The summer started with a professional event at Lake Balaton. Experts in the property and facility market discussed the current situation of the Hungarian economy and the real estate market at Portfolio’s Property X conference. Growing global tensions, efforts to combat climate change, and the state of digitalization in the domestic real estate market were focal points of the two-day event.
Economy – Cautious optimism
At Portfolio’s Property X Conference last week, experts discussed questions like: What will the Hungarian economy and the real estate market face in the coming years? Is it worth investing in real estate? – as Fmbusiness.hu reports.
In just over the past one and a half years several events have fundamentally shaken the Hungarian economy: rising energy prices, raw material shortages and supply-chain difficulties, rising global food prices and a war. Although experts are optimistic about the growth they are advocating careful business planning.
In terms of investments, the turnover in Hungary is stagnant at around 1.1 billion euros, and there is no V-shaped rebound. However, the decline in volumes is already perceptible in the investment market, at the end of this year it may already be noticeable in prices. Experts believe that while yields in the industrial segment are expected to fall, the office market is more likely to rise. In general, professionals agree, that the market players need to be flexible and think long-term, motivated by the issue of sustainability, rising commodity prices and inflation. That is why developments are expected to slow down and the volume to fall.
Sustainability – actions speak louder than further discussions
Energy and building management, ESG and war were also the main topics examined from the perspective of climate change. Csaba Szij, Deputy CEO of B+N Referencia Zrt. took part in an interesting discussion in the energy and facility management panel.
Experts agreed that although the recent rise in energy prices has placed an additional burden on tenants, this is expected to lead to a shift towards more sustainable solutions. Regarding green solutions, there was also talk of the central bank’s responsibility to steer the financial system in a more sustainable direction, but also of the lack of ESG in education.
The situation of war and climate policy was also discussed in a separate panel, where participants highlighted that although similar crises always allow us to change and move in a more sustainable direction, there is always a setback before the situation improves. Experts agreed that instead of further agreements and discussions, immediate actions are needed.
Digitization – Hungary is lagging behind
During the panel discussion on proptech and digitalisation, there was a consensus that Hungary is still lagging behind on this issue. The reason might be a complete lack of capital and new services in the uptake market. But tech startups are also struggling because many companies are expecting reference jobs or the software to be already widespread. The topic of BIM also rose, pointing out that the state as the largest customer, could trigger the process.
Future office – Digital work environment to re-design the market
With the proliferation of hybrid work, offices are expected to function as more than just a classic workspace. Offices now have to compete with employees’ living rooms. There are still big changes to be expected in the next few years, with some saying 1 million sqm of office space could become redundant. That is why the current investments (300-400 thousand sqm of office space) are likely to be completed, but the developments planned may be realized slower.