With Property Investment Forum the autumn conference season launched in September. At the top conference of the Hungarian real estate industry, hundreds of professionals discussed current issues like market transformation, the state of the office stock, logistics and the credit market along the macroeconomic environment.
Experts calculate with serious market risks
Perhaps the most important topic for the FM and PM professionals was the state and prospects of the office market. Currently, the modern, BB and CC categories dominate the office stock in the capital, and the certifications operate more and more transparently. However, the speakers at the conference predicted fewer but high-quality developments in the near future. They agreed that the big boom is yet to come as the effects of covid, the fear of recession, the runaway inflation and the unpredictability of construction along with the war constitute serious market risks.
Operation is 70% of a building’s costs
Few people know that only 2-3% of a building’s costs are incurred by design and planning, 27-28% by construction, and the remaining 70% (!) is generated during operation. There are already several office buildings where the operating costs are the same as the rent.
Until 2008-2009, the real estate industry focused on construction and facilities management played a subordinate role. This has changed a lot since, and the current situation gave a decisive impetus to this attitude: the drastic increase in energy prices and other operating items are transforming the thinking of both tenants and developers.
Energy costs account for the largest part of operating costs
Among the elements of the operation of a building, the ratio of energy costs can be over 70%. In other words, it is not surprising that energy awareness plays an increasingly important role in tenants’ expectations. This represents a serious challenge – and also an opportunity – for builders and renovators, because, with the exception of the best quality properties, a large number of office buildings require comprehensive transformation and development.
For the time being, the energy in operation is still mainly provided by oil and natural gas, but new, alternative technologies have already appeared in many places (mainly in new constructions). It is not only the solar panel that needs to be considered, many buildings are also being built that utilize ground heat. This direction will prevail more and more markedly in the future. Sustainability has become a basic requirement.
Challenges force solutions
According to experts, skyrocketing energy costs, inflation, high-interest rates and labour shortages will be with us in the near future. At the same time, all of these challenges force a solution and have a long-term stimulating effect on the industry. Like bungee jumping: looking down we are horrified, but looking into the distance the panorama is wonderful.