PRESENTED CONTENT

urban neighborhoods,” Gábor Futó, co-founder of Futureal, said at the cornerstone-laying ceremony for Marina City. Reference projects include Corvin Promenade, Etele Plaza (Hungary’s first smart shopping and entertainment center), and the Budapest One office development.

“We are also working on several neighborhood revitalization projects abroad. But we see in this abandoned area a place where buildings have zero local carbon emissions and exceed the strictest, most forwardlooking energy requirements. We have envisioned a neighborhood that provides all services locally,” he added.

Residents of the new scheme will live in an environment that will be entirely car-free as the routes for service vehicles will be underground. A flood protection system is being developed on the site, which will be created by constructing an embankment and applying landscaping elements.

Innovation in Development

Mayor József Tóth emphasized the role of innovation in District XIII’s post-industrialization development through the creation of projects with both residential and business functions and green areas. Futó noted that Marina Center will be next to the river and the Váci út Office Corridor. The site was bought from CIB Bank through an open tender.

“The project consists of several towers along the Danube, the first of which is already under construction and will be completed in two years,” Futó explained. Around 15 towers are planned, with one launched annually; development will take around 17 years.

Hungarian Film Production on Course for Record Year in 2024

Last year, the domestic film industry was hit hard by the months-long strike of U.S. screenwriters and actors, with the shutdowns effectively breaking the year in two. However, since January, the industry has experienced a boom due to the replacement of canceled and postponed foreign productions.

KÁROLY RADNAI

Current trends indicate that 2024 could be the first year in which the volume of Hungarian productions exceeds USD 1 billion.

Hungary is currently one of the top 10 filming locations in the world. The main profile is servicing overseas studios; only the U.K. film industry represents a greater volume in Europe. According to industry estimates, the sector employs nearly 20,000 people in Hungary.

Two decades ago, the total amount of work-for-hire film productions in Hungary was around HUF 3 bln-4 bln a year. After the Hungarian Film Act entered into force in 2004 and the introduction of automatic tax refunds, this had increased tenfold to nearly HUF 30 bln within three

years. By the second half of the 2010s, the Hungarian film industry had made an additional quantum leap: in 2019, the industry spent HUF 200 bln, with a record of HUF 300 bln set in 2022.

Following the trends of 2022, 2023 got off to a strong start, with reasonable expectations of seeing another record-breaking year. However, a strike by U.S. screenwriters in early May, followed by U.S. actors in mid-July, broke the momentum. While the former indicated only a mid-term slowdown, the latter led to an immediate halt for almost all significant productions: without major players, filming could not be resumed in any meaningful way.

In the second half of the year, filming in Hungary was limited to lowerbudget European and independent film productions, causing industry spending eventually to peak at around HUF 200 bln.

Strong Upturn

After the end of the strikes, a strong upturn was expected in 2024, which was confirmed by the first few months of the year. Given their volume and current trends, industry spending is expected to exceed the USD 1 bln mark for the first time this year.

In light of how the scheme works, this will likely cause disruptions in the payment of the 30% cost reimbursement. The available funding is determined in the annual budget,

“We are able to build 64-meter-high buildings as the built-up density on the site is only 35%, with the rest consisting of green areas. […] We also have a building permit for around 100,000 sqm of offices. However, if demand is for residential or other uses, we can develop accordingly as the office market currently does not warrant such a large development,” Futó said.

Heating will be covered by air-towater and ground-source heat pumps, eliminating the need for natural gas or district heating. Solar panels will be installed on the roofs of residential buildings, supplementing the grid electricity required to operate energyproducing equipment from green sources.

“The reception of our pre-sale campaign has been extremely positive; with nearly 50% of the first-phase apartments already sold, we will soon launch the sale of apartments being built in the second phase,” said Tibor Földi, president of Cordia International’s Board of Directors. The overall project was designed by the Danish firm Bjarke Ingels Group. Hungary’s Garten Studio Kft. is responsible for the landscape design, while Tér-Team Kft. is handling the flood protection system. Building design was by Dyer Group, Közti, Radius B+S, and Puhl & Dajka Architect Studio.

close to HUF 70 bln in 2024. This will certainly not be enough, meaning there will be a queue for the allocation of grants. Although we are not there yet, without developments and further progress, it will be close to reaching its limit. At the same time, demand is growing internationally, with major film production companies and streaming service providers increasing their appetite for content. If Hungary starts preparations early enough, it could reap even more benefits from this process.

On the one hand, this requires infrastructural development. Investments of this nature are underway at the NFI Studios and Astra Film Studios in Fót and Mogyoród. There are also plans to build new studios, but in professional terms, modernizing and expanding existing facilities makes more sense.

There is also a need to increase the added value of the work completed and tasks performed in Hungary. There is a clear improvement in this respect, as exemplified by the increasing involvement of Hungarian crew members in foreign productions. This is confirmed by the gradual focus shift from physical work to film post-production. It is a promising sign that, in recent years, several Hungarian post-production studios of high professional standards have been established, acquiring valuable references.

Károly Radnai, managing partner of Andersen in Hungary.

GARY J. MORRELL

Artist’s rendering of the Marina City development by Cordia.

3 Special Report

Real Estate: Offices

Challenging Market Environment Means Limited Office Pipeline

New projects in the Budapest office market remain limited as developers exercise caution given the uncertain cost and demand environment. Large ongoing schemes are continuing, although there could be a shortage of quality, contiguous, sustainable spaces in the near future.

From a positive perspective, developers are delivering ever more high-quality and sustainable projects in response to market demand pressures and evolving EU Taxonomy regulations.

“Concerns persist over the rising vacancy rate, compounded by declining pre-lease activity leading to lower occupation rates in new developments,” comments Cushman & Wakefield.

CBRE says the Budapest office pipeline is dwindling as projects are delivered. Overall vacancy is expected to rise to 14%, although this will likely fall again as new supply dries up. The overall dynamic for the next few years is relatively subdued: the forecast completion volume for 2024 is around 173,000 sqm, and only 68,000 sqm for next year.

Despite a broad range of concerns that take in geopolitics and the economy, office working practices, and increasing maintenance and energy costs, developers are going ahead with their ongoing singlebuilding or multi-phased projects.

The current financial environment favors those developers who are able to access their own development finances or sell assets to investors. However, with a lull in the investment market, an exit strategy for a developer at the desired time and at a favorable price is more difficult to conclude.

“Apart from a handful of ongoing projects, developers are still reluctant to jump into new ones. Those that have already started need a strong tenant base to continue as planned. A 30-35% pre-lease needs to be in place before a project goes ahead in the office market,” comments Valter Kalaus, managing principal at Newmark VLK Hungary. Funding for development is primarily secured through banks, with a focus on green financing. Only a few developers can rely on significant amounts of their own resources, says Kata Mazsaroff, managing director of Colliers Hungary.

Speculative Space

Colliers has traced 213,000 sqm of speculative office space under construction in Budapest, representing 15 projects with a possible handover date by the end of 2025. The total stock is approaching 4.3 million sqm according to the Budapest Research Forum (comprising CBRE, Colliers, Cushman & Wakefield, Eston International, iO Partners and Robertson Hungary; around 3.5 million sqm of this was developed on a speculative basis. The Budapest office market is the second largest in the Central European region after Warsaw.

According to Cushman & Wakefield, approximately 178,000 sqm of new space is expected to be delivered this year, which is exacerbating vacancy rates.

The absence of announced projects for 2026 suggests caution and perhaps a shift towards “brown” redevelopment opportunities, according to Cushman & Wakefield. The consultancy has traced five projects of 30,000 sqm or more.

The Dürer Park I and II by Property Market in Central Pest is scheduled to deliver more than 50,000 sqm of space. The 35,000 sqm Centerpoint III by GTC on the Váci Office Corridor will add another 35,000 sqm. The highest number of developments are in these two areas.

A notable South Buda waterside development is BudaPart, also by Property Market, on a 54-hectare site on the southern bank of the Danube at Kopaszi Gát (dam). The multi-phased, multi-functional project includes office, retail and residential elements, in addition to large park areas. It is based on the concept of developing a new city quarter on the 15-minute rule: everything should be within a short walking distance.

In the next two years, the 38,500 sqm BudaPart Corso, the

25,000 sqm

BudaPart Central and the 22,000 sqm BudaPart Harbor are all scheduled to be delivered.

Most Budapest office projects are by established Hungarian or regional developers. The mixed-use office and hotel building, the Liberty South Wing, by the Hungarian and CEE developer Wing in District IX, has already delivered 10,000 sqm of office space certified to Breeam “Excellent” level.

Construction of the Liberty North Wing is underway, and 20,000 sqm of office space is expected to open in the first half of this year. In another project by Wing, the renovation of the Liget Center Auditorium office complex is set to deliver 3,200 sqm of space in a building opposite the Városliget.

Prolific Developers

The prolific Belgium office developer Atenor is due to deliver the 16,600 sqm BakerStreet in South Buda, having already handed over the 15,5000 sqm RoseVille in District XI. In addition, the Aréna Business Center B, just off District VIII’s Hungária krt., part of the Pest outer boulevard, is scheduled to deliver 15,400 sqm of space.

Another busy Hungarian developer, Futureal, is due to complete the second phase of the Corvin Innovation Campus at a mixed-use office, retail, leisure and residential project close to the center of Pest. Also in central Pest, TriGranit has completed the Millennium Gardens phase II, the final office section at the Millennium City Center on the banks of the Danube by the developer and its owner, Revetas, a specialist real estate investment manager focusing on the CEE region.

One new mixed-use project is the suburban Zugló City Center in Non-central Pest by the residential constructor and developer Bayer Property Hungary, providing office, residential and retail elements.

The developer aims to create a new city quarter. The project is due to deliver around

85,000 sqm of phased office space over this year and next, rising to a total of 150,000 sqm by 2026.

“Office supply will be very moderate as pre-leases of approximately 60-70% are needed to achieve bank financing, and tenants are rather focusing on cost savings, which does not allow them to move to a new scheme, usually demanding around EUR 20-21 per sqm per month,” says Attila Madler, asset management director at CPI.

He adds that demand remains stable, although there is a shift of state tenants moving to developments by government-related developers. Projects will mainly be undertaken at locations where more buildings can be developed and where developers have a good chance to attract state-related tenants to achieve the critical mass of pre-lease, he says.

“Other developers, having no government relations, will start developments once a pre-lease of approximately 60% is secured,” he believes.

GARY J. MORRELL

Liberty by Wing. Photo by Zsolt Hlinka

Real Estate: Office Market Talk 2024

The Budapest Business Journal ’s real estate editor, Gary J. Morrell, canvassed some of the leading players in Budapest’s office market to get a sense of the trends evident in the sector today. Excerpts.

Due to the continuously tightening regulations concerning energy requirements, the focus has shifted to ESG compatibility in recent years, encouraging market participants to concentrate on renovating their office buildings. In this regard, the decrease in total construction demand has resulted in stabilizing prices, which has a clear positive impact on fitout costs and development expenses. The pressure is felt among owners, and those who can meet the tenants’ high energy efficiency expectations will be the ones best able to compete.

In terms of investment, the most sought-after assets, besides the industrial properties, are still new office buildings developed in good locations that prioritize sustainability and energy efficiency. ESG-compliant office buildings typically exhibit lower vacancy rates and higher rental fees than the market average, ensuring stable cash flow. Therefore, they and other ESGcompliant assets can ensure profitable operations in the long term, making them a clear priority in investment decisions.

Kata Mazsaroff, managing director, Colliers Hungary.

One crucial element in the office design and amenities is enabling tenants to have as much flexibility in their work as possible. This entails providing common areas equipped with comfortable amenities for short-term working sessions. The furnishing and IT infrastructure of these spaces should facilitate easy connectivity, while the layout should support concentrated work. Moreover, office buildings should prioritize low energy consumption and minimize environmental encumbrances. They should also offer physical and mental recreation, infrastructure, and on-site convenience services. Until now, prime office locations were typically in city centers or near metro stations. However, now there is

a growing demand for a mid-way office solution, meaning offices are located closer to residential areas rather than solely in the city centers. This shift allows outer districts to serve as smaller “hubs” for larger companies, enabling employees to work not only at the headquarters or from home but also “in-between” locations, wherever they happen to be along their commute.

Attila Madler, chief asset management director, CPI Hungary.

Since COVID-19, the meaning and use of the office environment have changed dramatically. Post-pandemic, the office desk, the cabinet, and even the quality of the environmentally-friendly office chair are no longer the crucial KPIs. Instead, it is the quality and quantity of the community spaces, the additional services of the office building, such as shops and private services, and the visual and non-visual health-related environment and services.

Managing all of the above is so complex that no single player in this ecosystem could solve it alone. The number one message to the readers is to urge that strategic cooperation between the parties is a must. Those who fall behind will be left out.

Solid ESG regulations already offer a wide range of options for becoming an ESG-compliant enterprise. Since the need for such competence is so new, most companies cannot compile a proper compilation of their ESG goals.

Gábor Décsi, CEO, Dome Group.

A newly developed class “A” office will have spacious lobbies, multiple concierge-like services and co-working areas, futuristic and/or a state-ofthe-art modern façade, and greenery. The concept is that service-wise and structurally, it needs to have a superior hotel-like feeling. Offices, at times, tend to become groups of meeting room areas for collective work.

In terms of office work, tendencies vary from company to company. If we were to draw an average from what we experience in the market, we believe the current most common set-up is three times a week in the office, with Mondays and Fridays as home office. However, it is important to state that most companies are trying to lure –in a positive sense – their employees back to the office as they do not find the current working process efficient.

Fabrizo Mazzá, commercial director, HB Reavis Hungary.

Through modernization and technical improvements, property owners can make a big difference in the efficient operation of their properties. To achieve this, close cooperation between PM and FM areas, as well as with the property owners, is essential. The regulatory guidelines for sustainability are already known, but the detailed rules and the implementation regulations have not yet been developed. Compliance with ESG principles requires investment on the ownership side. An essential role of property management is to align tenant and owner expectations.

Although the objectives are the same, different needs may arise in relation to EU taxonomy regulation or, for example, the ESG financing issues and ownership expectations of an overseas company.

International certifications can provide guidance in this harmonization, but compliance with them also implies new obligations.

Zsolt Kákosy MBA MRICS, Senior Director, Head of Property Management, ICON Real Estate Management.

ESG compliance is very subjective regarding new real estate developments and existing buildings. The primary directives are coming from environment-conscious certificates that we all know very well by now, but expressions such as EU Taxonomy, Greenwashing, and GAR (Green Asset Ratio) are the new ones we need to understand. For new constructions, the directives are relatively clear in the technical and social aspects of the regulations. For existing buildings, engineering, procurement, and construction (EPC), thermal image measurement, mass air flow measurements, life cycle assessment (LCA), and climate risk analysis are some of the steps that, in some cases, are not easy to fulfill for a 10-plus-year-old building. Overall, green certifications (mainly Leed and Breeam) are a big help, although not enough.

In addition to ESG considerations, a tenant focus on employee wellbeing is another pivotal factor, given its significance in enticing individuals back to office spaces. Obtaining a Well certificate could serve as an initial step in providing this assurance to employees. Petra Holy, head of office agency, Knight Frank Hungary.

Kata Mazsaroff

Attila Madler

Gábor Décsi

Fabrizo Mazzá

Zsolt Kákosy

Petra Holy

HB Reavis Aims to Become ‘Best, Most Efficient’ Asset Manager

When work commenced on Agora Budapest in March 2017, it was envisaged as a dual-phased multi-use complex. The original elements, Agora Hub and Agora Tower, remain “outstanding” contributions to the city, says Fabrizio Mazzá the commercial director and country manager for developer HB Reavis.

its Hungarian HQ in Agora, while BP transferred its Global Business Services office.

are heavily invested in it, strategizing around it, and doing everything we can to achieve it,” Mazzá says.

book swaps, portrait photography, pearl beading, yoga classes, bike repair events, rooftop movie night, farmers market, thrift shops, health checks and blood donations.

The reception does not go by that name; Agora has a concierge “because we basically offer the services you would find in a premium hotel.”

That might be providing an umbrella, a bicycle or rollers, arranging for suit cleaning, booking a hotel or restaurant and calling a cab. You could order a courier, a cake, or some flowers, and you can even pay through the app, should you wish.

“The ultimate goal is to facilitate the tenants and their clients’ lives as well as to ease these processes to generate a more time-efficient environment in their everyday office life,” Mazzá says.

“We work closely with the tenant management to give these addedvalue things, so employees are happy to attend to the office more often. Whenever there is an issue for the tenants, we try to support them.” Another service offered in Hungary is the Qubes brand of flexible, serviced offices.

“We opened three floors of 5,000 sqm, and in a serviced office such as Qubes, that implements around 600 desks.

“HB Reavis usually constructs high-end ‘A++’ category offices, and these are the only ones in Hungary,” says Mazzá. He adds that the Hub buildings are the only Breeam ‘Outstanding’ offices in Hungary, making them the greenest in the country.

“Agora has around 94-95% occupancy.

Our core tenants are Raiffeisen, BP, Huawei and B+N,” Italian national Mazzá says. Raiffeisen established

HB Reavis and ESG

Parmar Abhishek, head of sustainable development for HB Reavis, based in the London office, also answered our questions about the company and its sustainability stance.

BBJ: What role does ESG play in HB Reavis developments? What thirdparty accreditation agencies do you use and why?

Parmar Abhishek: ESG plays a pivotal role in HB Reavis developments, influencing every aspect of our operations as an integrated developer that handles design, construction, and asset management in-house. ESG principles are deeply ingrained

“We had to revise our strategy. The environment was constantly changing, not only COVID but also the war [in Ukraine], and the pricing of constructions and raw materials has increased substantially. It’s been a difficult transition for all developers in Hungary,” Mazzá explains.

The remainder of the Agora plot was sold to MBH Bank for its new HQ. But Mazzá says HB Reavis choosing not to complete the campus development (near the busy Róbert Károly körút and the Váci út office corridor) should not be seen as a lack of commitment to the market so much as a redefinition of its plans.

“We don’t just want to be one of the best developers in Europe; we also want to be one the best asset managers. This is our next step, our focus. We

in our processes, with each department actively contributing to our ambitious carbon emission reduction goals, aligned with the Science Based Targets initiative (SBTi) 1.5°C pathway.

For third-party accreditations, we ensure that all new buildings achieve at least a Breeam, Leed, or DGNB certification at the highest level appropriate for their location. Additionally, all new buildings aim for the Well Building Standard certification at the “Platinum” level, reflecting our commitment to the highest standards of tenant health and wellbeing. Other certifications may be pursued on a case-by-case basis, depending on the project location.

“Everything we do is to ensure that our tenants are fully satisfied with our services and that our buildings maintain that state-of-the-art status. We must become one of the best asset managers and the most efficient out there.”

Getting More From the More App

One obvious indication of that is the More app the company has developed for its tenants to access services. Mazzá estimates that the developer puts on a couple of hundred events a year, for which it has a dedicated team.

The list is impressively long, a random sampling of which includes winetasting, makeup lectures and courses,

BBJ: What do you expect to be the next significant steps for the industry in ESG?

PA: In response to growing ESG demands, the commercial real estate industry is poised for transformative advancements. Whilst EU Taxonomy has already brought about the reporting requirements through CSRD for listed companies from 2023, we know that enhanced transparency and reporting for non-listed and SMEs will become crucial, with detailed disclosures on environmental and social impacts aligning with global standards like GRESB and TCFD.

The sector will also harness advanced technologies such as AI, IoT, and blockchain to boost sustainability and transparency.

[….] We have maintained above 80% occupancy for the last three years. Also, in 2022, we managed to lease 200 desks to one client, defining the largest services office transaction in Europe that year.”

The nature of serviced offices makes it harder to reach full capacity, but there have been some real success stories.

“We’ve had a client that arrived here with 12 desks, grew to 140 in two years, and then moved within Agora. This is fantastic; a client moved in and liked us so much as the landlord and the product and things that we do that, instead of moving away, they remained with us and signed a long-term traditional lease. For us, it’s the proof that we not only did well in constructing and designing the product, but we’ve been good as hosts and landlords with services.”

Social aspects will gain prominence, emphasizing community engagement and inclusivity in real estate projects. A shift towards regenerative practices will focus on creating buildings that positively impact their environments and communities. As regulations tighten, compliance will become more integral, affecting everything from construction to operations and tenant interactions. Finally, financial structures will evolve to support ESG compliance more robustly, with mechanisms like green bonds and sustainabilitylinked loans becoming more prevalent. These steps are integral to the industry’s commitment to sustainability, social responsibility, and robust governance.

ROBIN MARSHALL

Fabrizio Mazzá

Office Demand Undergoing Fundamental Changes

As demand has fallen in the Budapest office market, overall vacancy has risen. There are other concerns at play, however, not least the availability of larger floorplans and well-located, ESGcompliant properties.

The speculative pipeline to the end of 2025 is put at around 200,000 sqm, a significant proportion of which is preleased. Further, there are concerns about the proportion of the 4.37 million sqm of Budapest space that is future-proof or, indeed, fit for purpose today.

Development in line with ESG criteria is central to attracting tenants and, in turn, meeting staff, lender, and investor expectations, not to mention national and EU environmental regulations.

Colliers estimated net annual take-up to be 230,000 sqm, with gross take-up at 480,000 sqm. The vacancy rate currently stands at around 13%, a year-on-year increase of 1.5%.

Cushman & Wakefield sees office demand of 220,000 sqm, which aligns with the five-year average.

The Hungarian ultra-low-cost airline Wizz Air has recently relocated its headquarters to a 8,000 sqm space

in the Breeam-accredited Millennium Tower by TriGranit, part of the Millennium City Center office park.

With limited supply and pipeline, large contiguous, quality and sustainable office spaces are becoming more challenging to source in the Budapest office market. The long-term lease was concluded with very flexible conditions, according to Valter Kalaus, managing director of Newmark VLK Hungary, which provided tenant representation on the transaction.

“New working habits have emerged, notably with the widespread adoption of the home office,” comments Cushman & Wakefield. “Companies have recently begun to consciously assess their options and revalue their real estate to create a place for returning employees to be productive. These spaces need to be highly functional and sustainable, offering a high-quality experience to encourage engagement while balancing costs.”

“In our experience, the most common setup is the ‘3-2’ approach, which means that employees get to spend [a minimum of] three days in the office and two days working from home,” says Máté Galambos, leasing manager at Atenor.

“Most of the leases that we have signed in the past years supported this way of working through the layout of the office

and the number of workstations and, therefore, the average size of the office leases has started to shrink,” he adds.

Stricter Agreements

Successful building owners need stricter and more ESG-focused agreements for the operation of their buildings.

“On the other side, the carbon print of the operation can be decreased only in cooperation with the tenants: that is why the conclusion and then regular execution of green lease agreements becomes more important,” argues Attila Madler, chief asset management officer at CPI Hungary.

“This means setting up and operating a new layer of cooperation with the tenants that sets common ESG targets, decides on common measures/behaviors, measures their fulfillment, and gives feedback on the results,” he explains.

One concern with ESG and the tenants’ preference for newer, more sustainable office buildings is that only

30%

of the office stock is less than five years old, according to Cushman & Wakefield. Approximately 37% of Budapest office stock lacks any green accreditation, although that is the norm for all new developments.

Breeam is the most popular thirdparty accreditation system with developers; 77,000 sqm of the 102,000 sqm delivered in 2023 used the Building Research Establishment Environmental Assessment Method, according to CBRE.

Breeam is followed by Leed and, increasingly, Well, which deals with how a building impacts the wellness of its occupants, and Access4You,

which aims to make buildings more inclusive and accessible to all.

Reflecting the growing concern with ESG-related issues, more building owners are opting for Breeam and Leed “In-Use” accreditations. Although the major priorities of office occupiers were traditionally viewed as location and rental fees, the recruitment and retention of the workforce has become a more critical issue in tight labor markets across Hungary and the broader CEE region.

Thus, providing a healthy and aesthetically appealing atmosphere has also become an important factor in the recruitment and retention of staff for companies. It doesn’t hurt that it also leads to improved productivity.

Well Certification

Currently, there are 180,000 sqm of office buildings in Budapest that are Well Core Certified in Budapest. By the end of the year, that number could reach 220,000 sqm.

“However, to reach this number, it is necessary for the first two Well office buildings in Budapest to be re-certified,” says Regina Kurucz, a sustainability consultant and Well assessor. “Corvin 5 Technology and Science Park and Nordic Light Trio gained Certification in 2021, and projects have to be re-certified every three years with on-site performance testing to prove that they are still operating in a way that supports human health and safety,” she explains.

“The National Bank of Hungary has enrolled its headquarters in Szabadság tér for Well Certification and celebrated pre-certification in April during the visit of the International Well Building Institute to Budapest,” Kurucz says.

She believes that, in the next couple of years, people will become more conscious about the connection between the built environment and their personal health.

Leases are becoming more complex and take longer to negotiate; the average is now six to eight months.

“We have had clients who are very interested in the features of the building. We have leases where we take on the responsibility to attain a final Breeam “Excellent” accreditation, and others where we agree to provide almost

100%

renewable energy for specific premises,” comments Galambos of Atenor Hungary.

“Breeam or Leed rating is essential for multi-national companies. But even the local companies, which have not always been sustainability conscious, are now catching up. It’s not just boxticking; they care a lot about this, given the energy crisis,” he adds.

ESG is about a lot of data management, data collection and reporting; therefore, all stakeholders must act and work accordingly, according to Zsombor Barta, a sustainability consultant and ambassador to (and former president of) the Hungarian Green Building Council.

“Tenants and owners need to report about their ESG performances; therefore, they need reliable and transparent data. This needs to be collected and reported accordingly. This is for sure a challenge for everybody, but in the end, ESG is also not rocket science, and I am sure the market and the stakeholders can manage these new challenges and adapt to the new requirements soon,” Barta concludes.

GARY J. MORRELL

The Finta Studio-designed and Well-accredited MSD office in the Millennium Gardens office building, part of the Millennium City Center in the South Pest office corridor.

Celebrating the ‘Fingerprints’ of Architects and Investors

Zsolt Miklóshalmi, director of architecture at Óbuda Group, discusses the synergies between the architecture, interior design, sustainability consultancy, and project management elements of the firm. He believes bringing them together under one roof has underscored three decades of success.

BBJ: How long has Óbuda Group operated in the real estate market, and how big is the company?

Zsolt Miklóshalmi: The Hungarianowned Óbuda Group has operated in Hungary and the Central European region for more than 35 years. The company has been involved in many of the country’s most significant real estate investments in the last few years. Our more than 250 professionals specialize in large-scale (more than 10,000 sq m) office, industrial, residential and public realm real estate, as well as infrastructural developments.

BBJ: What about the architectural side of the business?

ZsM: Óbuda Group founded the architectural bureau in 2002; since then, it has become one of the largest design studios in Hungary with 80 architects. Our primary focus, beside architectural and integrated design, are concept, BIM, interior, road and utility design, as well as design project management.

BBJ: Should a firm have an architectural fingerprint? Should you be able to identify an “Óbuda school,” or is every project unique?

ZsM: To an extent, it depends on the real estate developer or investor, and, of course, every project is considered individually. But I believe you can still see the “fingerprints” of the “Óbuda school” in two specific characteristics: technical quality and architectural quality. On every building we work on, you can see the technical quality, the engineering behind the design that makes our work enduring. As for the architecture, I think our mission

statement, “Think Ahead,” provides an excellent answer. Our designs are intelligent, responsive and sustainable. Being intelligent means that we understand the client’s requirements and add our expertise to that. Based on these two things, we create spaces and designs that are responsive, which means that we are not creating buildings for ourselves but for the people who will use them, and we react to the environmental and architectural context. The third quality is sustainability, which is very important nowadays and is becoming more so. We have an in-house sustainability team that advises on and obtains certifications from organizations such as Breeam, Leed, and Well for the projects. We operate an in-house architectural jury, where we check the quality of the designs. We conduct BIM [Building Information Modeling] and sustainability analysis to reduce waste and make our projects more efficient, which benefits the clients, the investors, and the people who use our buildings.

BBJ: Has sustainability always been something the firm has tried to implement?

ZsM: Thirty-five years ago, it wasn’t in focus in Hungary, but Óbuda Group was one of the first companies that understood the importance of sustainability and established an in-house department to deal with this. We are proud that we obtained the most Breeam certifications in Hungary

I see a trend where many of these buildings are in a competition with each other, and it has pushed the market toward premium quality. From our point of view, we are happy with this. When the client is interested in quality, we are delighted to add our services to it. Investors are also very interested in energy consumption, and that is somewhere else where we can advise them on how to build and maintain a system that can make the most efficient use of the utilities. One good example is the MOL Campus, where we were contributing as sustainability and CAFM BIM consultants: all the systems are centrally monitored and optimized.

BBJ: What sets you apart from your peers when it comes to architecture and design-related services?

ZsM: Besides our up-to-date professional knowledge, expertise and experience, our USP is the synergy between our architectural studio and project management firm. You can think of it as a “one-stopshop” where we can provide engineering services from the concept design all the way up to the handover.

for our partners, which reflects that we were one of the pioneers and we are one of the market leaders in this industry.

BBJ: What are the latest architectural trends for office design? Is Hungary a trendsetter or a follower?

ZsM: It’s a good question; I think if architecture has a “fingerprint,” the investor has one too. Investors have a massive effect on the market because the architects answer the questions the investors ask. There are trends in the Hungarian market, but they differ in each sector.

Where there are multinational companies, we see that they bring standard requirements across Europe, across the board. But there are other investors, and their focus may differ. In general, all investors understand they are in a race for talents, and one of the critical tools for them is the working environment. After COVID, I would say that all the players are in a race with their employees’ living rooms. That’s why they are looking for high quality, but also something special that can demonstrate their identity towards the workers so that the employees feel they are part of this company and share its values.

We identified four key scopes to ensure the success of a project, besides good architecture: interior design; sustainability; BIM; project management and technical supervision. We can provide all these services in-house, so we can guarantee the building will be of a high-quality standard.

“On every building we work on, you can see the technical quality, the engineering behind the design that makes our work enduring. As for the architecture, I think our mission statement, ‘Think Ahead,’ provides an excellent answer. Our designs are intelligent, responsive and sustainable.”

BBJ: We know that construction generates a lot of CO2 emissions, but ESG requirements are becoming more stringent, and the circular economy is just beginning to gain ground. Are you optimistic for the future?

ZsM: The circular economy offers an opportunity to investigate these ESG issues more deeply to see where we really should find solutions to be more efficient and sustainable. This is what the world needs in the long term. We have to understand that humans simply cannot create so much waste. Building materials must be optimized, including recycling and waste management. We should treat it as we do with environmental friendly materials in everyday life. For example, for a large part, plastic is not part of our lives anymore, which is good, but there was a time when one could not conceive of a life without bags or bottles made of plastic. This is something similar. We should not imagine our lives without recycling materials, including those used in construction.

ROBIN MARSHALL

Zsolt Miklóshalmi

Investment Market Entering Transitional Phase

High-end offices have traditionally been seen as a prize investment destination. However, as with other sectors, the market is going through a “price rediscovery” period with a gap between buyer and seller expectations that will continue throughout this year. At the same time, the imposition of ESG criteria represents a new era.

Despite these issues, the CEE-6 (Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia) still show investment potential, in the view of Colliers. Sellers are re-assessing their strategies and optimizing their portfolios to reflect the central importance of sustainability issues for all stakeholders.

“ESG compliance is becoming the market norm for investment transactions, reflecting a broader commitment to sustainability from all parties. However, given the current investment environment, the timing in terms of ESG costs is not ideal,” says Kevin Turpin, head of CEE capital markets at Colliers.

According to Colliers data, office was the most active CEE investment sector from 2018 to 2023, accounting for 41% ofthe investment volume, compared to 26% for industrial and 23% for retail.

Bence Vécsey, head of investment services at Colliers Hungary, estimates that, given the current environment, the total investment volume for Hungary for 2023 could be around EUR 500 million. Hungary represented about 10%

of CEE-6 volumes from 2019 to 2023, with Poland the leading regional investment destination, with EUR 27 bln, the Czech Republic

The first 27,000 sqm phase of H2Offices by Skanska was sold last year to the Hungarian Erste Real Estate Fund, the third office transaction between the two parties. Colliers facilitated the deal.

EUR 10.6 bln, Hungary EUR 5 bln and Romania EUR 4 bln.

Current yields for prime offices in Budapest stand at an estimated 6.25%. This provides a yield premium on Prague (with the lowest yields in the region) at 5.5%. Budapest has an office stock of 4.4 million sqm with a vacancy rate of 13%. Prime capital values for office

are lower than in Poland and the Czech Republic, although significantly higher than in Romania and Slovakia. However, this is less than 50% of Germany, for example, according to Colliers.

Cushman & Wakefield recorded EUR 630 mln of investment volume for Hungary in 2023, representing a 43% fall in volume, year-on-year.

GARY J. MORRELL

Office was the most prominent sector, representing around 46% of the total. It has traditionally been the prime investment destination, although, in the present environment, available assets are not generally being purchased.

Hungary has long seen a high proportion of investment activity undertaken by domestic players. Analysts see domestic investors as increasingly active, capable of acting across the full range of traditional asset classes and risk profiles.

Domestic Players

For Hungary, the amount of domestic capital in the investment market in 2023 was 62%, while for the Czech Republic, the figure stood at 46%, and it was just 2% in Poland, where international investors dominate. Analysts now divide the funding sources in CEE between domestic national investors, “local” regional actors, and international players.

One of the most notable deals last year, facilitated by Colliers, was the acquisition of the first 27,000 sqm phase of H2Offices by the Hungarian Erste Real Estate Fund from Skanska. It was the third office transaction between the two parties.

“For an exit strategy, ESG has become a fundamental consideration, even for investors who had not prioritized it in the past, as it guarantees sustainable, low-risk operations,” comments Kata Mazsaroff, managing director of Colliers

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Hungary. “Notably, properties with ESG considerations also attract greater tenant interest, supporting stable cash flows.”

She says the H2O Offices deal “serves as a particularly good example of the sale of a modern office building with relatively high occupancy, satisfying both parties at an appropriate price and yield level.”

In another Budapest office investment transaction, Atenor sold the

15,500 sqm

Breeam “Excellent” certified RoseVille office complex to BXR, a London-based fund that now has a presence in Hungary.

“We sold RoseVille to an international investment group with a Hungarian fund. The sale was quick and aligned with current market conditions. This was the first real estate acquisition by the group in Hungary, and we see it as positive that we have attracted new equity,” said Máté Galambos, director of leasing at Atenor Hungary.

Outside of the capital, GTC has sold the 22,000 sqm Forest Offices in Debrecen to the local city university, a rare office investment deal outside the capital.

Widening Gap

There is a widening gap in Budapest between new and sustainabilityaccredited offices and now outdated older stock. In reaction, some landlords are upgrading earlier-generation

assets to meet today’s requirements. The renovation and redevelopment of such buildings can be a vehicle for the sale of a project to investors.

“While office buildings may currently appear less appealing compared to other real estate assets, we perceive this trend as transient, with valuable properties ultimately attracting appropriate investors.”

This is notably the case in the historical center of Budapest and what passes for its Central Business District, where there is a lack of suitably sized, well-located development sites. Europa Capital has delivered the Academia office center in partnership with ConvergenCE as asset manager after redeveloping the 12,500 sqm building. Five further office refurbishment projects are ongoing in the historic center by Wing and GTC. A significant challenge for facility management is ensuring the transparency of operations. Appropriate data reporting, digital technologies

and automation all help owners and tenants to demonstrate their compliance with regulations, financing requirements or to certificating agencies.

“From both the PM and FM sides, Icon believes in the future of the real estate market, and the office market in particular. From an investment perspective, the office market is still a low-risk, high-return area, but it requires efficient and professional management,” said Zsolt Kákosy, head of PM at Icon Real Estate Management.

“In my opinion, offices will remain viable development and investment options; however, more actions are needed. These are still achievable by examination, planning and procurement policies,” adds Petra Holy, head of office division at King Sturge Hungary.

“By following the EU Taxonomy, developers can make sure that assets still attract international and local investors. It cannot be overstated that real estate represents a longterm investment, subject to cyclical trends in the market,” she notes.

“While office buildings may currently appear less appealing compared to other real estate assets, we perceive this trend as transient, with valuable properties ultimately attracting appropriate investors. Nonetheless, it’s crucial to acknowledge that investors’ enthusiasm is also influenced by tenants’ demands for modern, efficient, and sustainable office spaces,” Holy concludes.

Category ‘A’ office buildings in greater Budapest

Category ‘A’ Office Buildings in Greater Budapest

3

2

1

4

5 TÓPARK BE MY CITY www.topark.hu

6 MILLENNIUM GARDENS www.millenniumgardens.hu www.trigranit.com

A

7 CENTER POINT centerpoint.hu 37,014 42,120 9 270 3 16 564 15.50

Henkel Hungary, MSD, Provident Pénzügyi Zrt., Fressnapf, FIBS, ION Dealogic, L.A.T. Borealis, Aestella Klinika

Honeywell, NIO, Miniszterelnökség, Universal Music, Kraft FM, Clico

HB Reavis Ingatlanfejlesztési Alap (100)

TSZ Development Ingatlanfejlesztő Kft. (100)

(100)

Revetas Capital (100)

1112 Budapest, Boldizsár utca 1–3. (1) 266-2181 office@ futurealgroup.com

1138 Budapest, Esztergomi út 31–39. (70) 672-1580 reception@ agorabudapest.com

1097 Budapest, Könyves Kálmán körút 36. (1) 451-4760 sales@wing.hu

2051 Biatorbágy, Sasbérc út 1. (1) 382-7560, (70) 370-6666 meszarosg@ topark.hu

1095 Budapest, Lechner Ödön fasor 10/B (1) 456-6200 info@trigranit.com

1139 Budapest, Váci út 81–83. (1) 412-3680 leasing@ gtcgroup.com

(100)

Cushman & Wakefield Kft.

CPI Property Group (100)

OTP Ingatlanbefektetési Alap (100)

Gladiátor VII. Ingatlanfejlesztő Alap (100)

1054 Budapest, Szabadság tér 7. (1) 302-9010 office@ bankcenter.hu

1138 Budapest, Népfürdő utca 24–26. (1) 920-2161 erstealapkezelo@ erstealapkezelo.hu

1083 Budapest, Szigony utca 26–30. (1) 266-2181 office@ futurealgroup.com

1138 Budapest, Népfürdő utca 22. (1) 412-3680 leasing@ gtcgroup.com

1097 Budapest, Könyves Kálmán körút 11. (30) 595-4515 peter.kiss@ avisonyoung.com

1095 Budapest, Soroksári út 30–34. (70) 478-0556 offices@cpipg.com

1051 Budapest, Széchenyi István tér 7–8. (30) 654-5393 holub.erika@ iconrem.hu

1097 Budapest, Könyves Kálmán körút 34. (1) 451-4760 sales@wing.hu

1087 Budapest, Könyves Kálmán körút 54–58. (1) 327-2050 info@ psg-irodahazak.hu

1134 Budapest, Dózsa György út 61–63. (1) 412-3680 leasing@ gtcgroup.com

Infogroup (100)

1115 Budapest, Bartók Béla út 105-113. (1) 481-4530 info@infogroup.hu

(100)

1113 Budapest, Bocskai út 134–146. (30) 080-4077 office.leasing.hu@ avisonyoung.com

(100)

1117 Budapest, Budafoki út 91–93. (1) 501-2800 office@caimmo.hu

1117 Budapest, Irinyi József utca 4–20. (1) 374-3040 office.hungary@ cbre.com

1117 Budapest, Budafoki út –sales@budapart.hu

richard.vigh@ cbre.com

iconrem.hu

Budapest, Bence utca 1. (1) 336-0900 vacigreens.b.epulet@ gmail.com

(100)

Nyíltvégű Ingatlan Befektetési Alap (100)

Invest Kft. (100)

1087 Budapest, Hungária körút 40–44. (70) 478-0556 offices@cpipg.com

1092 Budapest, Köztelek utca 6. (1) 501-2800 office@caimmo.hu

1133 Budapest, Váci út 80. (1) 920-2193 erstealapkezelo@ erstealapkezelo.hu

1139 Budapest, Fiastyúk utca 4–8. (1) 785-5208 info@atenor.hu

1068 Budapest, Dózsa György út 84/B (30) 226-5993

1082 Budapest, Futó utca 37–45. (1) 236-6408 horvath.gergely@ otpingatlanalap.hu

1044 Budapest, Váci út 123/A. Ezred utca 2. és 1–3. (1) 541-4974 ipari@wing.hu

Ingatlan Kft. (100)

1088 Budapest, Rákóczi út 1–3. (1) 268-4300 info@ersteingatlan.hu 45 BUDAÖRS TERRAPARK C+D

Kontron, Ariston, TimacAgro, Ricoh, Flaga, FitVoltaira, GroupeSEB, Hufbau, Edco, Dexon, Budasensor, SágaFoods, Goodmills, Honda, NAOS, Trane, JSLogistics, Homlok Építő, Bellinda, PBA Insura, Controltech, Saint Gobain, Progast

2040 Budaörs, Liget utca 3/2. (23) 423-323 info@terrapark.hu 46

Terrapark Kft. www.terrapark.hu

Terrafinanz GmbH (100)

1117 Budapest, Magyar Tudósok körútja 11. (1) 412-3680 leasing@ gtcgroup.com 47

Váci Corner Offices Kft. (100)

Gladiátor III. Ingatlan Befektetési Alap (100)

1138 Budapest, Váci út 144–150. (1) 580-2280 info@ vacicorneroffices.hu

1143 Budapest, Gizella út 51–57. (1) 451-4760 sales@wing.hu

1117 Budapest, Magyar Tudósok körútja 11. (1) 412-3680 leasing@ gtcgroup.com

1134 Budapest, Váci út 47. (1) 374-3040

Nyíltvégű Ingatlan Befektetési Alap (100)

1134 Budapest, Váci út 29–31. (1) 920-2161 erstealapkezelo@ erstealapkezelo.hu

Budapest, Váci út 35. (70) 478-0556 offices@cpipg.com

Alap (100)

1134 Budapest, Váci út 23–27. (1) 382-9100

1117 Budapest, Alíz utca 3. (1) 327-2050 office@robertson.hu

1123 Budapest, Alkotás utca 55–61. (70) 451-2589 szajlai.ipacs. andrea@wfacility.hu

1133 Budapest, Váci út 96–98. (1) 920-2161 erstealapkezelo@ erstealapkezelo.hu

1134 Budapest, Váci út 43. (1) 920-2161 erstealapkezelo@ erstealapkezelo.hu

Ingatlanbefektetési Alap (100)

Erste Nyíltvégű Ingatlan Befektetési Alap (100)

1074 Budapest, Rákóczi út 70–72. (1) 422-3550 info@epkar.hu

1123 Budapest, Alkotás utca 53. (1) 487-5501 office@mompark.hu

1117 Budapest, Alíz utca 2. (1) 920-2161 erstealapkezelo@ erstealapkezelo.hu

1062 Budapest, Teréz körút 55–57. (1) 785-4985 info@naiceland.hu 63

(100)

(100)

Dentons Réczicza Ügyvédi Iroda, Colliers Magyarország Kft., Market Asset Management Zrt., Progress Étteremhálózat Kft., Ománi Szultánátus Nagykövetsége, MIELE Kereskedelmi Kft.

Property Group (100)

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1117 Budapest, Gábor Dénes utca 2. (30) 822-5466 –

2040 Budaörs, Szabadság út 117. (1) 266-9441 info@adventum.hu

1095 Budapest, Lechner Ödön fasor 8. (1) 501-2800 office@caimmo.hu

1027 Budapest, Bem József utca 1/B (30) 147-0421 bemcenter@ propertymarket.hu

1117 Budapest, Buda-part tér 2. (70) 478-0556 offices@cpipg.com

1113 Budapest, Diószegi út 37. (1) 473-1209 leasing@ horizondevelopment.hu

(100) 1036 Budapest, Lajos utca 48–66. (1) 266-9441 info@adventum.hu

Torony Ingatlan Befektetési Alap (100)

Aspius Kft. (100)

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(100)

1134 Budapest, Kassák Lajos utca 19–25. (1) 888-4120 ingatlan@ granitalapkezelo.hu

1117 Budapest, Dombóvári út 26. (1) 241-0081 sales@budapart.hu

1134 Budapest, Dózsa György út 144–148. (1) 200-3815 info.hungary@ codic.eu

Henger utca 2. (1) 266-9441 info@adventum.hu

2040 Budaörs, Edison utca 4. (1) 700-8013 office@ bluehousecapital. com

85 INFOPARK

86 VÁCI GREENS A ÉPÜLET

87 BAKERSTREET I. www.atenor.eu/en/projects/ bakery-3/

(100)

(100)

(100)

FPE(HU) Kft. (100)

Posta Takarék Ingatlan Befektetési Alap (100)

VG 117 Ingatlankezelő Kft. (100)

Szerémi Greens Kft. (100)

1114 Budapest, Bartók Béla út 43–47. (1) 501-2800 office@caimmo.hu

fasor 7. (1) 501-2800 office@caimmo.hu

1117 Budapest, Alíz utca 4. (1) 382-7020 grtgroup@ grtgroup.hu

1139 Budapest, Teve utca 1 A-C (70) 478-0556 offices@cpipg.com

1082 Budapest, Futó utca 47–53. (1) 236-6408 horvath.gergely@ otpingatlanalap.hu

1095 Budapest, Lechner Ödön fasor 6. (1) 501-2800 office@caimmo.com

1138 Budapest, Váci út 193. (1) 412-3680 leasing@ gtcgroup.com

1117 Budapest, Alíz utca 1. (1) 382-7020 grtgroup@ grtgroup.hu

1138 Budapest, Váci út 140. (1) 268-1288 info.budapest@eur. cushwake.com

1117 Budapest, Neumann János utca 1/E (1) 888-4120 ingatlan@ granitalapkezelo.hu

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1062 Budapest, Váci út 1-3. (1) 877-1000 alexandra.virag@ eston.hu

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1117 Budapest, Neumann János utca 1. (1) 888-4120 ingatlan@ granitalapkezelo.hu

1052 Budapest, Türr István utca 6. (1) 332-2200 info@bif.hu

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CEE Office Markets Face Common Challenges

Office pipelines across Central and Eastern Europe are restrained, and few new projects have been initiated in what is an uncertain economic, geopolitical, and financial environment. There are further concerns over letting and office working practices and even the longer-term demand for space.

GARY J. MORRELL

From a more positive perspective, regional developers are delivering more highly specified and ESG-compliant office projects in response to market pressures and environmental concerns.

CEE office markets are in relatively good positions compared to the U.S. market, which is seen as being in crisis (and in a very different business practice environment) due to the reluctance of staff to leave home office after COVID.

Central Europe could be seen as having a more favorable long-term future, with office tenants adopting a hybrid model, and notably with shorter commute times in Budapest and Prague, for example, which are very compact cities.

“For the most part, 2024 is likely to bring a sharp slowdown in deliveries of new offices. In some instances, as in the capitals of Slovakia and Romania, almost no significant office projects are due to be delivered in 2024,” comments Colliers CEE.

“For now, it is still very much a market driven largely by tenants as vacancy rates remain in double-digit territory in CEE capitals (with the exception of Prague). The saving grace here is that the slowdown in deliveries will help absorb the vacant spaces, particularly those in modern/ESG-compliant offices, and maybe gradually tilt the equilibrium towards a neutral market by the end of 2024,”

the consultancy adds.

Prague is arguably the prime CEE market from the investors’ perspective and has a particularly weak office pipeline with a relatively low vacancy rate of 7.2%. This is expected to remain in single digits for the next two years due to the lack of new projects, according to Cushman & Wakefield.

Total modern office stock in Prague stands at 4 million sqm, 74% of which

is class “A,” according to the Prague Research Forum, consisting of CBRE, Colliers, Cushman & Wakefield, iQ, Knight Frank and Savills.

Significant Deliveries

Possibly the most significant recent office deliveries are the 23,000 sqm Port7 Edinburgh building in Prague on the banks of the Vltava River by the prolific CEE developer Skanska and the Czech-owned Passerinvest Group’s Roztyly Plaza development, which has 23,300 sqm of office and retail space and opened in March.

The market could see a possible supply gap, according to analysts. Cushman & Wakefield have traced a low 80,000 sqm of space under construction, a large proportion of which is already pre-leased.

“Over the past 12 months, the Prague office market has shown signs of stagnating with no new projects initiated. Vacancy rates have been slowly decreasing due to limited new supply compared to the absorption of office space, pointing to a potential shortage of high-quality offices for lease,” comments Radana Willamsova, associate director of office agency at Colliers in the Czech Republic.

Development in the booming Bucharest market, an emerging CEE business center, has been subdued,

developer active in the Czech Republic, Hungary, Poland, Romania and Slovakia. A growing number of firms have begun to demand that workers show up in-office. As a result, the hybrid model that took hold after the pandemic is mostly settling into a 3:2 ratio in favor of the corporate office.

In order not to lose employees who increasingly prefer home office-enabled work, employers now need to address both the attractiveness of their offices and their relationships with their people, according to research conducted by Colliers from 300 companies in the EMEA region.

Office remains a favored investment target. In Vienna, Euro Real Estate has acquired the 26,600 sqm City Tower Vienna from Immofinanz for

EUR

150 million

in a deal managed by United Benefits Holding. The 87-meter high complex is one of the most prominent office properties in Vienna. It comprises a high-rise tower with a rotated head structure and two partially elevated side buildings. The tower has 24 upper and four underground floors with 100 underground parking spaces. It is leased in its entirety to the Republic of Austria.

with vacancies standing at more than 15%. However, this is expected to fall to around 12%

during the year with a limited number of editions to the 3.4 million sqm of Bucharest office market. Notable projects under construction are the 27,500 Promenada Offices by NEPI-Rockcastle and the 15,000 sqm AFI Loft by AFI Europe. Warsaw has the largest office market in the region, with a stock of 6.2 million sqm and an overall vacancy rate of 10.4%, according to Colliers. Vacancy has been falling in the Polish capital due to limited delivery. A notable feature of Poland’s office market is that its total stock of 12.9 million sqm of modern space is spread across several cities. Two notable deliveries have been the 26,000 sqm Nowy Rynek E in Poznan by Skanska and the 26,700 sqm Craft by Ghelamco in Katowice.

Hybrid Prevalence

“In Budapest and all of the capitals in CEE where we operate, the hybrid working model is prevalent. While there is a trend among companies to encourage increased office attendance, the flexibility and balance offered by the hybrid approach are likely to persist as a popular choice for many organizations,” says Skanska, a long-established Swedish

“For now, it is still very much a market driven largely by tenants as vacancy rates remain in double-digit territory in CEE capitals (with the exception of Prague). The saving grace here is that the slowdown in deliveries will help absorb the vacant spaces, particularly those in modern/ESG-compliant offices, and maybe gradually tilt the equilibrium towards a neutral market by the end of 2024.”

“Tenants, landlords and investors in all CEE countries are increasingly focusing on the quality of buildings. The gap between older/outdated and modern/efficient buildings is becoming increasingly wider in terms of a multitude of factors, from rents to attractiveness for tenants and occupancy rates to capital values,” says Colliers. “In turn, we view this as a decisive factor in pushing for more and more retrofitting of older buildings, which may become viable. Timing-wise, these changes are coming at a bad time, as the green push is coming in a difficult context for the market, given how high interest rates are. Furthermore, we need to acknowledge how relevant the green characteristics are on the financing side, as banks need to take into account not just the value of the building itself, but how efficient and future-proof it is,” the agency adds.

The City Tower Vienna: Euro Real Estate acquired the 26,600 sqm building from Immofinanz for EUR 150 million.

DVM Group Strengthens With 2 Directors

Integrated architectural and construction services provider DVM group is restructuring its design department to respond to its national and international clients’ increased architectural and professional needs. The company’s managing partners have appointed Ákos Csécsei to head the architectural design department and Tímea Fekete-Tóth to lead the interior design department. The separation of the operating model not only brings a positive change in efficiency but also provides the opportunity to offer more competitive proposals to property developers, investors and multinational companies, DVM says.

Interior design director Tímea Fekete-Tóth graduated as an architect from the Moholy-Nagy University of Art and Design Budapest (MOME), where she received a diploma award in interior design, which also launched her career. Starting her career in industrial building design, she experienced the intense workflow of large projects

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while always striving to create humancentered spaces, even in an industrial environment, DVM group notes. She holds a master’s degree in color dynamics engineering from Budapest University of Technology and Economics (MBE). She has been actively involved in ground-floor and interior design assignments since joining the DVM group in 2017, working on projects such as the 20,000 sqm BP Budapest office, the WineHUB shop and restaurant, the renewed guest areas of the Dr. Rose Private Hospital and the Steam Budapest restaurant at the Szervita Square building.

Architectural design director Ákos Csécsei started his career in 2018 as a senior designer. He graduated from the Faculty of Architecture of MBE in 2005. During his studies, he spent two semesters as a member of the international team of renowned Spanish architectural firms RCR Arquitectes and Gras Architects, thanks to the Leonardo scholarship program. He later spent a year in London, where he further deepened his knowledge of contemporary, modern, and international architecture. He acquired his architectural design and

project management skills in well-known Hungarian architectural firms. During that time, he was involved in designing and supporting cultural and community centers, sports facilities, office buildings, hotels and residential buildings.

During his more than five years with the DVM group, he has been the primary manager of large-scale projects such as the complete renewal of Camp Erzsébet in Zánka and the construction planning of the Intercity Hotel Budapest. His current projects include the comprehensive planning of the Monori Center and the company’s first selfdeveloped, designed and built project, the Andor Liget residential complex.

He is a founding member and president of the ÉK Association, a non-profit civil architectural organization launched in 2006. Through its activities and services, it aims to raise the standard of Hungarian architectural culture and develop individual and collective creativity. The association has won several Erasmus+ Challenge Prizes for its international projects. He is an active member of the Hungarian Chamber of Architects and the Association of Hungarian Architects, as well as a lecturer in urbanism at his former university.

Ida Kiss, who has led the DVM group’s design department for seven years, will remain with the company. The company said she will focus on international clients, using her outstanding knowledge of architecture, interior design, and sustainability.

Gellért Berkes Named ConvergenCE Property Management Head

ConvergenCE has had a new head of property management since Jan. 1, 2024: Gellért Berkes

The professional has been a member of the company’s real estate development team for two and a half years, bringing with him nearly 15 years of professional real estate experience.

“For me, this environment and company has always presented motivating challenges. Besides the numerous tasks involved, including office handovers and building renovations, it means a lot to me to work alongside such dedicated and professional colleagues. I appreciate this promotion and trust that I will continue to perform in a way that fully satisfies both our investors and tenants,” Berkes said.

“I am proud to see that Gellért, thanks to his work ethic and dedication, has now earned an even more important and responsible position,” noted Csaba Zeley, managing director of ConvergenCE.

“In Gellért, we have an excellent colleague with high professional expertise who, through continuous development, has proven capable of taking on greater responsibilities, and I extend my best wishes for success in his new role.”

Tímea Fekete-Tóth

Ákos Csécsei

Gellért Berkes

Facility Management Companies

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Sándor Gombár, Zoltán Hock Péter Magasdi Tibor Barák

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Gábor Nagy, Zsolt Kákosy, Róbert Flück, Gergely Varga Gergely Varga Viktória Kiss 1026 Budapest, Riadó utca 5. (70) 662-5639 info@iconrem.hu

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Jakab

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4 Socialite Grappling With the Mysteries of the Hungarian Language

I’m constantly reminded how little I know of or about the magnificent language that is Hungarian. But, while I doubt I’ll ever accumulate more than a few words, I can at least try to understand how it works.

DAVID HOLZER

I began by contacting the Language Consulting Service of the HUNREN Hungarian Research Center for Linguistics. My questions were answered by research fellow Judit Kozma and junior research fellow Dorottya Jakab, who I couldn’t help but imagine working in an enormous, wood-paneled office that hadn’t changed in centuries.

The Language Consulting Service offers guidance about language, language usage and spelling. Among other things, it helps determine the meaning, usage and stylistic value of words and phrases and resolve more complex spelling problems.

To give you some idea of how thorny Hungarian spelling problems can be, Kozma and Jakab kindly shared this example with me.

“In the Hungarian language, there is a complex grammatical and spelling system of when the elements of multiword phrases are written together and when they are written separately, and therefore, their spelling rules form a specific system. Knowing the set of spelling rules in connection with this could be especially important for a translator, particularly because in Hungarian, there are terms and phrases that can be written separately and together, but the two spellings have different meanings. For example, the words gyors (‘fast’) and vonat (‘train’) can be written two ways, but the form gyors vonat means ‘a train that travels fast,’ while the form gyorsvonat means ‘a type of train that stops at only a few stations on the railway line.’” So now we know.

Spelling and Children’s Names

Given that the Hungarian language seems so byzantine to me compared to the endless adaptability of English, it doesn’t surprise me that there is an official “Rules of Hungarian Orthography.” The first normative spelling rule book was published in 1832. In 2015, the edition currently in force was published and is taken very seriously indeed.

As the Research Center for Linguistics rather sternly points out in a White Paper, “Hungarian orthography is under strict academic control: the rules of the Spelling Committee of the Hungarian Academy of Sciences are intended to be used. The regulations are not obligatory, but misspellings can certainly cause loss of prestige.”

Kozma and Jakab told me, “Even though Hungarian orthography is not a legal regulation, the rules of the spelling code are still used as a reference, even in the courts. A significant part of the

that a name must not be derogatory or overly diminutive, can be written and pronounced easily and can be recognized as either male or female.”

Reflecting Hungary’s increasing diversity, many recent additions to the official list are foreign names, but these must be spelled the Hungarian way. For example, Philip becomes “Filip.”

Parents who are members of one of the 13 officially recognized minorities in Hungary, such as Armenian, Roma or Ukrainian, can choose names for their children from their own culture, but their respective minority governance must approve these. This explains why you’ll never meet a Hungarian “Elvis” or “Willow.”

Fluid and Dynamic

Although it’s far more officially regulated than U.S. English, for example, I’m wrong to assume that Hungarian is a static language.

“Hungarian, like any other language, can be seen as constantly and dynamically changing,” Kozma and Jakab explain. “The most rapidly changing part is the vocabulary: new words are constantly being created, new meanings may be attached to existing words and phrases, and, of course, loanwords from other languages (nowadays mainly from English) are adding to the vocabulary as well.”

Foreign words that have entered Hungarian from other languages fall into different categories. Some, such as “déjà vu,” “couchette,” and “flow” follow the original spelling. Others are spelled according to Hungarian pronunciation, so “email” becomes ímél, “selfie” is szelfi, and “chat” cset Regarding foreign words Hungarians use without adapting them, Kozma and Jakab give the fascinating example of “pen drive.” Although the word is often used in Hungarian, no substitute has been created. The foreign spelling has been kept because it’s proved impossible to find a Hungarian equivalent that’s sufficiently short but still able to express the meaning.

Hungarian speech community considers academic spelling to be a regulation of essentially unquestionable authority.”

Official regulation extends beyond the spelling of words and into the naming of newborn children. Parents can only choose names from officially approved lists separated for male and female children. As at the beginning of March this year, proud Hungarian parents could choose from 1,982 masculine and 2,636 feminine names. In head-spinning contrast, the website BabyNamesPedia lists 20,792 English names for boys and 63,422 for girls.

According to Kozma and Jakab, if a Hungarian parent wants to give their child a name that doesn’t appear on the official list, they must “submit an official request to the Ministry of Public Administration and Regional Development. The applications will be forwarded to the HUNREN Hungarian Research Center for Linguistics to be considered by the Names Working Group, following a set of principles. These principles include

Five not Particularly Useful but Deeply Wonderful Hungarian Phrases

Although I can’t imagine ever becoming fluent in Hungarian, I do admire the richness of the language. These are the English translations of my five current favorite Hungarian metaphor phrases and their more idiomatic meanings.

• The ice cream cone licks back: payback’s a bitch.

• They’re leaving the cabbage for the goat: putting the wrong person in charge.

• I can’t play chess with a horse: we don’t understand each other.

• I don’t believe what he eats/ drinks: he’s such a liar, I can’t trust anything he says.

• He/she can survive on ice: that person can survive anything.

One of the wonders of Hungarian is its 44-character alphabet.

1990s Hungary Inspires Debut Novel ‘Ilona Gets a Phone’

Irish-American Alison Langley’s debut novel tells how Hungarians struggled with the social and economic upheavals triggered by the collapse of communism and the transition to a more market-based economy in the early 1990s.

It’s 1991 and Ilona, long thwarted by the former regime from owning a phone, is about to live her dream. Modern telephonic communication is the first step, at least that’s what she convinces herself, to restoring her former aristocratic home and life.

Alison Langley and her husband, Mike Shields, moved to Budapest in 1990. While he headed the Budapest bureau of the Reuters news agency, she freelanced for the Wall Street Journal Europe and International Herald Tribune and assisted the World Health Organization in updating the training for child healthcare nurses.

Langley returns to Hungary later this month to launch her first book, “Budapest Noir: Ilona Gets a Phone,” a novel set in 1991 in the Hungarian capital.

BBJ: What struck you most about Budapest and Hungary in your early days here?

Alison Langley: Everything was so different but also the same. The best was our neighbors in Buda. None of us spoke a common language; Mike and I spoke English and German, and our neighbors had Hungarian and bad Russian. Still, we all managed to communicate. Without Gyöngyi helping me in those early days, I don’t know how I would have managed.

Gyöngyi’s son, Bálint was 14. To him, we were very exotic. He and his friend Gergő hung around our house a lot. They were a riot. They thought our old Opel Corsa was the greatest thing they’d ever seen. They were totally into heavy metal, which, somehow, they thought we, too, liked.

Eventually, we became very close to Gergő’s family. His mother, Anna Gedeon, was our doctor. His sister, Zsófi, was our babysitter and helped me with the book. His dad, Péter Antoni, always filled us in on his view of politics. We have stayed in touch with them all these years since. We recently re-connected with Bálint too.

Culture Matters

A regular look at culture issues in Hungary and the region

Hungarians are some of the nicest and most hospitable people I’ve met.

For me, Budapest 1990 was a lot like rural Minnesota in the 1970s. We arrived in August and were so surprised (pleasantly) to visit the vibrant market at Moszkva tér. I had expected poverty and scarcity, but the fruit and vegetables were varied and absolutely gorgeous.

Trade with Comecon countries had collapsed, and food from Western nations was expensive. It was a hard winter, as I remember. I started a mother’s group, so my daughter and I could meet friends. I had expected that we would alternate venues, one week my house, next time someone’s flat.

Instead, I realized quickly the expectation was that it would always be at my place. It took a while before I understood why: some families weren’t heating their homes properly. They couldn’t afford the price hikes. Living in Hungary during that very tumultuous time was the first time I had been confronted with privilege. It was very humbling.

BBJ: Did you feel much had changed from when you arrived to when you left?

AL: Immensely. It felt like the entire nation had learned to speak English in four years. Their eyes were fixed westward. I get the impression that their eyes are fixed eastward now. As a parent, I was warned away from old Soviet vaccinations, so I drove to Vienna to get Western ones for Sarah, our daughter. By the time I left, the quality of the jabs had improved. I was saddened to hear that Orbán used lesser-quality COVID vaccinations. It felt like a step backward.

Goods, too, changed. My son was fixated on classifying cars when he was two. He could point out the Ladas, Wartburgs and Dacias. But then came the VWs, BMWs [...] and he got confused. [Alison laughs.]

We loved [Hungarian folk music group] Kalyi Jag and the táncház [dance house] scene. It felt like the nation was beginning to feel more confident, finding its Hungarian identity in a positive and not nationalistic way.

BBJ: From what I’ve read of your book so far, Ilona is, well, she’s nuts, what with her attachment to a phone and her dream of recovering her family’s kastély , living the aristocratic life again. How much did you base her on someone you got to know?

AL: My main character is loosely based on a woman I met here. She was so passive-aggressive we could only laugh at her antics. She nagged, nudged, needled, cajoled and occasionally pestered people. Relentlessly. So much so that we ultimately couldn’t take her seriously, although she was important in our lives.

I was struck by her, especially when I realized she was the Hungarian version of all those older women I had been meeting across Europe in my travels, those with sharp elbows at the bakery who didn’t know how to queue.

I had been raised to wait my turn. Why were they so impolite? I never got any further with the story because I really didn’t know who Ilona was. Until I figured that out, I couldn’t go on.

COVID struck. I had time to go back to that opening chapter. More time to think about Ilona standing at her bedroom window, waiting for that telephone van. I was now the same age Ilona would have been back in the ’90s, and I had a better perspective on the old girl.

People, especially women, I believe, learn to be passive-aggressive when they are powerless. It’s a way to be angry without being confrontational. It’s a way to challenge someone without seeming to do so. Often, I learned in my research, it is a coping tactic honed in response to childhood trauma.

I also met Smallholder Party members and others who really did want to bring back the Habsburg monarchy. Sissi [Elisabeth, the former Austrian Empress and Queen of Hungary] played an outsized role in their imaginations. At the time, dumb American and all that, I had never heard of Sissi. It took my breath away when I learned she died in 1898.

BBJ: Next book? Will it also be about Hungary?

AL: My next book [first idea] was a knee-jerk reaction to those agents and publishers who focus entirely on marketable fiction. However, I still have a mind to go back to my experience helping with the Baby Friendly Hospital Initiative. I don’t have a hook yet. Who knows, maybe in another 20 years?

BBJ: How can one order the book? AL: Try Massolit Books & Café. Please, please support local bookshops! They are so very important to the life of a city. Without Massolit, I wouldn’t be having a reading in Budapest. Judit has been hugely supportive of me, and I want to return the favor.

Alison Langley will present her book at 7 p.m. on May 23 at Massolit, 1072 Budapest, Nagy Diófa utca 30. Budapest Noir: Ilona Gets a Phone, ISBN / Ean1915568420 / 9781915568427, 320 pp

KESTER EDDY

First-time author Alison Langley.

Chamber of Commerce Corner

Swiss-Hungarian Chamber of Commerce (Swisscham)

Swisscham Hungary will hold its annual meeting on May 22 at the headquarters of one of its long-term members, Raiffeisen Bank. A networking lunch will follow the AGM.

Agenda items: 1. Approval of the report on the chamber’s work in 2023;

2. Approval of the budget and annual report for 2023; 3. Approval of the 2024 budget; 4. Election of new board members; 5. Election of a new Supervisory Board member. The event is open to members only; participation is free but subject to registration.

Hungarian-French Chamber of Commerce and Industry (CCIFH)

The CCIFH invites guests to celebrate “La vie en Rose” in a very French way at its garden party on Buda Hill, surrounded by nature, lanterns and chansons. • When: Friday, June 14, 5- 10 p.m.

• Where: Normafa Síház, Eötvös út 59, Budapest 1121. • Fee: Members HUF 36,000 (+ VAT); non-members HUF 54,000 (+ VAT).

The CCIFH’s next hybrid Business Breakfast will take “ESG Requirements in the Hungarian Market” as its subject. The speakers will be: Dániel Erdélyi, head of department at the Supervisory Authority for Regulated Activities; András Bagyura, head of sustainability services at Mazars; Andrea Belényi, partner at VJT & Partners law firm; and András Balásfalvi-Kiss, head of Kingfisher Digital Zrt. • When: Thursday, May 23, 9 a.m.-1. p.m. • Where: Well Point Event Venue, Europa Design Plc., Törökvész út 71-75, Budapest 1025. • Fee: Members HUF 19,900 (+ VAT); non-members HUF 29.900 (+ VAT).

To take action and build solutions, first we need to understand the problem. The CCIFH “Klimate Fresc” workshop is available to anyone within member organizations. The workshop animators are from AIR France-KLM, Decathlon and Michelin, professional partners of the event. • When: Tuesday, June 4, 9 a.m.-1 p.m. • Where: Milestone Intézet W17, Wesselényi u. 17, Budapest, 1077 • Fee: Members HUF 14,900 (+ VAT); non-members HUF 19,400 (+ VAT).

German Hungarian Chamber of Industry and Commerce (DUIHK)

During the four days of the Ipar Napjai/Mach-Tech/Automotive Hungary fair, our colleagues held more than 90 consultations with company representatives on various topics. Once again, the most frequently requested consulting topic this year was establishing new business relationships between buyers and suppliers. However, a considerable number of parties were also interested in legal issues and training and further education

Canadian Chamber of Commerce In Hungary (CCCH)

An authentic Canadian BBQ experience awaits. Join the CCCH for its upcoming traditional BBQ evening on May 29. This event promises a delightful fusion of Canadian flavors and Hungarian hospitality, offering a taste of Canada’s rich culinary heritage amidst a picturesque outdoor setting. Enjoy the fresh Canadian wild salmon and bison with live jazz music in the background, and purchase your raffle tickets at the venue. Notable business people from various sectors across Hungary will attend.

• When: Wednesday, May 29, 6-11 p.m. • Where: Öbölház, Kopaszi-gát 2, Budapest 1117.

Italian Chamber of Commerce for Hungary (CCIU)

The CCIU is collaborating with Promos Italia on the InBuyer project. This aims to support the internationalization process of Italian companies by organizing online business-matching events with qualified Hungarian operators. The objective is to protect the quality, innovation and excellence of the “Made in Italy” brand and support SME Italian companies in forging links between Italy and Hungary. Through

Belgian

business matching sessions, the CCIU will organize meetings with potential buyers selected from target markets to enter key Hungarian markets. The event calendar covers a wide range of sectors between now and November in the following sectors: • May 21- 23: Food • June 12-13: Furniture 1 • June 26-27: Packaging • July 9-11: Frozen food • Sep. 25-26: Cosmetics • Oct. 8-10: Organic food

• Oct. 23-24: Furniture 2 • Nov. 5-7: Wine

Business Club in Hungary (Belgabiz)

Belgabiz, together with the NetherlandsHungarian Chamber of Commerce (Dutcham) and the Swedish Chamber of Commerce in Hungary, will hold a business breakfast titled “Whistleblowing Law: A Burden or a Chance to Develop Trust?” Delaware Hungary and Visegrad+ Legal have teamed up to work out an innovative

programs. Many also took part in the chamber’s trade fair consultation day. With almost 50 companies in attendance, the DUIHK stand once again provided an informal atmosphere for networking. The chamber will attend the trade fair again next year, as it offers a unique opportunity to build business relationships, something neither the chamber nor its members should miss in 2025.

• Save the Date: May 13-16, 2025.

and easy-to-use solution to meet the demands of this directive and ensure seamless compliance.

• When: Wednesday, May 22, 8:30-11:30 a.m. • Where: Mizaru Mambou Caffe, Eötvös u. 10, Budapest, 1067.

• Fee: Free for members of Belgabiz, Dutcham and the Swedish chamber; non-members HUF 10,000.

HEALING FOR THE BODY AND THE SOUL

We are a private hospital offering a range of services from obstetrics, to pediatrics, over 40 medical specialities, state-of-the-art operating rooms, exclusive surroundings and patient accommodation to meet all your needs. We provide annual packages, medical screenings and corporate health services, as well as attentive care and a kind smile. The one thing you won't find at Dr. Rose is a waiting list. All this is available locally, in Budapest, Hungary.