Gergely Árendás - CEE real estate has come a long way

Gergely Árendás, managing director of Property Market Real Estate Development, shares his insights on CEE real estate.

March 28, 2019Real Estate
Gergely Árendás, managing director of Property Market Real Estate Development - developer of the 54 hectare mixed-use BudaPart project on the banks of the River Danube in Hungary’s capital, Budapest - advises that local knowledge is vital when investing in the CEE region. He sees the changing face of retail as a huge challenge for property, with the focus shifting from the physical location of sales transactions to experience and meeting points. He notes how the rapid rise of flexible office solutions providers has brought impetus to the office market, although some landlords may be vulnerable in a downturn.

If you could give one piece of advice to investors wishing to break into CEE/SEE markets, what would it be?
Take your time to get to know your particular market. Get to know who the local players are and also the investors who have been active on the market.  Although some investors treat this as a region, there really are huge differences country by country.

What was the most interesting/challenging CEE/SEE project you participated in?
The one I am currently engaged in. We are developing BudaPart, the largest mixed use scheme located in South Buda at the bank of the Danube. BudaPart will be a dense mix of residential and office projects. It also includes MOL Campus, which will be the highest building in Budapest and the first to be designed by Foster and Partners. Currently, six projects are under construction with a total gross area exceeding 200,000 square metres. 

Which real estate debates/trends are on your agenda these days?
I think the changing face of retail is an important topic, both in relation to the high street, as well as shopping centres.  These trends are strongest in the US and UK, but will have an effect on continental Europe as well. There are huge challenges bringing new life and functions to these properties with the focus shifting from the physical location of sales transactions to experiences and meeting points.

How do you see the long-term future of CEE/SEE real estate?
CEE economies are forecasted to continue to outperform mature European economies in the next years. The real estate market has come a long way since its inception in the region and now offers a wide variety of products. All this makes CEE an attractive destination to allocate capital, both for development and investment.

What deals, developments or strategies in the region have impressed you?
I think the quick emergence of big, flexible office solution providers brought extra impetus to the office markets, bringing in end-users who otherwise would not be able to use quality office space. I do wonder, however, whether some landlords are taking on too much of this type of space, which may leave them vulnerable in an eventual downturn.
 
This interview is one of a series being published on the GRI Hub following a qualitative survey by GRI Club of real estate market leaders across the CEE/SEE region.

Gergely Árendás will be participating in CEE GRI 2019 on 14-15 May in Warsaw, where CEE real estate markets will be discussed in further detail.