Budapest Business Journal 3216

Green Accreditation Becoming the Norm

Third-party sustainability accreditation systems reflect the need for independent and transparent ESG-related data and information for the benefit of all real estate stakeholders.   10

Market Talk: How ESG is Shaping Buildings

ESG compliance is a necessity for a successful real estate project with increasingly stringent and all-embracing international regulations and market requirements. Sustainability accreditations act as independent means of providing international comparisons for the attributes of a building.   16

Celebrating 110 Years of Hungarian Animation

Between Sep. 17 and 22, the seventh annual Budapest Classics Film Marathon will celebrate 110 years of Hungarian animation David Holzer talks with festival director György Ráduly.  29

Reimagining how we use Real Estate

The pre-pandemic boom years for commercial real estate are a distant memory. Mátyás Gereben, country manager of CPI Hungary, who describes himself as an optimistic man by nature, says the current challenging market is compelling serious players to think again about how they run their businesses.  7

Industry, Consumption Hinder Q2 GDP Growth

The Hungarian economy shrank by 0.2% in the second quarter compared to the first. This is the same as the preliminary data announced at the end of July, and now we can see where the Hungarian economy performed poorly. The future outlooks are better, though.   3

System Launched

Arenim Technologies, a Budapest-based IT company specializing in telecommunications security, has quietly launched what it believes is the world’s first comprehensive “quantum-resilient” system.  6

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

CHANGING WEATHER, TURNING PAGES, AND REALPOLITIK

The summer holidays are over, the kids are back at school, and the roads are horribly congested. It’s still hot (so much so that my daughter’s new school is running shortened days this week), but the evenings are finally a little cooler. There’s a feeling that a page has been turned. Not to depress you, but from here, it is a fourmonth slog to budget planning meetings and Christmas, broken only by the national holiday on Wednesday, Oct. 23, marking the 1956 Uprising, and half term for the kids from Oct. 28-Nov. 1 inclusive.

If a page has turned (or, more accurately, is turning) on the weather, it hasn’t politically. Hungary’s second stint in the revolving seat that is the Presidency of the Council of the European Union started on July 1, and runs until the end of December. By and large, the first time Hungary occupied the position (January 1-June 30, 2011), its term of office was relatively well received. That first stint came less than a year after Viktor Orbán and his Fidesz-Christian Democrat government were returned to power.

In the 13 years separating those presidencies, Orbán has proved himself very happy to take on the Brussels establishment. In pursuing what he calls his “peace mission” and maintaining what appear to be warm relations with Russia’s Vladimir Putin, the Hungarian PM has exasperated many of his EU colleagues. (Hungary’s defense is that, if peace is to have any chance, you have to keep communication channels open. Those who deal in realpolitik would point out where landlocked Hungary gets most of its oil and gas and who is financing the expansion of the Paks Nuclear Power Plant.)

The Hungarian presidency is built around seven priorities: acceptance of a New European Competitiveness Deal; the reinforcement of the European defense policy; a consistent and meritbased enlargement policy; stemming illegal migration; shaping the future of the cohesion policy; a farmeroriented EU agricultural policy; and addressing demographic challenges.

Pushing those through will need the support of European allies, and yet some other member states have chosen not to attend informal meetings in the Hungarian capital. There have been suggestions that other events should be moved. The Hungarians have dismissed such moves as “childish,” which hardly seems the sort of word designed to woe people to your point of view. Has Budapest misjudged the mood in Brussels? A respected Hungarian business contact spoke to me the other day about a long-scheduled visit to the country by a senior member of the international management. “Please don’t mention the presidency,” I was asked. “It’s all too political. I don’t see what Hungary is getting out of this.” What Hungary wants from its presidency, especially deals on competitiveness and defense, the speeding up of the enlargement process (with a particular eye on the Western Balkans), and getting Romania into the Schengen Zone, are hard to argue against and offer plenty of business opportunities to the whole of Europe. The more meaningful question is whether the Hungarian approach is likely to bring the desired results.

Robin Marshall Editor-in-chief

THEN & NOW

The black-and-white photo from the Fortepan public archive, dated 1958, shows the offerings of a butcher shop located at Kossuth Lajos utca 99/a in Budapest’s District XX. The present-day color photograph from state news agency MTI depicts a saleslady arranging the cold cuts counter of a Coop store.

Photo by FSZEK Budapest Collection / György Sándor / Fortepan

Photo by János Vajda / MTI

1News • macroscope

Industry and Consumption: Two Hindering Factors Behind Latest Central Statistical Office GDP Data

The performance of the Hungarian economy shrank by 0.2% in the second quarter compared to the first. This is the same as the preliminary data announced at the end of July, and now we can see where the Hungarian economy performed poorly. The future outlooks are better, though.

Change in GDP in Hungary (2010-H1 2024)

Annual rate of economic growth; quarterly change in GDP; seasonally and calendar adjusted and balanced data

GDP quarterly changes 2010-Q1 2024 seasonally- and calendar-adjusted and balanced data

2.4%, within which manufacturing was down by 3.7% compared to the same period of the previous year.

Hungary’s gross domestic product volume was 1.5% higher according to raw data and 1.3% higher according to seasonally and calendar-adjusted and reconciled data in the second quarter of 2024 than in the corresponding period of the previous year. Compared to Q1 of this year, the economic performance lessened by 0.2% according to seasonally and calendar-adjusted and reconciled data.

In the first half of 2024, the performance of the economy was 1.3% higher according to raw data and 1.5% higher according to seasonally and calendar-adjusted and reconciled data than in the same period of the previous year, the second reading of Hungary’s Q2 GDP data shows.

The fresh report, which the Central Statistical Office (KSH) released on September 3,

reveals that in the second quarter, the industrial performance fell by

Among manufacturing branches, the most significant contributors to the decrease were the manufacture of electrical equipment and the manufacture of motor vehicles, trailers and semi-trailers. In contrast, the manufacture of food products, beverages and tobacco products slowed the fall in industry most.

The value added of construction was 6.2% higher, while that of agriculture was, as a consequence of this year’s drought, 5.2% lower than in the corresponding period of the previous year.

The gross value added of services increased by 2.4% in total. The highest increase (7.2%) occurred in accommodation and food service activities. The value added of arts, recreation and other service activities was up by 6.9%, human health and social work activities by 4.7%, and information and communication by 3.3%.

Positive Contributors

The report also shows that positive contributors to the 1.5% increase in GDP in the second quarter of 2024 were

Source:

services (up 1.4 percentage points), the balance of taxes and subsidies on products (up 0.4 of a percentage point) and construction (up 0.3 of a percentage point). Agriculture lowered the performance of the economy by 0.2 of a percentage point and industry by 0.5 pp. Within services, real estate activities contributed the most (up by 0.3 of a percentage point) to the growth of GDP.

The actual final consumption of households was up by 4% compared to the same period of the previous year. Household final consumption expenditure (representing the largest proportion of the components of the actual final consumption of households) increased by 4.2%. The domestic consumption expenditure of households was 4.1% higher.

The volume of domestic consumption expenditure rose in all durability groups: by 9.1%

in the case of durable goods, by 2% for semi-durable goods, by 4.3% in the case of non-durable goods and by 3.6% for services.

The volume of social transfers in kind from the government went up

by 3.4%, while the actual final consumption of the government diminished by 3.9%. The volume of social transfers in kind from non-profit institutions serving households grew by 2.5%.

As a result of the above trends, actual final consumption increased by 2.7%.

Gross fixed capital formation fell by 15.4% in Q2 compared to the corresponding period of the previous year. Both the volume of investments in construction and that of investments in machinery and equipment went down, the volume of the latter measurably. Of the industries with the highest share of investments, the volume of developments dropped at a higher rate than the average in manufacturing and in transportation and storage, and grew for real estate activities.

Balance of Trade

Actual final consumption contributed 1.9 percentage points to the 1.5% increase in GDP, while gross capital formation slowed it by 1.4 percentage points. The balance of external trade as a whole raised the economic performance by 1 percentage point. Regarding production, the performance of construction went up by 2.5% while services remained unchanged. The performance of industry decreased by 1.5% and agriculture by 5%. On the expenditure side, the volume of household final consumption expenditure was 1.1% higher, social transfers in kind from the government 1% higher, and the volume of the actual final consumption of the government 0.5% lower.

Gross fixed capital formation fell by 6.7%. In external trade, the volumes of exports and imports as a whole increased by 0.7% and 0.5%, respectively.

ING Bank’s senior analyst Péter Virovácz highlighted from the latest data that consumer confidence has continued to deteriorate although real wages are increasing. Based on the previous partial data, the expert was unsurprised that the companies had significantly slowed their investments. He does not even expect a turnaround in the latter. Despite the latest data, which clearly shows that this year is not a huge success story for the Hungarian economy, the rate of economic growth next year could be 3.6%, which would be one of the highest in the region, according to the ING Bank’s updated expectations released on Sep. 4.

ZSÓFIA CZIFRA

Hungary Changes Rules on Supporting Ukrainian Refugees

As many as 3,000 Ukrainian refugees sheltering in Hungary may be forced onto the streets due to an amendment to legislation that had provided them with state support, which came into force on Aug. 21.

According to the changes, the government would only continue to provide state support, such as free housing and a monthly stipend, to Ukrainian refugees whose last official address in Ukraine was in an area “directly affected by military operations.” So far, 13 regions in Ukraine have been included on the list of affected areas, which the regulation said would be updated on the 10th day of each month.

Of the 31,000 Ukrainians taking refuge in Hungary, the UN’s refugee agency estimated that 2,000-3,000 would be affected by the legislation, over half of whom are children.

“Many face significant barriers in securing alternative housing due to lack of financial means but also reluctance of owners to rent,” the UNHCR told BBC News. “For many, the change will result in job losses and impact school enrollment, jeopardizing the positive integration achievements obtained so far.”

Refugees from the Roma ethnic minority in Transcarpathia, the westernmost region in Ukraine that shares a border with Hungary, have been disproportionately affected. Their situation is further complicated by the fact that many are dualcitizens of Hungary and Ukraine, which precludes them from applying for asylum anywhere else in the European Union.

Although many lack the means or are unwilling to return to Ukraine while hostilities persist, government commissioner Norbert Pál told conservative daily Magyar Nemzet that “those who wanted to get back on their feet in Hungary have been able to do so.” After two-and-ahalf years of war, he justified the changes as “reasonable and proportionate.”

In the days following the amendment coming into force, Radio Free Europe reported witnessing the eviction of at least 120 refugees in Kocs (70 km west of Budapest). According to the report, many of the evicted had set up camp near a local bus

Photo by János Vajda/MTI

Parliamentary State Secretary Csaba Latorcai of the Ministry of Public Administration and Regional Development, speaks to Ukrainian children camping in Hungary at the Rákóczi Hotel, Camp and Event Center in Sátoraljaújhely (259 km northeast of Budapest, close to the border with Slovakia) on Sep. 3. The 110 children came to the Rákóczi camp from the interior of Ukraine, straight from the front line.

station, with police monitoring the area to keep children from wandering into traffic.

EU Behind Lukoil Decision?

Meanwhile, Minister of Foreign Affairs and Trade Péter Szijjártó asserted that the European Commission had been the true instigator behind Ukraine’s decision to block Lukoil’s deliveries of Russian crude from passing through its territory to Hungary and Slovakia.

“I think the fact that the EC has declared that it is unwilling to help with regard to Hungary and Slovakia’s secure

energy supply supports the assumption that Brussels instructed Kyiv to create a problem for the energy supply of Hungary and Slovakia,” Szijjártó said on Aug. 24.

Days earlier, Szijjártó said that, despite the EC’s lack of support, talks on ensuring Hungary's long-term supply of crude had been “on the home straight.” This appeared to be confirmed by Gergely Gulyás, the head of the Prime Minister’s Office, at a press conference on Aug. 22. According to Gulyás, Hungarian oil and gas company MOL had a “good chance” of reaching an agreement which would involve it taking over the transit of the crude from the border between Russia and Ukraine. The measure was expected to add about “a dollar and a half” per barrel to the price of the crude, as the Ukrainian transit fee, and the risk involved with the delivery, would be borne by MOL. Gulyás said the government didn’t want that extra cost to be passed on to consumers, adding that it would potentially compensate for the increased costs by reducing special taxes, such as those the company pays on the spread between Brent and Urals prices. These agreements, Gulyás said, could be signed as early as “at the beginning of autumn.”

NICHOLAS PONGRATZ

Denxpert Secures EUR 1 mln in Seed Funding

Denxpert, a Hungarian startup specializing in environmental, health, safety, and sustainability (EHS&S) software, received a significant investment of EUR 1 million seed funding this summer.

STARTUP SPOTLIGHT

software globally. The investment from ÓUVC and SAV is a significant step toward realizing this vision, allowing the company to enhance its product offerings, expand its customer base, and enter new markets.

This financing round was led by Óbuda Uni Venture Capital and Sofia Angels Ventures, both of which are committed to supporting innovative technology companies with high growth potential. The investment will enable Denxpert to scale its operations and expand internationally, solidifying its position as a regional market leader in EHS&S solutions.

Founded as an independent company in 2021 after operating for 14 years as a business unit of EY Denkstatt, one of the leading sustainability consultancies in Central and Eastern Europe, Denxpert offers cloud-based solutions designed to streamline compliance with environmental, health, safety, and sustainability regulations. The software has already gained significant traction, being adopted by more than 500 companies

worldwide, including major internationallyknown businesses such as MOL, Magyar Telekom, Mercedes, E.On, Vantage DC, Rauch, PPF, and Vienna Airport.

The increasing demands for corporate sustainability reporting underscore the relevance of Denxpert’s software. In the European Union alone, starting in 2024, more than 50,000 companies will be required to produce highly detailed sustainability reports in compliance with the Corporate Sustainability Reporting Directive. Denxpert’s software is poised to be an essential tool for companies navigating these complex regulatory requirements.

“Denxpert plans to meet an exponentially growing market demand, as changing social and business expectations and various EU and national regulations require companies to publish more detailed and transparent sustainability data than ever before,” says Róbert Szücs-Winkler, CEO of Denxpert.

Outstanding Seed Funding

“I consider this seed round to be outstanding not only for its scale but also for its market message,

signaling the recognition of the increasingly prominent role of ESG in business,” he adds.

This investment marks the first venture by ÓUVC, which was established in

2023

with a HUF 10 billion fund aimed explicitly at supporting universityaffiliated startups and enterprises. It is the first venture capital firm in Hungary to focus on such initiatives.

Its co-investor, Sofia Angels Ventures, is known for investing in pre-seed and seed round tech startups, with backing from the European Investment Fund. The partnership between ÓUVC and SAV provides Denxpert not only with financial resources but also with valuable mentoring from industry experts, including Imre Hild, a seasoned venture capitalist, and Levente Kovács, rector of Óbuda University.

Denxpert’s vision is to become the most widely used EHS&S support

“Denxpert plans to meet an exponentially growing market demand, as changing social and business expectations and various EU and national regulations require companies to publish more detailed and transparent sustainability data than ever before.

I consider this seed round to be outstanding not only for its scale but also for its market message, signaling the recognition of the increasingly prominent role of ESG in business.”

The startup’s potential is further demonstrated by the recognition it has received within the industry. In just a few years of operation, Denxpert has garnered several prestigious titles, including the Smart Innovator Award from tech consultancy Verdantix. Additionally, the company was shortlisted for the Environment Analyst ESG Innovation Award, which was presented in early July.

20 Sept 2024

HOTEL

KEMPINSKI BUDAPEST, HUNGARY

BENCE GAÁL

Róbert Szücs-Winkler, CEO of Denxpert (left), is congratulated by seasoned venture capitalist Imre Hild, who will mentor the startup.

2 Business

Arenim Technologies Launches

‘Quantum-resilient’

Big 4 firm KPMG warns that quantum computers “will be able to break [today’s] common encryption methods at an alarming speed.” Arenim Technologies, a Budapest-based information technology company specializing in telecommunications security, has quietly launched what it believes is the world’s first comprehensive “quantum-resilient” system.

Comms System

for their users. I would say this will immediately cause chaos,” says Kun.

KPMG, the global corporate services firm, agrees. In a report this year citing a survey of businesses in North America, it found most were “extremely concerned” about quantum computing’s potential to break through their data encryption.

“Sixty percent of respondents in Canada and 73% in the U.S. believe ‘it’s only a matter of time’ before cyber criminals are using the power of quantum to decrypt and disrupt today’s cyber security protocols,” the report states.

Arenim Technologies’ answer to this challenge is an application dubbed KvantPhone. Described as a “post-quantum secure communications system,” it builds upon the company’s earlier “Crypttalk” encrypted communications system launched a decade ago.

Key Exchange

For the time being, since the technology for quantum computers is still in the research and development stages, the threat remains largely theoretical, Szabolcs Kun, co-founder and CEO of Arenim Technologies, tells the Budapest Business Journal in an interview.

However, the mere promise of what is heralded to be the vastly expanded capacity of these revolutionary computers has communications security experts frantically looking for solutions.

“The whole security world is emphasizing this threat right now because, when quantum computers [become] available, they will enable [nefarious] actors to decrypt or break the encrypted communications which today provide protection

What is Quantum Computing?

Quantum computers represent the next revolution in computing: they are “designed to use quantum physics for computing, which introduces unprecedented capabilities over traditional computation methods,” KPMG wrote in a report earlier this year.

Naturally, as in earlier chapters in the computing story, this new tool can do much good, having the power to transform everything from drug research to manufacturing to

From the start of KvantPhone’s development, Arenim has been carefully following the recommendations made by the U.S. National Institute of Standards and Technology (Nist), which is leading the global fight for cyber security.

autonomous vehicle navigation. However, criminal organizations, and even sovereign states, will inevitably attempt to utilize the new technology for nefarious purposes.

“Encryption is everywhere. As an immediate step, organizations need to understand their risk from the use of public key cryptography and how they value data in their environment. This will impact multiple systems and applications that are fundamental to business operation,” the report wrote, citing Michael Egan, quantum director for KPMG Australia.

administration, integration, [and] on-site deployment is important,” he says.

Ethical Hacker

Arenim Technologies commissioned Silent Signal (SS), a Hungarian IT security company (otherwise known as an “ethical hacker”), to assess the integrity of KvantPhone in April this year. In a summary of the report, seen by the BBJ, SS concluded: “During the security assessment, Silent Signal LLC’s experts haven’t exposed any security vulnerabilities.”

“Silent Signal failed to respond to a BBJ emailed request for further comment on KvantPhone.

Arenim has used a “softly, softly” approach to the initial launch of its latest product, apart from encouraging current users of Crypttalk (mostly telecommunications providers who use the application as a “white label” product under their own brand names) to upgrade to KvantPhone, which comes at the same price as the earlier application.

While admitting the potential market is “huge,” Kun says the cyber security sector “is a pretty conservative business,” meaning clients tread very warily and only take up new products after extensive examination and testing. Perhaps as a result, he is coy about the results so far.

As soon as Nist had reduced the number of recommended “postquantum cryptographic” algorithms for communication security, the Arenim team set about designing the quantumresilient KvantPhone system in detail. For this, they focused on the “key exchange,” which takes place at the very beginning of any encrypted telephonic communication.

“All industry experts see the risk as this key exchange mechanism that happens before we set up the [encrypted] channel. This could in future be deciphered by quantum computers,” says Attila Megyeri, chief technical officer and co-founder of Arenim Technologies.

To achieve this, the designers married the Kyber-1024 key encapsulation method, one of the latest algorithms recommended by Nist, with the older, “classical” Diffie-Hellman procedure (already in use in Crypttalk) to vastly raise the protection capabilities of the key exchange from any illicit penetration, even if using a quantum computer.

“There were many challenges with these new algorithms, on both security and network level, but our experts did a great job, with a hybrid crypto suite that offers extraordinary protection for threats on both post-quantum and legacy attack scenarios,” Megyeri argues.

Indeed, while acknowledging that some industry players have made progress in post-quantum cryptography solutions (for example, Apple has announced the introduction of post-quantum algorithms into its i-message application), Megyeri believes KwantPhone is the world’s first “fully fledged PQC communication solution.”

“To our best knowledge, we are the only solution providing comprehensive quantum-resilient algorithms; that is, not only chat but voice as well. Besides, we target business customers, where monitoring,

“We haven’t started the [mandatory] migration of CryptTalk users to KvantPhone, so exact results cannot be defined now, but a portion of new subscriptions is already KvantPhone. We are receiving several requests daily regarding the new technology, and the quantum-secure user base is building up,” he says.

Why the Rush to Act Now?

One section of this year’s KPMG report asks rhetorically: “When should companies implement quantum risk management?”

The response? “The answer is now.”

But since quantum computers are not, thus far, readily available, it begs the question: Why the rush? As a general answer, a vast amount of work is needed to protect all the potentially liable systems and data.

However, the report also highlights “bad actors” employing a “harvest-now, decrypt-later” approach.

In other words, adversaries steal encrypted files today and store them until more advanced quantum computers emerge, whereupon they will be decrypted for potential sale. Arenim’s Szabolcs Kun argues that this is precisely the reason for deploying KvantPhone today.

“Just imagine that you are running an embassy somewhere in a hostile environment, and you have an internet connection in that building. As soon as data packets on that wire leave the building, immediately, on the first telephone device, those data packets can be caught, copied and stored. Later on, with quantum computers, these can be decrypted. And you know nothing at all about it,” he says.

With this in mind, clearly, such government files, and indeed any data with long-term value, from health records to banking data, are already of great interest to shady organizations who hope to exploit them later.

In the words of KPMG: “The level of preparation that organizations do today is expected to be critical to limiting exposure and vulnerability to emerging threats, making quantum risk planning a priority.”

Szabolcs Kun, CEO of Arenim Technologies.

Attila Megyeri, CTO of Arenim Technologies.

Pioneering a Fresh Approach to how Real Estate is Used

The pre-pandemic boom years for commercial real estate are a distant memory, but Mátyás Gereben, country manager of CPI Hungary, who describes himself as an optimistic man by nature, says the current challenging market is compelling serious players to think again about how they go about business. On Jan. 1, 2025, the Hungarian affiliate he runs will launch a pioneering pilot scheme called CPI Club.

“We believed, until now, that we are real estate developers and asset managers whose prime objective is to find tenants for our properties, regardless of whether it’s office, retail, hotel or whatever. That’s oldfashioned thinking,” Gereben explains.

“If we want to survive, we have to become a company able to provide allaround services to those who decide to sign with us; among those services, renting an office is only one service. It will be the main one, but all the others, such as flexibility, mobility, community, and ESG, are services that, if we can provide them, we will have a chance to keep our tenants and attract others. Because we will be known as an all round integrated service provider, not only a real estate company.”

Gereben accepts that the concept is not new. But how CPI will implement it is, he believes, pioneering.

“We want to elevate it to a completely different level, to think not about individual properties, but on a portfolio level. If you’re a tenant in our portfolio, and if you rent an office building, we want to get to the stage where we are not just offering a space in an office building; if you’re a tenant with us, you don’t have only one location, but you have 20 location or 30 location, depending on where you live, on where it is most convenient for you to go to work or to have a meeting.”

Gereben is reluctant to go into too many details and risk losing a pioneering position, but the broad brushstrokes are apparent. Tenants won’t simply rent one closely defined 1,000 sqm space.

“One of the initiatives is to offer flexibility not just on a geographical level but also on the size of rented space.

Tenants will be able to temporarily amend their office space based on their needs, which can be returned during the lease period. We are introducing the ‘instant office’ concept in most of our office buildings: space fitted out by the landlord that the tenants can utilize as needed. In this way, tenants can optimize their size requirements and leasing conditions. We are rethinking the old-fashioned five-year lease concept because that’s not the market anymore. We must realize that needs and requirements are changing, and we have to adapt to survive.”

Creating Connections

He gives another example of offering a tenant a discount on various services CPI has access to within its portfolio, like the catering unit of a hotel. The company wants to use the power of its tenant base to help create connections and build businesses.

“Whoever becomes a member of CPI Club will have access to these services, and this hopefully is an innovative way of using real estate, adding mobility and community. We have almost 2,000 tenants renting space from CPI. How these 2,000 tenants can get to know each other, interconnect, and use

agreement, which includes what Gereben calls “very soft obligations” around how best to use the offices, waste management, and utilities. A good example is the suggestion to fit motion sensors so lights are on only when and where they are needed and not burning all the time.

“We have hundreds of thousands of square meters of space. But we can only make it sustainable if the actual users, the tenants, can understand and go with us on this initiative; thus, it’s important to us to try and educate them,” Gereben says.

Undoubtedly, green requirements are becoming more stringent, whether from the EU and the government at the regulatory level, bank financing, or even the markets themselves. CPI has a group-wide policy to create a genuinely sustainable real estate portfolio. To this end, it is seeking the latest version of the Breeam In-use certification; 14 projects are going through the process in Hungary.

Reevaluating Properties

Gereben makes the point that requalifying under version six of the certification is a quantifiable step up from the older iterations. It is, he says, an awful lot of work.

“We had to reevaluate all our properties to be able to provide enough information to certify our buildings,” he says. But he insists this greater scrutiny also brings benefits. He claims earlier iterations were little more than “greenwashing,” while the revised system demands that landlords “look at their operation at a much deeper level. Honestly, I welcome that initiative because, finally, we’re getting somewhere, even if it is a lot of work.”

Another area where ESG demands show their fingerprints is bank financing. Gereben gives one example that makes the contrast stark.

each other’s services, offers a big pool of opportunities. What we’re trying to create right now will hopefully put us ahead of the market,” Gereben explains.

The idea of the CPI Club is an indication of how the firm is trying to develop the “S” pillar of ESG (we’ll come to “E” in a moment). The most obvious marker is its commitment to having its buildings certified by Access4You, which provides detailed information on the accessibility of buildings and offers owners and operators insights to develop further their facilities for those in wheelchairs or with strollers, older people with limited mobility, those with low vision, blindness or assistance dogs, the hard of hearing and deaf, and those with cognitive impairment.

CPI doesn’t just make sure its buildings comply, however. According to EU statistics, about 15% of society, roughly one in every six people, has some special needs due to their health conditions. CPI encourages tenants to employ less abled staff where appropriate, to open up new workforce talent pools, and to create more diverse (and generally better performing) teams.

The socially responsible role of the landlord is also evident in CPI’s green leases, an attachment to the tenants’ lease

“In our shopping center portfolio, we have sought bank financing for two shopping malls: Campona and Pólus. We built a one-megawatt PV [solar panel farm] on top of Campona and secured financing within a few months. With Polus, we couldn’t do that, and we’re still searching for a financing institution to invest. It’s as simple as that,” he says.

That said, Gereben believes a considerable chunk of money is waiting to be invested globally.

“In the past 15 years, real estate offered the most stable income. For those who are risk-averse, this is a good solution. I believe it will still be a very stable business, but what is not sure is how we utilize these buildings,” Gereben posits.

“We’re trying to change the idea of how we use real estate. Yes, these are difficult times, especially here in Budapest, to keep the tenants, to maintain profit levels, to try to fill those gaps caused by the governmental institutions [moving to their own buildings], or the retailers who leave in Hungary, or the logistics companies who choose to put their operations into other countries. But, in general, I believe that real estate will still be profitable in the long term as an asset to invest in. And that’s why we must be smart about how we use our buildings.”

ROBIN MARSHALL

Mátyás Gereben, country manager of CPI Hungary

Tribe Budapest Airport Hotel

Structurally Completed

Budapest Liszt Ferenc International Airport will have a second hotel with direct access to the terminal next year, with the building having reached its structural completion. Within walking distance of Terminal 2, the fourstar hotel will be inaugurated in the first half of 2025.

Real Estate Matters

A biweekly look at real estate issues in Hungary and the region

connected hotel will meet the needs of guests wishing to stay near the airport at the highest quality standards,” comments Noah Steinberg, CEO of Wing.

“As

Tribe Budapest Airport will operate in direct connection with the existing three-star Ibis Styles Budapest Airport, which opened in 2018. The new addition will be an essential element of the airport’s infrastructure expansion program and is intended for business and leisure travelers, according to Wing, the developer behind both hotels.

The 8,000 sqm Tribe Budapest Airport will be the brand’s second hotel in Hungary and provide 167 rooms.

“We are proud that our group is implementing its second development project at Budapest Ferenc Liszt International Airport; the new terminal-

“As Hungary’s largest international airport is a key location for the Hungarian tourism industry, the opening of the Tribe hotel in 2025 will be a major milestone for both Wing and the airport. The new facility will further expand the airport’s service infrastructure, and our group will join the select club of real estate developers that have already delivered at least 1,000 hotel rooms in Hungary,” he says.

Welcome Development

Balázs Bogáts, the deputy chief commercial officer of the airport operator, also welcomed the news.

“Budapest Airport’s passenger traffic in 2024 is forecast to exceed the record year of 2019. The construction of the new hotel, a joint development with Wing, is another important step towards maintaining a high quality, comfortable and diverse service in and around the airport as passenger numbers continue

Hungary’s largest international airport is a key location for the Hungarian tourism industry, the opening of the Tribe hotel in 2025 will be a major milestone for both Wing and the airport.”

to grow. We are delighted to see that the construction has reached another milestone, and business and leisure passengers will be able to take possession of the new hotel as early as 2025,” he says.

Tribe Budapest Airport Hotel will feature a

150-seat

conference area, two meeting rooms, a fitness center and a rooftop skybar. It will also be one of the first Breeam-certified hotels in Hungary.

Taylor Wessing Advises Local Investors on Student Accommodation Project

The law firm Taylor Wessing has advised Recorde Asset Management and Forestay Group on the acquisition of a building in the Gellért Hegy area, which, after renovation, will become the Móricz Student Living residence and office building. The Budapest office of Taylor Wessing acted as transaction and corporate legal adviser on the deal.

The Recorde Forestay Residence Real Estate Fund, managed by Recorde Asset Management of the Concorde Group, acquired the building in June in a strategic

partnership with Forestay Group, which will also oversee the development. Financing for the acquisition and refurbishment was secured through a loan from the Austrian bank Hypo Bank NOE, with Taylor Wessing Budapest and Kálmán & Partners providing legal advice.

“The segment possesses a huge untapped potential, and we hope that more visionary investors have recognized this,” comments Dániel Ódor, partner and head of real estate at Taylor Wessing Budapest.

The Móricz Student Living project is set to open on Sep. 15. It aims to address the increasing number of international students and tourists in Budapest by creating an innovative student hotel. Recorde and Forestay had been seeking a suitable project for this purpose for some time. The 15,440 sqm building is undergoing partial internal renovation supervised by Forestay and will include 72 double rooms for long-term stays and traditional short-term rentals.

Wing will operate the building under a management agreement with Accor. Swietelsky Magyarország carried out the structural work of the hotel, with general construction done by Bernecker, which has already started the fit-out works. Ester’s Partners is responsible for the interior design.

For more real estate-related news, see our Green Business Special Report inside this issue.

Safestay Hostel Brand Acquires Site in Central Budapest

As part of a European expansion, Safestay Hostels has purchased a building in central Budapest for a 150-bed hostel from Curzon Capital; the refurbishment project is subject to planning approval. The hostel provider currently has 18 sites providing 3,580 beds in shared dormitories or hotel-type accommodation with en-suite bathrooms.

IWG Establishes Budapest HQ Brand

IWG’s new HQ brand of modern, flexible workspaces has made its debut in Hungary after opening in Budapest. Many property owners have vacant space to fill with the decline in demand for traditional office real estate. They are choosing to partner with IWG’s hybrid working platform and benefit from multiple brands, including Regus, Spaces, HQ, and Signature, says IWG.

The new HQ F99 is located at Fehérvári út 99. in southern Budapest and is in the process of Breeam “Very Good” certification.

“Hybrid working has become an irreversible trend and is a better working model for people, profits and the planet. It is no surprise that companies and their employees in Budapest continue to shift to the hybrid way and enjoy the flexibilities and benefits it brings,” says Yulia Lytvynenko, country manager and sales director for Ukraine and Hungary.

“We are very pleased to introduce this latest cuttingedge hybrid working facility in the capital. We are seeing strong growth in the region and are optimistic about further expansion opportunities throughout Budapest and Hungary,” she adds.

GARY J. MORRELL

The Tribe Budapest Airport Hotel by Wing.

White Raven Skybar Partners With Halimba Crystal for Exclusive Fall Collection

This fall, the White Raven Skybar & Lounge is introducing a new collaboration that celebrates not only fine wines but also how they are served. The bar, known for its panoramic views, is now pairing its selection of boutique Hungarian wines with handcrafted crystal glasses from the Halimba Crystal factory under the “Halimba Design Collection” banner.

of Budapest by road in Veszprém County). She emphasized that every piece is handmade, involving around 15

skilled artisans for each glass.

These glasses, crafted from highquality, lead-free crystal, are not only lightweight but also quite durable. Each glass undergoes rigorous inspection, with five experts checking for any tension before it is approved for sale. Wedded to their craft, some of the employees at Halimba have been with the company for several decades.

The Halimba Crystal glasses featured in this collection echo the enduring

charm of traditional craftsmanship and a glassmaking technique that has remained essentially unchanged for more than 2,000 years. Established in 1995, the Halimba manufactory has grown to export its products to more than 20 countries and is now a serious player on the world stage when it comes to artisan glass.

Form and Function

The design of the glasses is not just about aesthetics but also functionality. The stems are intentionally designed to be thin, minimizing unnecessary heat transfer from the hand to the wine. This detail, which might at first look like a purely design decision, allows enthusiasts to enjoy their wine

at the desired temperature for longer, enhancing the overall tasting experience.

Under the collaboration, White Raven guests looking for a refreshing white for a warm September night can enjoy the Centurio Fáy-domb Sárgamuskotály 2023 or the Malatinszky Rosé Battonage 2018 if they are looking for a serious rosé with a surprisingly rich color.

Those who prefer hearty reds will also find something to suit their taste: the Sebestyén Görögszó Bikavér

is also part of the collection. For those with a sweet tooth, the Gizella Szamorodni 2019 pairs wonderfully with a cheese platter or white chocolate desserts and is also available.

On the sidelines of the presentation, several vintners shared their concerns about the impact of this year’s drought on the harvest. Some grape varieties had to be harvested in late August, well ahead of the traditional picking season, to prevent the grapes from withering completely.

This early harvest might signal a challenging year ahead for certain white wine varieties.

When asked how he planned to cope with this, one vintner wryly remarked, “Well, I am certainly going to take a holiday on the Adriatic coast this September.”

While the view over Budapest from the skybar atop the Hilton Budapest in the Castle District is a highlight, it is just one aspect, the bar team tells the Budapest Business Journal . White Raven aims for an experience beyond the visual, incorporating elements to engage all the senses of guests who visit the bar.

The skybar pays homage to contemporary applied arts and traditional craftsmanship, blending these elements into a cohesive, artinspired theme. The fall collaboration follows earlier successful partnerships, including an exclusive deal with the Laurent Perrier Champagne House and the creation of the Strelizia cocktail, inspired by Hungarian designer Bori Tóth’s silk scarf.

During the event introducing the collaboration, Fanni Piskor, a wine expert and ambassador for Halimba Crystal, highlighted the deep-rooted tradition of glassmaking in the tiny rural village of Halimba (150 km southwest

BENCE GAÁL

Fanni Piskor, wine expert and ambassador for Halimba Crystal.

3 Special Report

Green Business

Sustainability Accreditation the Market Norm for Office and Industrial

The emergence of thirdparty sustainability accreditation systems reflects the need for real estate market actors to provide independent and transparent ESG-related data and information for the benefit of state and international organizations, tenants and end users, financiers, investors and other stakeholders in a real estate project.

representing 2.1 million sqm of stock as of the first half of the year: accreditation is the standard practice for most new buildings, as they have significantly lower vacancy rates and higher rents than non-certified developments.

“Green building certification systems can be improved by planning and integrating with urban policies, involving stakeholders, and emphasizing climate resilience, ” comments Zsombor Barta, ambassador to the Hungarian Green Building Council (HuGBC).

Priorities for construction include prioritizing sustainable materials, waste reduction, and workforce training, encouraging green leases, performance monitoring, and tenant education, ensuring healthy interior environments, flexible designs, and sustainable furnishings, he says.

For property and facility management, the list includes optimizing operations, implementing preventive maintenance, evaluating performance, and training staff, Barta adds.

Breeam is the most popular thirdparty office sector accreditation option, followed by Leed and increasingly Well and Access4You when it comes to well-being and health, interiors, office management and design issues.

Reflecting the growing concern with ESGrelated issues, more building owners are striving to improve existing assets by opting for Breeam and Leed In-Use accreditations.

According to Colliers, some 48% of speculative and owner-occupied office stock in Hungary was certified by Leed, Breeam or the German-based DGNB,

Skanska, a prolific office developer in Hungary and the CEE region, has developed an offer to tenants consisting of services that aim to support them in creating sustainable workplaces.

“Our perspective extends beyond the lease document itself; we see a green lease as a comprehensive framework guiding the sustainable use and management of the building,” says Veronika Themerson, center of excellence director for environment at Skanska CEE.

Primary Focus

“We adopt a broad approach to lease agreements, with a primary focus on the ESG solutions incorporated in our buildings; for example, demand-controlled ventilation, smart BMS [building management system], heat pumps and sustainable use of the building. These solutions are detailed in the building standard specification and fit-out works specification attached to our lease agreements, ensuring that our practices remain aligned with the highest sustainability and efficiency standards,” Themerson explains.

A relatively new concept, there is no definitive definition of what constitutes a green lease.

“A green lease, first and foremost, represents the mutual interest between the landlord and the tenant in pursuing sustainability and energy efficiency. Such agreements may include specific KPIs and detailed measures to reduce

resource consumption, such as energy, water, and waste,” comments Norbert Szircsák, the head of ESG Strategic Advisory Services for Colliers International, based in Budapest.

“Tracking consumption at the tenant level is vital, especially with the rise of ESG reporting. An advanced green lease might also include clauses that allow for cost recovery related to energy efficiency upgrades that benefit the tenant,” he says.

“I do not believe that incorporating ESG factors into a development, especially if planned early, significantly increases the project budget. In fact, many of these measures have a quick payback, both in terms of reduced energy bills and increased occupant satisfaction,” Szircsák adds.

CPI Hungary says its primary goal with green leases is to jointly reduce the environmental impact of both the building and the leased premises, which includes improving overall environmental performance.

“To achieve this, we, as the landlord, along with our occupiers, must collaborate by aligning our interests in implementing and maintaining sustainable practices. This collaboration should extend through the planning, execution, and evaluation phases of the green lease initiatives,” the company tells the Budapest Business Journal.

Educational Tool

“The green lease serves as both an educational tool and a solid foundation for our occupiers to develop their own ESG goals related to their leased premises. It also encourages them to motivate their employees and partners

towards more sustainable behavior and company culture. In terms of content, we focus on key elements with the greatest environmental impact, such as energy performance, water and waste management, fit-out construction, cleaning, alternative transportation, and the working environment,” CPI adds.

Breeam and Leed deal more with the structure of the building. With regard to office interior issues, 180,000 sqm of office buildings are Well Core Certified in Budapest.

“The Hungarian National Bank has enrolled its headquarters in Szabadság tér for Well Certification and celebrated Precertification in April during the visit of the International Well Building Institute to Budapest,” says Regina Kurucz, a sustainability consultant and Well assessor.

“We expect people to become more conscious about the connection between the built environment and their personal health. By the end of the year, we expect 220,000 sqm of office buildings to be Well Core Certified,” she adds.

As ESG considerations can no longer be avoided in real estate development projects, it makes sense to plan for them from the start and take into account the efficient operation of a project at the design stage, comments Zsolt Kákosy, head of property management at Icon Real Estate Management.

“This will ensure that not only the property but also its future tenants can operate according to ESG criteria. The role of PM and FM in the ESG market environment is essentially to bring buildings up to ESG standards, contributing to increasing the value of the property for the market, the owner, and the tenants,” Kákosy says.

ESG elements and processes are now intrinsic in the higher levels of the industrial market. Developers and park operators are delivering more highly specified Breeam and Leed accredited complexes. ESG-compliant buildings are seen as commanding higher rents and returns on investment and are necessary to meet tenant specifications.

In the Budapest area, 45% of the speculative industrial stock (42 buildings) is sustainability certified, according to Colliers. Almost all are Breeam certified, with 78% at the “Excellent” or “Outstanding” level. CTP, HelloParks and Prologis lead the way in terms of the development of accredited stock.

“While green certification previously focused on offices, they have now gained significant emphasis in the industrial and logistics [sectors] as well. There are also an increasing number of certifications for other types of properties, such as hotels, with one example being Melea: The Health Concept in Sárvár,” comments Colliers’ Szircsak.

GARY J. MORRELL

The industrial sector is increasingly adopting green certification, with developer HelloParks among those leading the way.

MBH Pushing Green Products and Loans to Meet ESG Commitments

András Puskás, the deputy CEO of MBH Bank responsible for ESG and sustainability (among other things), talks to the Budapest Business Journal about the bank’s drive to become a local champion of conservation, decarbonization, sustainability and near-zero emissions.

BBJ: MBH Bank announced its “Bank of Sustainable Future” program late last year. What is this?

András Puskás: At the Budapest Climate Summit 2023 international conference last year on Dec. 4, we announced our comprehensive ESG framework program, which spans several years. Through this initiative, we aim to support Hungary’s climate goals and decarbonization efforts in the coming years through three key commitments. The first focuses on conserving biodiversity in collaboration with the Ministry of Agriculture and the National Parks. We have begun developing biodiversity conservation programs that will allow our bank to contribute to maintaining a healthy ecosystem. For our second commitment, we have set the goal of achieving decarbonization targets, with the first step being that our bank will become a signatory to the Science Based Targets Initiative. Lastly, the third commitment outlined in the program focuses on boosting green lending by introducing green financial products.

BBJ: A pivotal program element is a cooperation agreement MBH Bank signed with the Ministry of Agriculture. What is the significance of this, and what are its goals?

AP: As a bank that is entirely Hungarianowned and a key player in the domestic economic sphere, it was essential for us to create a program that would allow us to focus on supporting Hungary’s sustainability goals, with a significant emphasis on preserving our country’s green values. Therefore, it is of great importance to us that we can work with the Ministry of Agriculture and the Hungarian National Parks to protect the country’s green habitats and wildlife. Through this collaboration, we are providing HUF 30 million in support to the National Parks, which will be used

to finance jointly determined programs to address specific problems and challenges faced by individual National Parks.

BBJ: How has the support of the 10 Hungarian national parks in Hungary developed this year? What joint projects have been launched?

AP: This year, we have already begun active collaboration with the National Parks, during which we first identified unique issues affecting the various areas. Based on this, we determined how to involve our colleagues in finding solutions to the challenges. For example, in cooperation with the Bükk National Park, many of our employees will contribute to its renewal. As part of a team-building day, our employees can participate in the establishment and renovation of the Szinva nature trail stations, as well as in a litter collection initiative. Additionally, we support the Wildcat Protection Project, assist in implementing a solarpowered water replenishment system in the Duna-Tisza region, and back a program to increase the breeding success and species protection of terns.

BBJ: MBH Bank became the first Hungarian-owned bank to sign up to the internationally recognized Science Based Targets Initiative this year. What did this entail, and what has it revealed about your operations?

AP: Our bank placed significant emphasis on ensuring that our

decarbonization efforts were given adequate attention right from the outset when developing our ESG strategy. As part of this, we have launched our Net Zero Banking project in recent years. Under this, not only have we calculated our own and indirect greenhouse gas emissions, but we also aim to be the first Hungarianowned bank to disclose the emissions of our financed portfolio publicly. This is part of our commitment to becoming an institution with near-zero emissions. Our efforts are supported by our membership in the Sciencebased Targets Initiative, which allows us to have our carbon dioxide reduction targets internationally validated scientifically and offers further assistance in reducing our emissions.

BBJ: MBH Bank is committed to increasing the share of green loans by at least four percentage points by the end of this year through a green product development program. How is this progressing?

AP: We have made significant progress in our green product development. As part of our Sustainable Future Bank program, we’ve introduced new green loan products and account packages focused on sustainability, biodiversity, and energy efficiency. Our entire banking group actively contributes, continuously launching new green products like green mortgages and funds.

BBJ: The MBH ESG Fund family includes the renewed MBH Greening Companies Equity Fund and MBH ESG New Energy Equity Fund, and the new MBH ESG Global Equity Fund. What are their aims, and how successful are they proving?

AP: We are aware that, for conscious investors, we must not only provide opportunities for achieving competitive returns but also address ESG considerations. In this spirit, we have designed our revamped funds with the goal that their success benefits not only the individual investor but also our global environment. The aforementioned funds focus on various aspects of sustainability, allowing every investor to find the most ideal and favorable structure for their needs. Some focus on sectors like energy and real estate, while others target leading renewable energy firms or companies adhering to ESG principles worldwide.

“As a bank that is entirely Hungarian-owned and a key player in the domestic economic sphere, it was essential for us to create a program that would allow us to focus on supporting Hungary’s sustainability goals, with a significant emphasis on preserving our country’s green values.”

BBJ: The bank also has plans to issue green bonds. Where do you stand with this?

AP: MBH Bank’s green bond issuance is still in the preparatory phase. Currently, we are aligning with EU green certification requirements and developing the necessary frameworks and standards. Through this bond issuance, our bank aims to establish a strong position in the green loan and bond market, thereby contributing to supporting and achieving domestic and international sustainability goals.

BBJ: Finally, in December 2023, MBH Bank was the main sponsor of the Budapest Climate Summit. Why was this, and do you plan to repeat that backing this year?

AP: By supporting last year’s Budapest Climate Summit, we aimed to highlight MBH Bank’s commitment to sustainability and engage in the international discourse on building a green future. The event allowed us to showcase how financial tools, such as green loans and bonds, can help combat climate change. Our commitment to sustainability remains strong, and we look forward to supporting similar initiatives.

András Puskás, deputy CEO of MBH Bank.

Green Requirements now Central to Investment Decisions

ESG issues are becoming predominant in the real estate investment process as institutional (and increasingly private) investors will be expected to justify such elements of an asset to their board and shareholders. Investment strategies also need to harmonize with EU taxonomy regulations and general market expectations.

From the vendor’s perspective, sustainability-accredited properties attract more favorable pricing. With analysts agreeing that there is a widening gap between ESG-compliant and non-compliant products with regard to market success and a sale to an investor, a further option is the purchase of value-added assets and redeveloping and renovating them following ESG principles.

“In today’s landscape, investors use ESG as a screening method for choosing where to invest. Properties that do not have any ESG efforts or activities are passed over for projects that are dedicated to ESG and which incorporate sustainable practices into their construction,” comments Hubert Abt, CEO of Workcloud24. ESG is, therefore, seen as significantly impacting investment markets by encouraging sustainable practices and transparency. On the investor side, this will increase demand for ESG-compliant assets, driving capital towards sustainable investments and potentially offering higher security with better risk-adjusted returns. Simply put, such properties are more attractive to investors because they command higher rents and have lower vacancy rates.

“ESG considerations are increasingly shaping investment decisions, with investors and stakeholders favoring properties that demonstrate strong sustainability credentials,” comments Tamás Balogh, a senior associate in the real estate team at law firm DLA Piper.

“Projects that comply with ESG standards are often easier and more cost-effective to finance due to their lower risk profile and alignment with investor values. This shift is expected to lead to a premium for ESG-compliant assets in the investment market,” he says.

Standardizing Certificates

“Another impact is the trend towards standardizing energy performance certificates to ensure transparency across the EU. The long-term benefit of sustainability principles is to increase the value of the property, and energysaving factors are now often considered a deal breaker by the majority of landlords, investors and tenants,” Balogh adds.

One of the most notable deals last year was the acquisition of the 27,000 sqm Leed “Platinum” certified H2Offices Phase I by the Hungarian Erste Real Estate Fund from the property’s developer, Skanska.

“The projects of Skanska Hungary offer top-quality office spaces in great locations, which ensures success and satisfaction for tenants and investors. All the investments of Skanska Hungary will undergo a Leed, Well Core & Shell, and Well HealthSafety Rating certification process, confirming their compliance with the principles of sustainable development, optimal energy consumption, as well as a safe and superior work environment,” says Veronika Themerson, center of excellence director for environment at Skanska CEE.

One of the most notable deals last year was the acquisition by the Hungarian Erste Real Estate Fund of the 27,000 sqm Leed “Platinum” certified H2Offices Phase I from the property’s developer, Skanska.

“Introducing ESG aspects to real estate cannot be considered solely from the cost perspective without considering the benefits. More and more companies are looking for properties that provide the highest standards of quality of work for their employees while minimizing the impact on the environment. Investors are also looking for assets that are prepared for future predicted climate change and changes in legislation,” she adds.

In another significant office transaction, Atenor sold the 15,500 sqm

Breeam “Excellent” rated RoseVille office complex in Budapest to BXR, a Londonbased fund making its debut in Hungary.

“The main focus of investors is to secure income for the long-term, while the environment around us is changing continuously. Not only the climate, but the technologies and the legislation are changing as well; therefore, sensible investors are better off considering the future in their investment decisions than maximizing immediate income,” comments Norbert Schőmer, country manager at Atenor Hungary.

Cost Concern

One significant concern of developers and investors is the perceived higher costs of ESG and sustainabilityaccredited development as required by the EU Taxonomy.

“ESG investments impose substantial costs on market players in the shortterm. The renovation and retrofitting of properties to meet energy efficiency and ESG standards require significant investments that tenants, owners, and buyers are often reluctant to make due to economic rationales. Consequently, EU-wide regulations are needed to expedite this process

by mandating specific requirements and, more crucially, measures to curtail environmental damage,” argues Tibor Ruzsinszki, head of asset and property management at Gránit Alapkezelő Zrt.

These cost concerns underscore a need for improved and addressable data that boosts transparency, reduces greenwashing and promotes sustainable investments.

“Due to the EU’s SFDR [Sustainability Finance Disclosure Regulation], investors must now factor in sustainability risks when making investment decisions. Companies can face environmental, social, or governance challenges that could negatively affect investment returns. Investors can select investments based on their sustainability preferences by evaluating the sustainability risks associated with each investment,” says Edina Domokos, business development and strategy analyst at Gránit Alapkezelő Zrt.

“Mandatory sustainability reporting, as mandated by EU regulations, will provide a clear picture of companies’ and suppliers’ sustainable operations, enabling investors with sustainability preferences to make informed decisions. Companies taking steps towards sustainable operations will be able to attract more funding from investors, creating a competitive landscape,” she adds.

ESG considerations are increasingly shaping investment decisions, with investors and stakeholders favoring properties demonstrating strong sustainability credentials. Projects that comply with ESG standards are often easier and more cost-effective to finance due to their lower risk profile and alignment with investor values. This shift is expected to lead to a premium for ESG-compliant assets in the investment market, concludes Balogh.

GARY J. MORRELL

ESG Trends Gradually Affecting all Real Estate Sectors

Kata Mazsaroff, managing director of Colliers Hungary, sits down to discuss investments, vacancy rates, speculative developments, and the spread of green certification and ESG compliance in the Hungarian commercial real estate market with the BBJ.

BBJ: How would you characterize the real estate market in Hungary today?

Kata Mazsaroff: The two most significant commercial real estate market segments, offices and industrial properties, face different trends. In the office market, the amount of new construction overall in the CEE region is on a downward trend, which will lead to a shortage of new supply. The increasing vacancy rates and more restrained demand compared to pre-pandemic times are also reflected in the expected speculative deliveries: 25% fewer deliveries in Budapest this year than in 2023 and approximately 50% fewer than in 2022.

Although vacancy rates are rising, the tenant market hasn’t dried up. The overall occupier demand in Budapest increased by 21%, while net demand showed a 7% growth yearon-year. However, this is notably lower than the pre-pandemic level, primarily due to hybrid working and the use of AI for automation, leading occupiers to rationalize their footprint. The occupier market is still active, but we lack new entrants. Tenants already present are looking for ESGcompliant, energy-efficient office buildings in central locations with a variety of services, as employee well-being and productivity are clearly in focus for occupiers. The vacancy rates in new builds and existing office buildings converted to meet ESG expectations reflect this demand: it is lower in these assets than in the market average.

Concerning the industrial market, in recent years, there have been significant investments and announcements mainly in the northwest and northeast regions of Hungary, primarily related to the automotive industry, especially

battery manufacturing. We have experienced continuous growth in FDI here over the past four years. In 2023, the announced FDI value doubled compared to 2022, reaching EUR 13 billion; the total for the past four years amounted to nearly EUR 30 bln. Among the 2023 FDI announcements, the investment of the Chinese electric car manufacturer BYD in Szeged stands out, with a value of almost EUR 5 bln. In the coming years, we expect growth in the south region primarily attributed to the available infrastructure (electricity, water, sewage supply) and governmental intentions.

Regarding Budapest and its surroundings, there were minimal new deliveries, with only one property handed over in H1 2024. Net demand grew by 29% year-on-year, reflected in the decreasing vacancy rate. The industrial real estate in Greater Budapest amounts to 3.564 million sqm, of which 87.7% are “Big Box” facilities. Overall, the volume of speculative developments is more restrained, with 16% fewer deliveries expected this year than in 2023 in Hungary. However, by the end of 2025, 700,000 sqm are confirmed to be delivered in Hungary, of which approximately 400,000 sqm will be in Greater Budapest. These figures may increase subject to demand. Tenants are seeking energy-efficient and sustainably operated industrial properties, and major developers are responding to this by committing to ESG compliance and minimizing their carbon footprint.

financing requirements, the rise in energy prices over recent years has highlighted the importance of sustainable and energy-efficient operations in the hotel industry. This is also an international trend, where owners and an increasing segment of investors and guests prioritize hotels that focus on sustainability. A good example is Melea: The Health Concept Hotel, which recently received Leed “Gold” certification with the assistance of Colliers. In the retail sector, some shopping centers, such as Allee and Etele Plaza, already have certifications. A motivating factor is the increasingly environmentally conscious policies of shoppers and certain tenants, elevating the importance of malls adhering to ESG-compliant operational principles. The residential sector has lagged behind, though it should be noted that newly built homes must already meet strict regulations, such as energy efficiency standards.

BBJ: Is Hungary suffering compared to other CEE markets, or is the picture similar?

BBJ: How are ESG and green issues influencing the market, and is this equally so across all sectors?

KM: The number of certified buildings varies by sector, but to this point, office and industrial real estate have the most certifications; however, there is a growing trend in the hotel and retail sectors. In the case of offices, not only the “E” (Environmental) aspects are becoming more important, but also the “S” (Social) factor, as demonstrated by certifications like Acces4You and Well. These buildings have greater tenant appeal, as their speculative vacancy rates are lower than the market average. They are also more sought after from an investment perspective because they offer higher rental income, leading to better cash flow and a more favorable position for financing. In the industrial real estate market, certifications focus primarily on energy efficiency, sustainability, and environmentally conscious operations, emphasizing the “E” aspect, typically in the form of Breeam and Leed certifications. A significant portion of certified properties are linked to a few more prominent developers, such as CTP, Futureal/HelloParks, and Prologis.

BBJ: For years, office and industrial/ logistics have led the way regarding green certification. Are hotel, retail and residential catching up?

KM: In the hotel sector, few buildings have certifications; however, market demand is growing. Beyond the

KM: Regarding the overall office occupier demand and supply trends, including ESG certifications, the situation is quite similar across the CEE market. The ESG policies of major international developers are not confined to just one country but extend across borders. In every market, properties that fail to meet the principles of environmentally conscious and sustainable operations face lower tenant and investor demand.

BBJ: When might investors return to the Hungarian market in large numbers?

KM: We experienced minor changes in Europe’s environment for commercial real estate investments in the first half of this year. Interest rate decreases, particularly for euro loans, are essential for market recovery, investments to be realized on a larger scale, and for demand in the market to grow. While some shifts are visible, more significant changes are not expected until 2025.

BBJ: In the meantime, are there good deals to be done given the lack of competition, or is the market subdued for a good reason, and everyone simply playing “wait and see?”

KM: Although investment volume is indeed low, considering that in the first half of this year, we had the lowest investment volume in recent years when compared annually, there are still some positive examples. For instance, in the first half of this year, the Faedra 22 industrial logistics property was sold to an international investor. It is well-located and ESG-compliant, and there has always been (and will continue to be) demand for such properties.

ROBIN MARSHALL

Kata Mazsaroff, managing director of Colliers Hungary.

Budapest ONE Achieves Highest ‘Platinum’ Well Core Rating

Phases II and III of the 66,000 sqm Budapest ONE office complex have received the highest “Platinum” level of Well Core certification. Futureal was the first company in Hungary to commit to promoting peoplecentered buildings. As a result, several of its office developments have now achieved Well certification, totaling 130,000 sqm of lettable space, says Futureal.

The first Well certification in Hungary was awarded to Futureal’s Corvin Technology Park office building on Corvin Sétány in 2021. That was followed by the two phases of Advance Tower and now the three phases of Budapest ONE.

Indeed, the opening phase of the latter development was the first in Hungary to meet the International Well Building Institute’s most stringent Well “Platinum”

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level requirements in 2022, which the last two phases have subsequently also met. Abud Engineering supported Futureal in achieving the rating.

The Well certification aims to guarantee that the air and water quality in the office building is of the highest standard, as are

Wing Completes Liberty, Unveils Contemporary Artwork

Wing has celebrated the completion of Liberty, which the developer described as one of the country’s most modern and ESG-compliant mixed-use complexes. The second phase of the project, comprising a total of 20,000 sqm, has been inaugurated, and a contemporary sculpture unveiled.

“The Liberty complex offers an ESGcompliant, high quality and sustainable environment. It is dynamic in its appearance, is Breeam “Excellent” rated, energy efficient, runs on 100% green electricity and has a near-zero energy demand,” says the developer.

“The handover marks the completion of a project where the range of services for tenants is now complete: the premium well-being and amenities of the Ibis and Tribe Budapest Hotel, the panoramic Cloud IX rooftop bar, the Tribe Table restaurant and café, and the conference facilities have been complemented by a terrace and sports courts on the roof of the building.

Nearly 80%

of the building has already been leased, but there is still some office space available,” Wing adds.

As part of Liberty’s inauguration ceremony, the “Lemniscate,” a sculpture designed by Péter Szalay and commissioned by the developer, was unveiled between Liberty and the neighboring Telekom Campus, both the work of Wing. The artwork is eight meters wide and four meters high and made of stainless steel.

“Liberty is one of Wing’s iconic real estate developments, which has already been chosen by a number

of national and international companies. The completed office building offers excellent opportunities for potential tenants to move into a people-oriented complex with a variety of services and green solutions, in line with modern real estate trends,” commented Noah Steinberg, CEO and chairman of Wing, at the inauguration.

“With the Liberty and Telekom Campus buildings, Népliget and its surroundings have been repositioned from a previously under-appreciated location to a highly prestigious office submarket. The variety and quality of services available here will be enjoyed by companies, employees, residents and the wider community, as well as visitors for tourism purposes,” he said.

Diverse Space

“At Wing, it has always been important to us that our buildings are not only outstanding in their functionality but also in the values they represent. We believe that with the newly inaugurated ‘Lemniscate,’ the space we have envisioned will become more diverse and special, and we trust that it will provide an experience for as many people as possible,” Steinberg added. “It is important that contemporary art does not disappear from the built environment. However, this

GARY J. MORRELL

Noah Steinberg, CEO and chairman of Wing, speaking at the inauguration ceremony for the completion of the Liberty Building.

HUNGARY

ROMANIA

the acoustics and lighting. The building provides a multifunctional “Well room,” courtyard, green roof garden and a rooftop running track.

Showers, changing rooms, and numerous indoor and outdoor bike storage facilities are available. Half a hectare of open public space has been created inside the complex. A lowflow irrigation system has also been installed, controlled by the weather. The development is equipped with a building management system, heat recovery ventilation and solar power to meet the electricity needs of the offices; electric car charging is available, as is selective waste collection.

“The office market has changed drastically in recent years, with tenants turning to office buildings that provide inspiring communal spaces for colleagues and team spirit while contributing to companies’ ESG performance,” says Gábor Radványi, chief architect at Futureal Development.

“The success of the Budapest ONE concept is demonstrated by the fact that the new phases are home to Vodafone’s new office center and BT’s regional service center, among others,” he adds.

Well-certification Growing

The number of Well-certified buildings in Europe has risen by 23% in the first half of 2024, according to the IWBC.

The seven Well “Gold” accredited office buildings in Hungary are Agora Tower and Agora Hub by HB Reavis, IP West (the first renovation certified in Hungary), Corvin 5: Corvin Technology

and Science Park, Advance Tower Phase I and II, all by Futureal, and the Nordic Light Offices Trio, developed by Skanska.

“The office market has changed drastically in recent years, with tenants turning to office buildings that provide inspiring communal spaces for colleagues and team spirit while contributing to companies’ ESG performance.”

Well-precertified office projects include the Corvin Innovation Campus by Futureal, H2Offices Building “B” by Skanska, Tlila by Hexagon Offices, the Academia Modern Wing and Academia Traditional Wing by ConvergenCE, Scandinavian Gardens, and Essence Garden “A,” “B,” and “C” by S Immo, and the headquarters of National Bank of Hungary, renovated for the MNB’s centennial celebrations.

Well’s holistic, evidence-based approach has provided a roadmap for organizations to promote social sustainability performance and enhance their ESG strategy, says Regina Kurucz, sustainability consultant at Rewell Consulting.

New Implementation Decrees for Hungarian ESG Act Now Out

On Aug. 15, SzTFH Decree 12/2024 (VIII. 15.) and SzTFH Decree 13/2024 (VIII. 15.) were published in the official Hungarian Gazette as implementation decrees playing a crucial role for companies subject to corporate sustainability due diligence obligations under the ESG Act.

While the ESG Act set out the framework for the sustainability due diligence obligations for large and public-interest SMEs, the new decrees provide the detailed rules related to such due diligence obligations, the minimum requirements for the ESG report, the ESG questionnaire and the registration of ESG software.

to the Supervisory Authority of Regulated Activities (“Sara”) using the form published on the Sara website. The ESG report will have to follow the structure set out in the implementation decrees and include chapters on the presentation of the risk management system, how the undertaking identifies and manages environmental, social and governance risks, a description of the complaint-handling procedure or system and a description of the possible directions, results and targets for the re-evaluation of the risk management system and reporting.

requires new forms of collaboration between investors, real estate developers, designers, and visual artists; collaborations that have become increasingly rare in Hungary over the past decades,” said József Mélyi, curator in charge of the Wing Contemporary Art Program.

“Wing’s commitment is exemplary, primarily because it is open to the experimental tendencies of contemporary visual art, allowing for the realization of a significant work within a Central and Eastern European context,” Mélyi added.

by Wing.

The construction of Liberty as an energy-efficient green property was also supported by public funds invested under the Real Estate Fund sub-program of the Baross Gábor Capital Program. The Hungarian Development Bank provided funds as a co-investor to the winning real estate funds in the Capital Program’s tendering process, thus contributing to increasing investment activity, improving energy efficiency and implementing green developments.

Under the new implementation decrees, companies must set up a risk analysis system consisting of an annual process carried out by June 30 each year. Companies will have to assess the impact of their own and their direct suppliers’ activities at least every 12 months. Ad hoc assessments should be carried out without undue delay when there is a significant change in the impact and when there are reasonable grounds to believe that new risks of adverse effects may arise.

The risk management system includes, among other things: i) taking appropriate measures to identify actual and potential adverse effects arising from a company’s own activities, those of its subsidiaries or those of its direct suppliers related to the activities of the enterprise; ii) materiality assessment and risk analysis related to direct suppliers; iii) developing a methodology to assess the identified risks; iv) analyzing and prioritizing adverse impacts to perform the preventive and remedial obligations; v) presenting the results of the risk analysis to the enterprise’s management in the form of a report; vi) preventing, eliminating or minimizing adverse impacts by taking corrective action; and vii) monitoring of the risk management system to be reviewed at least every 12 months.

The implementation decrees also set out the detailed minimum requirements of the ESG report, which will have to be submitted

The ESG questionnaire has also been adopted. It will form an annex of the ESG report and contains the questions on which the ESG reporting and supply chain due diligence will be based. The ESG questionnaire consists of a comprehensive set of questions classified under the topics of environment, society and governance. To assist in direct supplier screening, the size of the supplier (micro, small, medium, or large enterprise) and its geographical location (EEA and Switzerland, OECD, or other) are matched to the range of questions to be answered.

If an undertaking is required to provide additional data within the scope of the ESG Act but beyond the content of the ESG questionnaire, a request for further data must be submitted to Sara by the entity requiring the additional data. If granted, the permit to provide data will be valid for one year from the date of notification of the supervisory authority’s decision. Therefore, companies having their own supply chain due diligence questionnaire should review the ESG questionnaire to identify any discrepancies, as data requests not included in the ESG questionnaire may only be submitted to suppliers after obtaining a permit.

To summarize, compliance with the sustainability due diligence obligations is a comprehensive and time-consuming exercise, and companies should start the necessary steps to establish their risk management system and comply with the other sustainability due diligence obligations under the new implementation decrees of the ESG Act. INSIDE VIEW

CMS Veronika Kovács Senior Counsel, Commercial law & ESG

CMS Gábor Czike FRICS - Partner, Head of Real Estate and Consruction & ESG CMS László Jókay

The “Lemniscate” sculpture, designed by Péter Szalay, was commissioned

Market Talk: How ESG is Shaping Real Estate

ESG compliance is a necessity for a successful real estate project with increasingly stringent and all-embracing international regulations and market requirements. Sustainability accreditations act as independent means of providing international comparisons for the attributes of a building.

ESG is thus a prerequisite from staff, tenants, financers

Most “environmental” issues are dealt with under the traditional accreditation systems, but the selection of a project location and the cooperation with local communities, organizations and authorities happens in the “Social Framework” of our ESG strategy. For example, near one of our development sites, we found a homeless person living in a concrete shaft, which draw our attention to supporting a local NGO helping the homeless. I could also mention that we work together with a diverse selection of consultants, engineers and sub-contractors to provide opportunities to local businesses.

Norbert Schőmer Country manager

Atenor Hungary

Sustainability certifications have been with us for more 30 years and continue to evolve. Developing a certification system that makes projects comparable on a global level and sets a common standard for every building is challenging. However, I believe the current trend of placing more emphasis on embodied carbon, operational carbon emissions,

and investors, as well as a regulatory requirement from the EU. This increasingly applies across the life-cycle of a project from planning, permitting, and financing, through to construction, leasing, property and facility management and an exit strategy.

Essentially, the real estate and related industries will need to continually

and potential net-zero strategies is a positive direction. These issues are becoming central to almost every stakeholder in the real estate market. Additionally, while social factors have always been part of these certifications, they are now gaining more focus and addressing the most relevant issues. I think it is crucial for various stakeholders to understand these certifications better and demand the implementation of the most sustainable features.

Norbert Szircsák

Head of ESG advisory services Colliers Hungary

From my perspective as a sustainability manager, the development process for “A”-category office buildings is on a sustainable path, largely due to market expectations, but there remains significant room for improvement. The key issue is the lack of balance among environmental responsibility, economic viability, and social impact. Basically, and naturally, when investors must make decisions, economic viability tends to outweigh the other two factors. Another challenge I see is the need for strategic thinking and integrated planning. In speculative developments, where the developer intends to sell the building, operational performance often does not receive the attention it deserves. However, strategic thinking could benefit all stakeholders: future owners, occupiers, and facility managers, by reducing operating costs through smart technologies, creating healthier spaces, and

adapt their fundamentals in accordance with these ever more comprehensive ESG requirements. How costs are divided between the various stakeholders is an issue that needs to be faced. However, analysts the Budapest Business Journal spoke with argue that ESG-compliant projects benefit all financially in the longer term.

ultimately increasing property values. Investors and developers should also focus on life-cycle costs rather than just initial capital expenses.

Henrietta Budai Sustainability manager CPI Hungary

The EU Taxonomy is likely to drive more sustainable architecture and urban development by setting clear standards for what qualifies as sustainable economic activity. It will influence developers to prioritize green building practices and energy-efficient designs. The taxonomy aims to provide a classification system for sustainable economic activities that can contribute to the EU’s goal of climate neutrality by 2050. The classification system is designed to help all property market actors contribute to the EU’s long-term climate goals, in which cities have a crucial role to play. The EU Taxonomy system can help cities identify sustainable economic activities that reduce their carbon footprint and contribute to their sustainable development goals. The key steps that cities need to take are decarbonizing energy systems (transitioning to renewable energy sources, such as wind, solar and geothermal to reduce their dependence on fossil fuels), investing in energyefficient buildings, promoting low carbon transportation (for example, bicycle roads, pedestrian areas), preserving green spaces and promoting urban agriculture.

Viktória Molnár Senior associate DLA Piper Hungary

The increasing pressure of ESG expectations is creating a “double bind” for property owners. On the financing side, banks, funds, and financial investors are imposing stricter conditions, and in time, non-ESG-compliant developments may become unfinanceable. On the demand side, tenant and buyer expectations have shifted towards ESG. Consequently, a time will come when it will be impossible to finance, sell, or rent a building without it meeting ESG requirements. This will accelerate the renovation schedule, improving the quality of life for city residents and workers. ESG investments impose substantial costs on market players in the short term. The renovation and retrofitting of properties to meet energy-efficiency and ESG standards require significant investments that tenants, owners, and buyers are often reluctant to make due to economic rationales. Consequently, EU-wide regulations are needed to expedite this process by mandating specific requirements and, more crucially, measures to curtail environmental damage.

Tibor Ruzsinszki

Head of asset and property management, Gránit Alapkezelő Zrt. CEO of Grandum Property Management

A high level of green building certification has become a requirement for industrial properties in recent years, and high certification levels are an advantage for attracting international tenants. ESG reporting requirements have also naturally emerged for our tenants, and one of their key ESG requirements is now the need to receive ESG data for their own reporting purposes. From a sustainability perspective, the positive outcome of the energy crisis has been that the vast majority of building occupiers have shifted to much more energy efficient operations, for which they have much better opportunities in a newer, smarter building. The provision of renewable energy through local production, for example solar panels or even green electricity contracts, is also a daily topic in negotiations. In general, it can be said that sustainability

GARY J. MORRELL

Norbert Schőmer

Henrietta Budai

Viktória Molnár

Tibor Ruzsinszki

Anna Bencze

Norbert Szircsák

needs related to day-to-day operations are in the foreground, but we are also increasingly seeing more demands [originating] from tenants’ own corporate ESG strategies.

Anna Bencze Head of sustainability HelloParks

Improving green building certification systems requires a comprehensive approach that addresses the various stages of a building’s life-cycle, from planning and construction to operation and maintenance. In the CEE region, sustainability systems should be extended to residential, healthcare, education, retail, and hospitality sectors to promote broader environmental benefits, enhance the quality of life, and ensure comprehensive sustainability across various types of buildings and community spaces. While additional ESG costs can pose challenges, they often lead to long-term savings, enhanced asset value, and reduced risks. Initial investments in ESG development are outweighed by

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benefits such as increased investor interest, tenant demand, and regulatory compliance, making ESG development a worthwhile endeavor, despite the upfront costs.

Zsombor Barta

Ambassador Hungarian Green Building Council (HuGBC)

Sustainability systems should be extended to schools, healthcare institutions, sport facilities and all places that a large number of people visit. The residential sector could also be a game changer. In 2024 the International Well Building Institute launched the Well for Residential program with 25 pilot participants and nearly 30,000 enrolled homes. The Well for Residential program, informed by the evidencebased principles of the Well Building Standard and its 10 Well concepts, offers more than 100 strategies to create homes that prioritize resident health, comfort and well-being. Designed to empower builders and developers, operators, architects and designers and homeowners,

the new health leadership framework is applicable to both single family homes and residences within multifamily buildings.

Regina Kurucz

Sustainability consultant

Rewell Consulting

The real estate industry has a lot to do in terms of implementing the principles of sustainable development. Buildings account for 39% of global emissions, therefore it gives a huge opportunity to reduce this. First of all, the construction process should be viewed holistically in terms of the possibility of implementing the principles of sustainable developmentstarting from the selection of the plot for investment, the selection of the leading and accompanying functions, construction and finishing materials, the method of construction, up to the configuration of the building and providing instructions to the users on how to use the facility in the most optimal way. Only joint actions of the investor, designer, contractor and user, based on shared values of supporting the planet,

bring the most beneficial solutions. This requires trust and dialogue between stakeholders from the earliest possible stage of implementation.

Veronika Themerson Center of Excellence director, Environment, Skanska CEE

A green lease is a long-term agreement focused on sustainability, outlining the shared responsibilities of both the tenant and landlord. It covers areas such as ecofriendly building management, energy-efficient operations, waste reduction, re-cycling, and the use of non-hazardous materials – all aimed at lowering the carbon footprint of both the tenant and the building. Landlords have already been motivated to create energy-efficient and sustainable buildings to meet market demands. On the building’s side, the landlord engages to operate the building in an environmentally friendly and efficient way. The goal of the parties is to jointly reduce the carbon footprint of the building through their operations, to which they also commit in writing in a greenlease.

Anita Hancz MRICS Sales director for offices, Wing

Zsombor Barta

Veronika Themerson

Regina Kurucz

Anita Hancz

The Hungarian Forestry Firm Working to Restore Soil, Spread Carbon Credits

For the past year and a half, climate policy consultant Viktor Jósa has been contributing to the sustainable business development of industrial timber producer Silvanus Forestry. The Budapest Business Journal spoke with Jósa about the company’s carbon projects and consulted with James Atkins, co-founder of Vertis Environmental Finance, to learn more about how these schemes work and their limitations in helping achieve sustainable outcomes.

ideal for high-quality industrial timber output. Under new stewardship, Silvanus was now looking to incorporate a more environmental approach to the business.

“This friend of mine asked me if I wanted to come and build the sustainability branch of the business so that it’s not only the industrial wood output, and it’s not only the sales of seedlings and saplings, but also developing carbon projects, and developing partnerships for the climate,” Jósa recalls.

While the core of Silvanus’ business remains selling trees, Jósa describes carbon projects as “selling these selectively-bred trees and the growing technology to landowners, municipalities, to carbon project developers who turn these forests into carbon projects and then market the carbon credits resulting from them.”

year. To emit any pollutants, a company must receive a certificate called an allowance, the total number of which are being reduced every year.

“It’s literally about a whole population of industries in aggregate reducing their emissions over time,” Atkins underscores.

“The other type of thing is carbon credit,” Atkins continued. “And when you talk about carbon credits, that is where someone does a project in a developing country [….]. They plant some trees, or they change a farming practice, and that reduces emissions.”

Another company, which could be anywhere in the world, can buy the carbon credits generated by the project, effectively subsidizing it to offset its own emissions.

“This has been changing through [….] a lot stricter standards, [and] more rigorous processes,” on behalf of standard-bearing carbon credit certification companies, Jósa says.

Competing Crises

Notwithstanding the effectiveness of carbon emission reduction projects, Atkins also pointed out what he sees as a higher-level issue with Silvanus’ approach.

“We’ve got a climate crisis, and we’ve got a biodiversity crisis,” Atkins argues. “Every bit of land that we use in an engineered way is making the biodiversity crisis even worse.”

As he understands it, a “plantation is engineered forestry.” This practice of “planting things of one species in a row,” known as monoculture, “isn’t good for biodiversity and wildlife at all,” Atkins insists.

“We can make plans […], but today’s and yesterday’s knowledge and […] techniques will likely not work tomorrow due to climate change, due to [the] degradation of land, due to migrating species, migrating pests. This is where our technology really comes into play, using varieties that can better withstand these foreseeable impacts.”

“We’ve all learned through better environmental awareness that monocultures are not ideal,” Jósa responds. “I think the major negative side of monocultures in this regard is the degradation of the land being used [for] single crops.”

Jósa was an undergraduate classmate of your correspondent at McDaniel College here in Budapest. He went on to pursue a master’s degree in environment and resource management at VU Amsterdam before getting internships at the United Nations and the World Health Organization and then working at a few NGOs in Western Europe. Just before the pandemic, he decided to strike out on his own as a consultant and returned to Budapest.

At a college reunion a few months ago, I caught up with Jósa, who related several of his most recent projects. One that stood out was his work with Silvanus.

“I was talking to a childhood friend of mine who recently took over a family business, Silvanus Forestry,” Jósa said at the time. The company has been operating for more than 30 years, crossbreeding tree varieties to create a hybrid

But what are carbon credits exactly, and how do they work? To find out, I spoke with James Atkins, co-founder of Vertis Environmental Finance. Established in 1998, the company grew along with the practice of trading carbon credits, also known as emissions trading, to become one of the leading privately owned emissions trading companies in Europe.

Atkins says there are two different approaches to the business. “You’ve got to make a distinction [.…] between emission trading schemes that are about forcing everyone involved to reduce their emissions, and emission trading schemes that are about compensating emissions for reductions.”

Fixed Limits

In the former case, think of the European Union setting a fixed limit on the pollution companies are allowed to emit in a given

Over his several decades in the industry, Atkins has naturally developed a healthy skepticism of certain approaches to sustainability. For instance, he was quick to point out how flawed carbon credit projects can be.

“There’ve been lots of scandals where people who develop emission reduction projects in different countries [.…] might have planted a forest or said they planted a forest, but they hadn’t really planted it, or it hadn’t grown properly, or it burnt down or got ill,” Atkins cautions. Jósa acknowledges the challenge.

“We all know that there have been many problems with these carbon credit projects in developing countries,” he says, citing similar issues of lackluster forest growth or maintenance and substandard project monitoring. But rules are gradually tightening.

Jósa points out that Silvanus does not recommend using its trees on sites where a natural forest could thrive “because our application will never out-compete, and it shouldn’t ever out-compete a natural forest.” Rather, Silvanus’ trees “are really meant for utilization of degraded lands.”

Rather than trying to recreate a natural environment, Silvanus’ trees could help restore degraded soil so that it could be used for that purpose again someday, Jósa says.

“There is this factor when it comes to land use, which really influences everything you do, and it’s called climate change,” Jósa notes.

“And so, we are finding ourselves in a situation where we can make plans [….] but today’s and yesterday’s knowledge and today’s and yesterday’s techniques will likely not work tomorrow due to climate change, due to [the] degradation of land, due to migrating species, migrating pests. This is where our technology really comes into play, using varieties that can better withstand these foreseeable impacts.”

NICHOLAS PONGRATZ

Photo by dee karen / Shutterstock.com

Plot Location is Critical to Improving our Cities

Developers, planners and architects must build according to ESG market needs, EU Taxonomy and city planning regulations. For Budapest, there is the need to preserve its turn-of-the-century Central European look and atmosphere, delivering projects that enhance its roles as a business center and tourist destination. Simultaneously, it must develop as a modern city and a healthy place to live.

GARY J. MORRELL

“Locational issues and transportation systems are central to ESG in real estate as they influence accessibility, reduce carbon footprints, and impact overall urban sustainability. Efficient transportation and strategic location choices enhance connectivity, reduce reliance on cars, and support greener, more livable cities,” comments Zsombor Barta, ambassador to the Hungarian Green Building Council (HuGBC).

Modern office staff, who often work flexible hours, prefer to be located in areas well integrated into the city so they can utilize local amenities and commute quickly and safely on public transport, for example, or by bicycle.

“People are more aware that traveling time is valuable and can be used for mindfulness, relaxation or physical activity. Staff require clean and reliable public transportation and convenient and pleasant storage of means of active transportation, showers and changing rooms,” says Regina Kurucz, a sustainability consultant and Well assessor.

An excellent example of the centrality of location and access is the BudaPart suburban waterside development by Property Market on a 54-hectare site on the southern Buda bank of the Danube at Kopaszi Gát. The project includes office, retail, hotel, leisure and residential elements and large park areas. It is developing a new city quarter based on the 15-minute neighborhood concept, whereby a person can access all basic day-to-day needs within a 15-minute walk.

“A building that is easily accessible by public transportation and offers electric vehicle charging stations, as well as other e-mobility options, has a much smaller environmental footprint in terms of transportation,” he points out.

Bringing Back Buildings

Another development option is the redevelopment and renovation of existing buildings, notably in the historic Central Business District, where there is a scarcity of building plots but a number of listed buildings in need of renovation.

A prime recent example comes from Europa Capital, which has redeveloped the

12,500 sqm

Academia office center in partnership with ConvergenCE as the asset manager, undertaking extensive renovations that target Breeam and Well accreditation.

The BudaPart development on the southern Buda bank of the Danube at Kopaszi Gát includes office, retail, hotel, leisure and residential elements and large park areas. A person can access all basic day-to-day needs within a 15-minute walk.

Location has always been a critical aspect of sustainability, comments Norbert Szircsák, head of ESG advisory services at Colliers Hungary.

“Commuting to a building can significantly impact its carbon footprint, so good public transportation options, amenities for cyclists, and the availability of electric car chargers are all crucial for reducing negative effects,” he notes.

“We now see many developers discussing the concept of 15-minute cities, where nearby amenities like childcare, shopping, and sports facilities can significantly reduce the carbon footprint of a neighborhood,” Szircsák adds.

Sustainable Mindset

International developer Atenor says it tries to focus on sustainability issues long before assessing the accreditation opportunities of a project.

“We start with a mindset on sustainability, thus intend to select brownfield, inner-city sites with existing infrastructure, where we can substantially upgrade the urban environment,” says Norbert Schőmer, the country manager at Atenor Hungary.

“I think we need a greater focus on cooperation in improving and maintaining public spaces. In all Atenor projects, we intend to create public spaces that can

be visited and used by local residents and the wider community. Generally, we have great cooperation with local municipalities; however, their limited budgets often force them into ESG destructive decisions, such as enhancing inner city public parking,” he adds.

Skanska makes the point that the location of a building is of great importance for its function. For example, for an office building, a central location with access to a wide range of public transport options helps to significantly reduce the use of private cars on the commute to work.

“When examining the impact of a property on the environment, one cannot limit oneself only to the boundaries of the property; this element related to the carbon footprint caused by the commuting of users is also important when we talk about investments supporting sustainable development,” the developer says.

“One of the key aspects of environmental accreditation systems is the accessibility of public transportation and the use of electric vehicles. Prioritizing both of these modes significantly reduces the environmental impact of transport, both in terms of emissions and noise pollution,” comments Tibor Ruzsinszki, head of asset and property management at Gránit Alapkezelő Zrt.

“ESG requirements are mainly tenantled, and we designed the Academia project based on ESG principles using the Hungarian architects BuildEXT. This is located in the CBD, where there are few developments for new build projects. We do not undertake the development of new buildings from the ground up but focus on value-added development of existing buildings that require refurbishment,” says Csaba Zeley, managing director of ConvergenCE.

Regarding the influence that the EU Taxonomy is having on architecture and urban development, Barta of HuGBC argues that regulatory compliance is encouraging cities to align local regulations with EU Taxonomy standards, promoting uniformity in sustainability practices across the EU.

Market competitiveness enhances the position of cities that prioritize sustainable development, attracting businesses and residents seeking environmentally responsible living and working environments. The expert argues that this improves overall urban quality of life through greener infrastructure, better air quality, and increased green spaces.

ESG issues in real estate impact the wider population and city environment by promoting sustainable building practices, improving air quality, and enhancing energy efficiency. They can improve quality of life by reducing environmental footprints, creating healthier living spaces, and fostering community wellbeing through green infrastructure and responsible development.

“These issues are critical to ESG as they affect energy consumption, emissions and access to amenities and services. In our experience, proximity to public transport and sustainable infrastructure enhances the environmental and social aspects of real estate projects, thereby increasing their market value,” concludes Tamás Balogh, a senior associate covering real estate matters at law firm DLA Piper.

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

fejlesztő Kft. (100)

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1083 Budapest, Bókay János utca 44–46. (70) 657-5698 kertesz.gabor@ iconrem.hu

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4 Socialite

Celebrating 110 Years of Hungarian Animation

Between Sep. 17 and 22, the seventh annual Budapest Classics Film Marathon will celebrate 110 years of Hungarian animation. I recently chatted with festival director György Ráduly, who really knows his stuff. In a 30-minute interview, his answers were so detailed I asked just three questions.

Macskássy had continued in animation. His “The Sport Contest in the Forest” and “The Diamond Half-Penny of the Little Rooster” were highly artistic but eyewateringly expensive propaganda. Hungary’s political rulers began to balk at the costs.

DAVID HOLZER

The first Hungarian animation, by István Kató-Kiszly, was made in 1914. Fast forward to the 1930s, and there was a dramatic rise in the number of Hungarian animation studios as artists such as László Moholy-Nagy and Sándor Bortnyik returned from studying abroad.

In the 1930s, advertising studio Coloriton led the way in Hungarian animation. Founded by Gyula Macskássy, János Halász and Félix Kassowitz, Coloriton made animated commercials to show in cinemas. With the Hungarian anti-Jewish laws of the 1930s, everything changed for Coloriton. Halász left for England where, in 1954, with his wife Joy Batchelor, he directed a chilling animated feature based on George Orwell’s anti-totalitarian classic “Animal Farm.” Félix Kassowitz, who was Jewish, was sentenced to forced labor before being deported from Hungary with his wife in 1943. He returned after World War II but not to animation.

The third member of the trio, Macskássy, was to have a significant influence on the history of Hungarian animation.

In the 1950s, animation found favor with the country’s communist leaders, who realized its propaganda potential and created a Hungarian school of animation.

Devoted to animation as an art form, Macskássy came up with an ingenious idea. He proposed to the communists that animation be funded by making commercials for Hungarian and foreign companies.

“Hugo the Hippo” was a 1975 co-production of Pannónia Filmstúdió and Brut Productions (a division of French perfume company Faberge) in the United States.

Commercial Cuts

As Ráduly put it, “He had the smart idea to create longer animated films and cut them to use as commercials for clients.”

For example, the 20-minute “The Mouse and the Lion” was edited down into a two-minute commercial for toothpaste, which had the mouse showing the lion how sharp his teeth are because he brushes them nightly. “The Greedy Bee,”

about a bee hungry for honey, became a one-minute commercial for, yep, honey.

“Thanks to Macskássy’s genius, the public was able to see wonderful animated features funded by the commercial side,” Ráduly says.

“In 1958, Macskássy founded the Pannónia Filmstúdió, and in the 1960s, ’70s and ’80s, Hungary produced an incredible quantity and quality of feature animations, TV series, short animations and international co-productions such as “Hugo the Hippo” (1975) with the Americans, or 1982’s “Masters of Time,” a French co-production directed by René Laloux. We’ll be showing restored versions of these classics at the festival,” Ráduly notes.

Hungarian artists of all stripes have punched above their weight, so I shouldn’t have been surprised when Ráduly listed the animators from this country who have impacted the global scene. But I was. I could picture Ráduly rubbing his hands with glee as he took a deep breath and began to enumerate the Hungarians who influenced world animation. Here are just three of the examples he gave me.

Emigrating to the United States from Hungary at the start of the 20th century, Margaret Winkler founded her own animation production company in 1921 to distribute the hugely popular “Felix the Cat” cartoons. She would go on to launch Walt Disney’s career and become the first female member of the Motion Producer’s Guild.

In 1933, Béla Gáspár invented Gasparcolor in Berlin. This used a threecolor process on one strip of film and was behind some of the most innovative animations of the period, including Len Lye’s great “Rainbow Dance.” Gasparcolor was later sold to Technicolor.

Years later, Pannónia animator Zoltán Maros would find success in France. He’s best known for working on the Asterix cartoons and being the lead animator on “Hercules” (1997), “The Hunchback of Notre Dame” (1996) and “A Goofy Movie” (1995).

Bringing things up to date, Kecskemétfilm recently did all the animation for “The Most Precious of Cargoes,” the latest feature by French director Michel Hazanavicius.

The Fall of Communism

Pannónia entered the 1980s riding high. Its biggest client was Hungarian Television, for which it made the hugely popular “Gusztáv,” aka “Gustavus,” and “Vuk” or “The Little Fox” series dubbed into French, Spanish, Italian and English. However, the collapse of communism in 1989 meant Hungarian TV stopped commissioning animation, causing a financial crisis at Pannónia.

The 1990s saw the rise of small, flexible and dynamic Hungarian studios, following the European trend. Successful studios worked for foreign companies.

For instance, Budapest’s Varga Film Studio’s production showreel includes the “Mr. Bean” animated series for the United Kingdom. Pécs Film Studios in the city of the same name made commercials for Red Bull energy drink.

In parallel with studios looking for clients outside Hungary, the country’s animation scene became more focused on the artistic aspect. “The MoholyNagy University of Art on the Buda side is today the most active incubator for Hungarian animation. Today, it’s more talent- than industry-focused. The NFI FilmLab also has an active animation department,” Ráduly says.

I ended by asking Ráduly why he thought Hungary was so influential in the animation industry.

“From the earliest days of cinema, we’ve jumped into the middle of the action,” he said. “It’s probably also a question of culture. As part of the Austro-Hungarian Empire, we were a bastion of culture with a strong emphasis on theater. This gave us a tradition of telling stories using pictures. This is my humble point of view.”

To find out what’s on offer at the Budapest Classics Film Marathon, head for filmmaraton.hu/en. There’s a promotional video on YouTube in Hungarian with English subtitles. The Budapesti Klasszikus Film Maraton 2024 also has its own YouTube channel.

Photo by Benedek György

György Ráduly

Dániel Franczia, Veszprém’s Master of the Egyptian ‘Goblet Drum’

Unnoticed by many attending the “headline” acts during Veszprém’s year as European Capital of Culture in 2023, Dániel Franczia and his “Joy Drumming” continue to bring delight and comfort to young and old alike.

Until his early 20s, Dániel Franczia vacillated between music and drama, unable to decide on his life’s course.

Franczia, who turned 38 this year, gives credit for his love of music in general, and drums in particular, to his mentors at elementary school in his childhood home city of Győr (120 km west of Budapest by road).

“The school had a special focus on music, and I had fantastic teachers who taught me classical drums, percussion and other instruments,” he tells the Budapest Business Journal

However, growing up, he struggled to divide his time between general studies and his two great loves, music and acting. Ultimately, music won out, primarily because of the darbuka, the iconic “goblet drum” used by folk musicians in the Middle East and Balkans.

“I loved [the Hungarian band] Besh o droM, who play authentic Gypsy, Balkan and Macedonian music. The drummer, Ádám Pettik, was playing an Egyptian drum. I saw how beautiful this drum was, and I just loved the sound,” he says.

Serendipity also played a role:

“My very first darbuka was a Turkishtype instrument. I received it to have something to practice on. I was playing congas in a band, and the band leader gave it to me. He didn’t even know exactly what it was,” he recalls.

Franczia was in his first year studying Hungarian literature and ethics at Veszprém University (120 km southwest of Budapest), and he initially began teaching himself to play by copying Pettik’s style, holding the drum between his legs.

But digging deeper and researching the instrument online, he soon realized native Middle Eastern musicians hold the instrument to the side, under one arm.

“Looking on YouTube, I saw the way the Turks and Arabs play, and I realized it offered far more potential. The better hand gives the base rhythm, and the other hand gives the melody, the ‘color’ to the music. From an anatomical point of view, you can’t do this by holding

Culture Matters

A regular look at culture issues in Hungary and the region

the drum between your legs. I had to forget the way I was playing and relearn how to play,” he recalls. He also began to wonder if he could help make the instrument popular in Hungary.

“It’s not taught here in any institutional way, and even in the Middle East, if you want to study drumming, you have to visit a master, privately, to learn,” Franczia says.

From Student to Teacher

Practicing hard daily, he eventually “plucked up courage” and began teaching students motivated by his enthusiasm and the thrill of exotic drumming. Franczia employed skills learned when teaching drama to enhance the learning process.

“I started to transfer these practices into music teaching. In effect, I invented these ways of teaching music,” he says. By 2014, confident that he could make a career from his passion alone, he resigned from his day job teaching literature at a state school to begin the very uncertain life of a freelance music teacher.

“My goal was to speak about music so that the love of music should reach more people,” he recalls. Franczia worked hard in the next few years to build relationships with agencies, schools and institutions, but it was not easy to make a living.

“I had to fight hard to achieve anything,” he says. Then, in

2021,

the European Capital of Culture team invited him to apply for the so-called Hangjáték program, designed to involve people in music at the grass-roots level.

“The mere fact that I came into the minds of the decision-makers gave me an awful lot of opportunities, and from that point on, a program kicked off that lasted not only for one year but for three,” he says. “Moreover, this was the very first occasion when I felt I did not have to struggle for some financial income, and I could focus on what I like to do.”

Given a free hand by the organizers, Franczia began holding what he dubs “Joy Drumming” workshops free every week. Typically attracting 10 to 30 people from all ages and backgrounds, they come together to learn simple drumming techniques or basic conducting exercises in hour-long sessions.

“There were no prior requirements. Students came after lessons, single boys and girls came in after work, families, grandparents, sometimes with grandchildren, or alone. Some people came in straight from the factory to participate in making music,” he says.

While he admits that “not so many” foreign tourists attended during the ECoC year, Joy Drumming attracted a good number of foreign Erasmus students from what is now called Pannon University in Veszprém.

Mental Health

Franczia is wary of using the word “therapy” concerning his teaching but says sessions have proved many times to have “a very positive effect on mental hygiene. [.…] I strongly believe that it’s not only about playing music but of making your life complete,” he explains.

“Some people lack things in life, and music can help fill in these gaps in their lives [...] to discover another

world, to have your own personal experience and be a part of [the] music. Looking at other people playing music does not fulfill this demand. It’s not enough just to listen and see other people playing,” he declares.

Though the Hangjáték program finished with the end of Veszprém’s ECoC program in December last year, Franczia continues to teach and lead workshops, with a good sprinkling of his students initially attracted by the “Joy Drumming” sessions attending.

László Fodor, who lives in the village of Felsőörs, just to the south of Veszprém, attests to the positive effects of Franczia’s work and methods.

“I regularly took part in Franczia Dani’s ‘joy’ sessions. He can speak so easily and naturally to all age groups, from small children to my kind of 60-year-olds. It’s liberating because it brings out the best in you, even without any musical knowledge,” Fodor told the BBJ

He also highlighted Franczia’s “infinite patience,” adding, “Whenever you make a mistake, and I did a few times, he will just praise you. He is a very kind person, a wonderful teacher,” Fodor says.

Indeed, contrary to the general educational culture in Hungary, allowing people to make errors is central to Franczia’s educational philosophy.

“People look at me as if they’d never heard before that they were free to make mistakes. I encourage them to make mistakes, at least now! Feel free!” he says, adding: “There will be absolutely no consequences here if you make mistakes.”

KESTER EDDY

Dániel Franczia

Chamber of Commerce Corner

This regular section of the Budapest Business Journal features news and events from various international business chambers. For further information and to register for specific events, visit the organizing chamber’s website. If you have information for inclusion on this page, send an email in English to Annamária Bálint at annamaria.balint@bbj.hu

German-Hungarian Chamber of Industry and Commerce (DUIHK)

On Aug. 29, more than 150 representatives of the German-Hungarian business community met at the DUIHK’s “Back-to-Work Cocktail” networking event in the residence of the German Embassy in Budapest to start the second half of the year in a relaxed atmosphere.

Ambassador Julia Gross praised the “success story of the DUIHK in Hungary” over the last 30 years, while managing director Barbara Zollmann emphasized the positive and intensive cooperation between the chamber and the embassy. Together, they set the mood for the weeks and months ahead, including the upcoming second “Jour Fixe” of the year at the W Budapest Hotel and the next “CEO Breakfast Briefing” on the interfaces between civil and defense innovations. Accompanied by a live band and a standing buffet, the garden of the residence provided the ideal backdrop for exchanging information, maintaining contacts and recharging batteries for the busy months ahead.

Swiss-Hungarian Chamber of Commerce (Swisscham)

On Aug. 27, Swisscham kicked off the season with the second episode of the Holinstinct webinar series on Strategies for Maintaining Mental Fitness. Experts talked about connecting mental and physical health with holistic methods for maintaining mental fitness, including cognitive recalibration and mindful presence. Guests learned about effective health techniques that help maintain freshness and flexibility in the face of everyday challenges. Join us on our upcoming SwissHungarian Business Talks in Kecskemét

this month. This year’s focus is “Switzerland and Hungary: Partners for Social and Economic Sustainability in Europe, Vocational Training, Sustainability, Innovation and the Swiss-Hungarian Cooperation Program.” Expect in-depth presentations, panel discussions, networking and a factory visit.

• When: Thursday, Sep. 11, 9:30 a.m.-2 p.m.,

• Where: Neumann János Egyetem, Izsáki út 10, Kecskemét 6000. • Fee: Free to members but subject to registration

Canadian Chamber of Commerce in Hungary (CCCH)

The CCCH is pleased to announce its 30th annual Budapest Lobster Night. This prestigious fall event on Saturday, Nov. 16, has become a hallmark of the chamber’s calendar, celebrating three decades of camaraderie, culinary excellence and community. Guests are treated to a sumptuous lobster dinner, fine wines and pleasant company. Over the years, Lobster Night has earned a reputation for immaculate organization and a lively atmosphere, making it a must-attend event for members and partners alike. In addition to the Budapest celebrations, the CCCH will also host its second annual Lobster Dinner in Szeged on Friday, Nov. 15. Although a relatively new addition to the event calendar, it has quickly become a much-appreciated tradition in the region. The evening promises the same high-quality cuisine and hospitality that guests have come to expect from its older brother in Budapest. Both dinners offer an unparalleled opportunity to network with fellow members and celebrate the enduring spirit of the CanadianHungarian business community.

Netherlands-Hungarian Chamber of Commerce (Dutcham)

Dutcham invites guests to its fall networking lunch. More details to follow. • When: Thursday, Sep. 26, noon-2 p.m., • Where: DNB Restaurant, Budapest Marriott Hotel, Duna-Korzó, 1052 Budapest

Belgian Business Club (Belgabiz)

Belgabiz invited guests to kick off the season at its “Back to Business” networking event on Thursday, Sep. 5, from 6:30 p.m. at the Mabelle Bistro in Three Corners Avenue Hotel, with “a touch of Belgian hospitality.” Enjoying a brandnew chic setting, guests were able to experience a wide selection of Belgian beers, fine Hungarian wines, gin and tonics, and delicious non-alcoholic refreshments, Belgian beer bites, Hungarian delicacies, and Belgian sweets complemented the drinks.

British Chamber of Commerce in Hungary (BCCH)

The BCCH will be holding its fifth CEO Dinner of 2024 on Sep. 17, with Olivér Csendes, CEO of Visit Hungary Zrt., the guest of honor. Visit Hungary is the national tourism marketing agency of Hungary, operating as part of the National Tourism Agency. As such, it plays a pivotal role in the nation’s tourism industry. With an Oxford MBA and extensive experience in strategic business consulting, corporate management in multinational corporations, entrepreneurship and innovation ecosystem building, Csendes is a relatively recent arrival at the helm of Visit Hungary, having switched from being the leader of the innovation department at the Austrian National Tourist Office. He aims to strengthen Visit Hungary further through successful teamwork, data-driven management, and a growth mindset, making it Europe’s leading tourism marketing organization. The event includes a threecourse dinner with wine and welcome drinks. British Ambassador to Hungary Paul Fox and BCCH chairman Duncan Graham will also make opening remarks at the event. • When: Tuesday, Sep. 17, 6-8 p.m. • Where: Matild Palace Hotel, Váci u. 36, Budapest 1056 • Fee: Members, HUF 28,000 (plus VAT); non-members, HUF 38,000 (plus VAT)

Hungarian-French Chamber of Commerce and Industry (CCIFH)

A regular series of economic trends and news presented in English by the experts of the six Franco-bilateral chambers of commerce and industry from Central and Eastern Europe (Czech Republic, Hungary, Poland, Romania, Serbia, and Slovakia) continues with a free Zoom webinar presenting a tour of the CEE in 45 minutes.

• When: Monday, Sep. 16, noon-1 p.m. • Where: Online • Fee: Participation is free, but prior registration is required on info@ ccifrance-hongrie.org

Italian

Chamber of Commerce for Hungary (CCIU)

This month, Budapest will host the Ga.Ma Beauty event at the Marriott Hotel organized in collaboration with the renowned Italian brand Fitomediterranea. This event represents a significant moment for showcasing the ongoing success and innovation of the Italian cosmetics industry on the international stage. Celebrated for its high-quality and sustainable products, the Italian cosmetics sector is experiencing remarkable growth

in global exports. Key markets such as China, the Middle East, and the United States are seeing an increasing influx of Italian beauty products, reflecting the industry’s reputation for excellence and commitment to environmentally friendly practices. Fitomediterranea, renowned for its natural and eco-conscious cosmetics, exemplifies how Italian brands are meeting the global demand for sustainability and premium quality.

• When: Tuesday, Sep. 17, 6-8 p.m.

• Where: Pullman Budapest Hotel, Nagymező utca 38, Budapest 1065

• Fee: Members HUF 16,500 (+ VAT / pers); non-membres, HUF 24,500 (+ VAT / pers).

French Chamber Business Breakfast: Francophone Business Radar. Is it better to work in a French company in Hungary? Discover the employer branding perception of French companies in Hungary.

The fall season opening reception and new members’ presentation networking event will include an English and Hungarian language guided tour of the newly opened Pullman Budapest Hotel.

• When: Tuesday, Sep. 24, 9-11 a.m. • Where: Randstad Budapest, Dózsa György út 146-148, Budapest 1134 • Fee: Members HUF 8,900 (+ VAT / pers); non-membres, HUF 13,400 (+ VAT / pers).

This partnership not only highlights the value of Italian craftsmanship but also demonstrates its alignment with the worldwide shift towards natural and sustainable beauty solutions. The event in Budapest will not only celebrate the achievements of the Italian cosmetics industry but will also serve as an opportunity for dialogue and networking between the Hungarian and Italian business communities. • When: Tuesday, Sep. 17 • Where: Budapest Marriott Hotel, Apaczai

Janos U. 4, Budapest 1052

Csere