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REAL ESTATE review
LIMITED BUDAPEST SHOPPING CENTER PIPELINE Retail, along with hotel and hospitality, is seen by analysts as the most severely hit real estate market sector. Although hotel is expected to make a comeback, the retail sector is faced by the long-term challenge of the growing use of e-commerce. By Gary J. Morrell Hungary had been recording positive retail indicators as retail sales have been increasing steadily in recent years according to the Central Statistical Office (KSH). At the same time, Budapest shopping center development had been close to zero with developers wary of the longerterm level of consumer spending and increasing us of ecommerce. In spite of these concerns, retail has continued to attract investors with several Budapest schemes changing hands and a number of these centers are undergoing refurbishments and repositioning in recognition of changing demands from consumers with regard to tenant mix and design. Private consumption has been a major driver of economic growth and this has filtered through to the retail property market according to Cushman & Wakefield. “The change has been a restructuring on the retail market, and as a result, strengthening of other specific profiles and concepts, such as leisure or F&B,” comments the agency. It puts shopping center stock in Budapest at 770,000 sqm, with the pipeline represented by one sole major shopping center development. The major retail project under construction and destined to be
the first new shopping center in Budapest for several years, is the 55,000 sqm Etele Plaza by the Hungarian developer, Futureal, with a rescheduled handover of 2021. The complex has been designed by the Hungarian Paulinyi & Partners Zrt. and Dyer, a multi-award winning architectural and design practice with a legacy dating back to 1964, operating in the United Kingdom and internationally, with studios in Moscow and Budapest. It will include around 180 retail outlets located at a transport hub at the Kelenföld railway station, metro line 4 and the approach section of the M1-M7 motorways. In addition to the retail and service elements, the complex will include the phased, 65,000 sqm Budapest One Business Park. According to Futureal, the complex has 236,000 people within a 10-minute traveling distance and 500,000 plus within a 20-minute distance. A further 165,000 commuters are estimated to travel through the transport hub on a daily basis. GOING WELL “The project is going well and the remaining space is under negotiation. We are not pushing to close the remaining deals as there we have to do the fine tuning in terms of tenant mix,” says Tibor Tatár, commercial & retail development manager at Futureal Group, on the project.
The retail sector has had to adapt to changing consumer habits and preferences in the threat of e-commerce with regard to both new development and the redesign of existing retail projects. When it comes to design, rapidly changing consumer habits, the development of digital technology and the possible changes in the functions of buildings results in the creation of flexible and futureproof spaces according to István Vámossy, project designer of Paulinyi & Partners and co-designer of Etele Plaza. “We provide the background for development, transformation and even changes which cannot yet be anticipated,” he said. “Etele Plaza will be the first major scheme on the Budapest market having a strategic location since 2011, when KÖKI shopping center opened. The center will most likely affect the shopping center market in general, due to its overall size and planned fresh trade mix, which will not only focus on the latest, and most popular brands, but will also accommodate new profiles based on changed customer needs, such as a larger food court and restaurant area, and more leisure elements,” adds Cushman & Wakefield. JLL put total modern shopping center stock in Budapest at 720,000 sqm, which is low by European standards,
