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May – June, 2014 www.resourceinfo.hu HUF 750 Member of the GroupSEE Property Forum 201429 May 2014, Hotel Metropol, Belgrade, Serbia SEE on the moveINTERVIEW ANALYSIS ANALYSIS FOCUSPál Baross: What Development Rising interest SEEhave we gained possibilities in CEE invest- developers andfrom the crisis? in SEE ment markets developments

PROPERTYInvestment Forum 2014 Save the date 25th November 2014 Hotel InterContinental, Budapest MORE INFORMATION AND REGISTRATION: www.portfolio.hu/conference y [email protected] Phone: +36 1 327 40 86 y [email protected]

 REsource FOCUS CONTENTSFOCUS ON 10 The South Eastern Europe regionSOUTH-EAST EUROPE offers development possibilities across the different market sectors and has 5–9 Brief news ANALYSIS investment potential with higher potential returns than the more established, butCOVER STORY 28–29 A region of missing connections increasingly competitive markets in Central and Western Europe. There are 10 Focus on South East Europe - Huge ANALYSIS countless excellent opportunities in such potential in a complex market an untapped market. At the same time, 30–32 Railways in SEE – Poor prospects risks are also considerable. The picture isANALYSIS very complex, but the coming years will ANALYSIS be certainly exciting in this region. In this 11–13 Development possibilities in SEE issue, the SEE countries are in the spotlight. 34–35 Office developers active in PolandOPINIONS and Czech 37 14–15 Pioneers could get their rewards ANALYSIS INTERVIEWANALYSIS 35–36 Poland and Czech dominate CEE None of the real estate sectors, which investment have been in continuous transition since 16–17 SEE: a good place to do business? the crisis, escaped serious re-thinking, INTERVIEW transformation, the depositing of newANALYSIS funds and new standards. Some became 37–39 What have we gained from the losers in this renewal while others have 18–19 Constructing new European crisis? – Interview become stronger. We spoke to Pál Baross capitals FRICS, Chairman of the board at BFVK, ANALYSIS about important questions affecting theANALYSIS profession, the South Eastern European 40–41 Slow but steady – Budapest is region’s potential and about the decade 20–21 Where is the holiday home market ready to move on long non-existing governmental real estate heading? policy. REPORTANALYSIS OPINIONS 42 Portfolio.hu FM 2014 Conference 22–23 What does the SEE housing market The post crises period brought changes to have in store? LIST every market in Eastern Europe, and now new stars are emerging in the region. CEE 43–50 SEE developers and developments markets are picking up, while SEE draws more and more attention. Who are going to SEE PROPERTY be the winners? Is it time for entering theseFORUM BELGRADE emerging markets? What opportunities do investors and developers have in the 2014 region? 29th May 2014 Belgrade, SerbiaMORE INFORMATION AND REGISTRATION:www.portfolio.hu/en/events y [email protected]: +36 1 327 40 86 y [email protected] www.resourceinfo.hu | 2014/5–6.

REsource EDITORIAL Katalin Major Editor-in-chief//[email protected] Winds of change RE SOURCEIngatlanInfó For the first time this year we are organizing a conference together with RICS in Belgrade További hírekért, elemzésekért látogasson el and due to this event the current issue is dedicated to the South-East European (SEE) a honlapunkra! www.resourceinfo.hu countries. We analyzed this topic from many points of view in order to understand what this region has in store for real estate developers and investors. resourceinfo hírlevél A few years ago Eastern European countries meant mostly Central and Eastern READ US DAILY//SUBSCRIBE@//www.resourceinfo.hu European property markets but currently the SEE region is getting much more and more attention. The Balkan region is so diverse that it is best not to generalize. However, Editor-in-chief what all countries in this region have in common is that their real estate market history Katalin Major – [email protected] is still in an early stage, with rare exceptions. There is huge potential in such an untapped market. At the same time, risks are also considerable and what is worse, in many cases, Contributors unpredictable. The infrastructure in the region, in addition to the legal and institutional Ákos Budai, Gergely Ditróy, Iván Hámor, David Lawrence, frameware, is problematic. The real estate market is not transparent and suffers from a Tünde Madurovicz-Tancsics lack of liquidity. This situation is currently discouraging most international developers and investors from these upswing markets. However, the region is getting closer to Advertising coordinator joining the European Union which has increased the confidence of international market Krisztina Barta players and makes the regulatory, legal and institutional framework more transparent and familiar. Translator András Nagy To understand the trends in the region we also evaluated the opportunities of the CEE markets allowing for a more detailed insight into trends in Hungary and Budapest. Copy editor Among others, we analyzed CEE office market processes, investment opportunities and Sofia Hum the shifting Budapest office market. Photo Lázár Todoroff, Shutterstock.com, MTI, Profimedia.hu Sales Attila Bacsa – [email protected] Publisher Zoltán Bán NET Média Zrt 1033 Budapest, Polgár u. 8–10., Hungary Tel: (+36-1) 327-4080, fax: (+36-1) 327-4081 E-mail: [email protected] www.resourceinfo.hu HU ISSN 1419-4392 Lapunkat rendszeresen szemlézi a megújult A REsource IngatlanInfó bármely részének másolásával és terjesztésével kapcsolatos minden jog fenntartva. A NET Média Zrt. valamennyi, a REsource IngatlanInfóba bekerülő adatot, információt, hírt megbízható, ellenőrizhető forrásból szerez. Az adatokat és információkat – lehetőségeinkhez képest – a megjelenés előtt kontrolláljuk. Mindezen körülmények ellenére előfordulhat, hogy a REsource IngatlanInfóban utóbb tévesnek bizonyuló hírek, információk jelennek meg. Éppen ezért felhívjuk tisztelt olvasóink figyelmét, hogy ha a megjelentetett hírek, információk alapján gazdasági, pénzügyi döntést kívánnak hozni, úgy előzőleg az információk megfelelőségét, valóságtartalmát ellenőrizzék. A megjelenő információk esetleges valótlanságából, pontatlanságából eredő károkért a NET Média Zrt. mindennemű felelősségét kizárja. 2014/5–6. | www.resourceinfo.hu

 REsourceRebirth of the Tőzsdepalota Record take-up for Cen- BRIEF NEWS tral and Eastern EuropeThere are not many better office develop- be occupied by offices and 8,000 sqm byment locations in Hungary than Szabad- premium service and retail space. Where Take-up in the Central and Eastern Euro-ság Square, located in downtown Buda- possible, we will try to keep the original pean (CEE) region exceeded all previouspest. The construction, or for the time features, indoor and outdoor spaces. The levels and hit a new record high of 1.4 mil-being internal demolition works, has completely destroyed internal spaces will lion sqm of office space being transacted inrecently started on one of the most pres- be reworked with modern glass and steel 2013, according to Cushman & Wakefield.tigious office buildings, the Tőzsdepalota, solutions,” said Michael Tippin, owner of The market report analyses Bratislava, Buda-which was the former Hungarian state Tippin Corporation. The Exchange Pal- pest, Prague and Warsaw where the totaltelevision headquarters. The €100 mil- ace will be restored based on the designs combined office stock equates to nearlylion restoration project will deliver 35,000 of Beyer Blinder Belle Architects while the 12 million sqm, tempered by limited newsqm of luxury office and retail space, and demolition and construction work will be supply being released in the region (circasignificant number of parking plots at the lead by AIG/Lincoln. The restoration is 436,000 sqm).purchased Lipót Garage. planned to be completed by 2017 and this is when the first tenants will move in. According to Cushman & Wakefield’s The owner of Exchange Palace is a sub- review of the office markets in the capi-sidiary of the Canadian based Tippin Cor- The restoration of the grand Art Nou- tal cities of Central Europe, the ranking ofporation. An investment fund belonging veau building originally built in 1905 is office markets by total office stock remainsto Tippin Corporation purchased MKB’s big news for everyone who wants to see unchanged with Warsaw retaining the larg-claim on the building in 2012, and the the renewal and restoration of late 19th est office stock equating to 4.1 million sqm,bank stopped financing the project. The century and early 20th century buildings. followed by Budapest with 3.2 million sqm,building permit was approved in Sep- Luckily there are many more of these ini- Prague in third place with nearly 3 milliontember 2013 and the demolition of the tiatives, for example the recently com- sqm and Bratislava in fourth position withnon-structural internal elements began. pleted Eiffel Palace office building or the 1.5 million sqm of existing supply.According to public records, Tippin has currently underutilized but already com-won Cougar Real Estate as co-investor for pleted Váci1 Business House. Others New released supply in the CEE regionthe project. include the Paris Department Store, Cas- equated to 436,000 sqm for 2013, which tle Bazaar or the Parliament and a number can be viewed as stable, and was generally “According to the plans we will reno- of similarly renovated hotels, apartment delivered equally in H1 and H2 of the year,vate the total area of the 50,000 sqm eclec- buildings, churches and thermal baths. down slightly on the new supply released intic Art Nouveau building. 27,000 sqm will 2012. The highest amount of new space was delivered in Warsaw (nearly 300,000 sqm), then Prague (nearly 80,000 sqm), followed by Budapest (33,000 sqm) and Bratislava (26,000 sqm). Currently there is close to 600,000 sqm of office space under construc- tion in the CEE region which is planned to be delivered in 2014. This equates to a 27 percent increase in new supply compared to 2013. Prime rents in the central business dis- tricts (CBD) of the four Central European capital cities remained stable, with the exception of Warsaw and Prague where they fell slightly this year and currently stand at €25.00/sqm/month and €20.25/sqm/month respectively. Prime rents in the Budapest CBD have remained unchanged at €21/sqm/ month since 2010 whilst Bratislava’s head- line rent of €15/sqm/month has remained unchanged since the end of 2012. The CEE vacancy rate of 14.1 percent in H1 2013 further increased to 14.3 percent. www.resourceinfo.hu | 2014/5–6.

REsource BRIEF NEWS will now be used as cultural facility. The Photo: László Beliczay/MTI 70-year-old, highly run down building has been turned into a modern public pavil- The vacancy rate outlook is forecast to rise GOMBA ion. The fountain in the courtyard will be further across the region as new speculative renovated together with the fountain tanks space is delivered to the market. Vacancy 529 new dwellings were put to use in and green surfaces. The historic building rates are the lowest in Warsaw (11.7 per- Budapest, which was more than double of retains its architectural character but gains cent) followed by Prague (13.2 percent), that of a year ago. some new functions. Finally together with Bratislava (15.2 percent) and Budapest (18.4 the handover of Metro Line 4, the square’s percent). However, it remained below the 2012 ten year-long restoration has come to an level as it was less than 70 percent of the end. Housing market first quarter value of 2012. The 2014 num- recovering bers are more or less in line with the 2012 The project is part of the Újbuda Cul- year end figures. This is a weak result but tural Program. The local government According to the data published by the for the time being we cannot hope for invested considerable effort into the orga- Central Statistical Office in the first three much more. The crisis was a big one and nization and implementation of this pro- months of 2014, 1692 new dwellings were recovery will take many more years. gram. The program covers the area from St. built, 51 percent more than a year ago. Gellért Square up to and including Móricz The number of dwelling construction per- Year-on-year, there was a change in Zsigmond Square. mits rose year-on-year by 20 percent to the group of builders. The proportion of 1654. Regarding new home construction, homes built by private First chairman of the proportion of dwellings built by enter- RICS Hungary has prises and those built for sale increased. individuals fell year-on-year from 70 passed away percent to 56 percent, while the propor- Although historically the first quarter is tion of homes built by enterprises rose Chris Bennett, the former chairman of the the “low season”, the sharp fall has come to from 29 percent to 43 percent. In Budapest, Royal Institution of Chartered Surveyors an end on the housing market and we see 83 percent of all new homes were built by (RICS) Hungary and one of the pioneers of signs of recovery. According to the sea- enterprises. The increasing number of modern Hungarian commercial property sonally adjusted data, the number of con- homes built by companies also indicates industry has died at the age of 69. The Brit- struction permits and dwellings put to use that the market is recovering. Interestingly ish professional spent more than 20 years in has increased, so clearly 2013 H2 was the mortgages increased in the first quarter Hungary. historical low point, when this number did by 51 percent, indicating that demand has not even reach 2000. been increasing. The main reason might Chris Bennett FRICS was based in Hun- be interest rate cuts as the cut in mortgage gary since 1 February 1991. Before mov- Despite the apparent increase, the rates slowly displaces subsidized loans. ing to Hungary, he was also Chairman of number of dwellings put to use remained the Industrial Agents’ Society in the United extremely low, at barely a third of the first Handover of Gomba Kingdom before leaving Richard Ellis and quarter performance of the last pre-crisis setting up his own development com- year, 2008. The number of dwelling con- Following many years of uncertainty the pany. He joined PricewaterhouseCoopers struction permits also increased, but it redevelopment of Újbuda’s best-known in Budapest in 1991 to run their real estate makes up only 18 percent of the first quar- building, the Gomba (Mushroom) has practice in CEE. In 1994 he left to join DTZ ter level of 2008. finally been completed. Zsigmond Móricz to build their network throughout CEE. Square’s most famous building was unused He was the first chairman of RICS in Hun- for many years, and was slowly deterio- gary and in 2008 he joined Europa Capital’s rating. Finally it has been reformed and Emerging Europe Fund which specializes in Ukrainian, Romanian, Bulgarian and the Western Balkan markets. In the last few years he worked for Buda- pest-based real estate investment company Indotek Group. Chris was a member of the executive board overseeing the acqui- sitions and the asset management. Chris Bennett was one of the most senior mem- bers of RICS in Hungary and the wider CEE 2014/5–6. | www.resourceinfo.hu

 REsourceregion. He took an active role in building both purchasing prices and rental rates will BRIEF NEWSthe organization in this part of the world, increase.”not only by mentoring and interviewingmany future members, but also by sharing RICS has first produced independenthis vast knowledge and experience at con- quarterly country reports for Bulgaria, theferences and seminars. Czech Republic and Romania. All the indi- ces turned positive to different extents in the various countries and sectors.RICS: the mood in the New green officeHungarian real estate in Budapestmarket is getting betterBoth the occupier and investment senti- DUNA OFFICE CENTER Duna Office Center located in Váci Roadment indices turned positive in the first and operated by BNP Paribas Real Estatequarter of 2014 for the first time since Michael Smithing FRICS, Chairman of Hungary has received the Building Research2011, with demand increasing for both the RICS Hungary, stated “The Property Moni- Establishment Environmental Assessmentlease and purchase of commercial prop- tor confirms general market sentiment that Method (BREEAM) In-Use Internationalerty, according to the Commercial Property the Hungarian real estate market is regain- Certificate for the building and for its oper-Monitor published by RICS. Demand has ing trust. This is in line with the increas- ation practice with a “good” rating.been increasing more than supply, result- ing optimism of international investors anding in decreasing vacancy rates mid-term. domestic market players. Although most Duna Office Center (12,700 sqm officeDespite the limited supply rents remained probably the sectors activity will not return building), asset managed by CE LANDunchanged for the time being. Investors' to pre-crisis peaks, vacancy rates are def- Holding Ltd., has been one of the first build-interest is clearly growing, especially in the initely expected to improve due to better ings of the Váci Road corridor. The build-retail and industrial segment, and for prop- economic growth. The coming years will be ing is currently in its third life cycle and haserties in need of renovation and reposition- ideal for purchasing or renting in Hungary undergone several renovations in recenting available at very low prices. as most probably due to increasing demand, years. It has been internally and externally renovated in line with the latest require- ADVERTISEMENT0DJ\DU7HOHNRP1\UWHODGrmVEmUHOKHWįLQJDWODQRN,URGDKg]DNWHOHSKHO\HNxGxOįNODNgVRNwww.strabag-pfs.huBudaörs Budapest, XI. Sopron Budapest XV.Gyár u. 2. Budafoki út 59. Széchenyi tér 7-10. Kert köz 20.)XQNFLrUDNWgUEg]LV )XQNFLrLURGD )XQNFLrLURGDmVWHFKQROrJLD )XQNFLrLURGDmVWHFKQROrJLDcSxOHWWHUxOHWP2 cSxOHWWHUxOHWP2 cSxOHWWHUxOHWP2 cSxOHWWHUxOHWP27HOHNWHUxOHWP2 7HOHNWHUxOHWP2 7HOHNWHUxOHWP2 7HOHNWHUxOHWP29LVV]DEmUOmV– 9LVV]DEmUOmV– 9LVV]DEmUOmVP2 9LVV]DEmUOmVP2

REsource BRIEF NEWS ments. The building belongs to Volksbank that by the year 2020, all new buildings in 37,200 sqm. Vacancy rate remained flat Group and has thus become a valid compet- the European Union will have to prove that with only a 0.1 percentage point increase itor of the newly built ‘A’ class offices. they are nearly zero-energy buildings. By on the Q4 2013 figures. If we only consider the year 2050, carbon emissions from all the leased properties the change is even “There are more and more BREEM certi- buildings need to be as near to zero as pos- lower, which is a positive sign given the fied office buildings in Hungary. Since our sible. stock correction. company is committed to environmental awareness and sustainability, we are very Budapest office During Q1 2014, BRF registered 158 lease proud of the fact that out of the 25 BREEM market is stable agreements. The largest transaction was certified buildings we are managing two of a renewal signed by Lufthansa in Infopark them (Váci Greens, Duna Office Center). According to the Budapest Research Forum E on a total area of 4,500 sqm. The largest The certification of an additional six build- (BRF) the total stock of the Budapest office new lease was registered in Krisztina Pal- ings is in progress,” said Csukás Csongor, market, including owner occupied and spec- ace on 3,150 sqm. General Electric further CEO at BNP Paribas Real Estate Hungary. ulative buildings, reached 3,184,500 sqm expanded their office space in Váci Greens (2,900 sqm), making it the largest expan- Central and Eastern EIFFEL PALACE sion in the quarter. In general, new leases Europe goes green took the highest share in total leasing activ- at the end of Q1 2014. Speculative stock ity (44.1 percent), followed by lease renewals Green building certification has been rap- amounted to 2,558,150 sqm, and owner (35 percent) and expansions (20.9 percent). idly expanding in the CEE region over occupied stock amounted to 626,350 recent years and currently stands at over sqm. BRF recorded one new office deliv- Members of the BRF include CBRE, Col- 1.75 million sqm. Poland leads the CEE ery, the Eiffel Palace (14,500 sqm) and it liers International, Cushman & Wake- with over 40 percent of the region’s green was handed over by Horizon Development field, DTZ, Eston International, Jones Lang building certification (730,000 sqm).Hun- in the CBD. BRF made the usual annual LaSalle and Robertson Hungary. gary ranks third among the five regional revision of the stock, resulting in a nega- countries with more than 200,000 sqm of tive correction of 2,400 sqm in speculative Positive signs regard- green space ahead of Romania and Slova- stock. ing home loans kia, based on JLL’s research report on green offices. Domestic real estate statistics have been The latest data published by the National indicating for a while now that the worst is Bank of Hungary clearly shows that res- At least 2.5 million sqm of existing devel- over but even if we see positive signs, the idential lending has started to recover. opments or pipeline projects in the CEE real breakthrough is not here yet. Total Compared to last year, the volume of home region were registered and are targeting leasing activity in Q1 2014 was 57,200 sqm, loans has increased by 50 percent in the green certification, with Poland account- which is the lowest recorded quarterly fig- first quarter. Of course last year’s figures ing for around 700,000 sqm. However, it ure since Q1 2012. Take up (total leasing were extremely low, thus compared to the should be clearly noted that many planned activity excluding renewals) amounted to pre-crisis period this number is very small. projects have not yet been registered, so the final volume of potential pipeline in Mortgage rate decreased year-on-year Poland will be even higher. from 9.4 percent to 7.1 percent in aver- age while banks only paid on average 2.1 In the majority of markets, a very high percent interest on short term deposits percentage of new projects in the pipeline, instead of 4.8 percent. 100 percent in some markets, will be tar- geting green certification. Pipeline proj- The housing ects also include the first green buildings market has to start from Serbia and are on the up in Hungary, from deep down Romania and Slovakia. In the pipeline of office certifications projects, less opera- Housing statistics clearly show a positive tions and maintenance certifications and trend, while in the case of housing prices a more new build certifications are being breakthrough is yet to come. seen, which is due to the large pipeline in Poland (mainly Warsaw) and a gradual 2013 year end prices for newly built return of development to other parts of the homes are at 92.3 percent of the year end region. 2010 level, after they fell by 4.8 percent compared to last year’s October-December In line with the 2010/31/EU Directive 2014/5–6. | www.resourceinfo.hu

 REsourceperiod following 2 years of stagnation. The Photo: Zoltán Máthé/MTIprice of used homes was at 81.7 percent ofthe 2010 level. This means an 8 percent fall BRIEF NEWScompared to the previous quarter and is ahistorical low point since the index started building is occupied by thirty different GATE OF LAKE VELENCEin 2009. shops and services, a banquet hall for 120 people and a new civil marriage office. The total volume of lease transactions The data confirms what we suspected reached 55,650 sqm in Q1 2014 which rep-already: 2014 started with record low hous- Lake Velence’s largest tourist develop- resents a 77 percent increase over the cor-ing prices. However, recently published ment was built on an eight-acre area. 70 responding period in 2013. In total, nearlydata shows positive change. Housing mar- percent of the project was financed by EU 72 percent (39,910 sqm) of the total leasingket data of the first quarter shows a signifi- and state funds and the rest by the local activity was made by renewals while newcant growth in the number of transactions. government. Originally plans as a shop- leases and expansions represented only 28Real estate companies own housing price ping mall was planned to be built there, but percent (15,740 sqm).indexes show stagnation, which is a positive this was not fulfilled as the subcontractorsign after years of decline, but also means went bankrupt. The rationalization and optimization ofthat the breakthrough has not yet arrived. leased premises continued. The vacancy Occupancy increases in rate increased slightly to 21.50 percent, It is important to note that the stagnation industrial properties reflecting approximately 25 bps growth,is the result of two opposite processes. On both quarter-on-quarter and year-on-the one hand it is positive that in the capital The total volume of lease transactions year. While availability managed to declineand in other big cities, where employment reached 55,650 sqm in Q1 of 2014. slightly (12 bps) quarter-on-quarter inchances are higher, prices have been grow- logistics parks, it witnessed a much sharpering and this is expected to continue. On Although this level represents a substan- jump in city logistics parks with a 358 bpsthe other hand, there are some parts of the tial increase over the corresponding period increase.country and certain property types, which of 2013, it was driven mainly by renew-have been lagging behind and in the case of als. BRF’s industrial Report shows that last ECE starts constructionthe latter, further price declines are possible. year’s vacancy rate decrease was not stable, of Polish mall in Q1 2014 it started increasing again.FTC stadium almost German developer ECE has started con-ready In Q1 2014 the size of modern industrial struction of a €150 million shopping centre stock in Budapest and its surroundings in Poland. Zielone Arkady located in Byd-FTC’s new stadium might be completed totaled 1,847,995 sqm. In the first 3 months goszcz is the largest project undertaken toin May and may be open to the public by of the year one building came to the mar- date by ECE’s Polish business. It will com-August. The facility was built in a record ket with a gross leasable area of 11,090 sqm. prise a leasable area of 50,000 sqm with 20014 months. The construction work began The building was a built-to-suit develop- shops and restaurants over three levels andin early 2013 and might be completed on ment for GE Oil&Gas in East-Gate Busi- will be the biggest shopping centre in the30th May at Albert Florian Stadium. This ness Park. city. ECE said it will invest around €150will be followed by two months of a hando- million in the mall, which is due to openver period and test operations. The facility BRF did the annual stock revision and as in the winter of 2015. Almost 40 percent ofwith 22,500 seats will open to the public in a result, the size of modern industrial stock the areas are currently pre-let, with tenantsAugust. increased by an additional 3,260 sqm on including fashion retailers Zara, Pull&Bear, top of the new supply. Based on the latest Massimo Dutti, Bershka, Stradivarius andRenewed Gate of update from owners, historical revisions Oysho.Lake Velence were also included.Located at the former public beach atLake Velence, the Gate of Velence proj-ect has been completed. The HUF 2.2 bil-lion project consists of 10 elements, includ-ing a sandy beach, and indoor and outdoorpromenade, a lakeside boardwalk, a reno-vated harbor and an event space. The main www.resourceinfo.hu | 2014/5–6.

 FOCUS ON SOUTH-EAST EUROPEHuge potentialin a complex marketA few years ago Eastern European markets meant mostly CEE property markets but currently the South-East European (SEE)region is getting more and more attention. The Balkan region is so diverse that it is best not to generalize. However, what allcountries in this region have in common is that their real estate market history is still in an early stage, with rare exceptions,like Romania and Bulgaria. There is huge potential in such an untapped market, at the same time, risks are also considerableand what is worse, in many cases, unpredictable. The infrastructure in the region, in addition to the legal and institutionalframework, is problematic. The real estate market is not transparent and suffers from a lack of liquidity. This situation iscurrently discouraging most international developers and investors from these upswing markets. However, the region ingeneral is getting closer to joining the European Union which has increased the confidence of international market play-ers and makes the regulatory, legal and institutional framework more transparent and familiar to them. The picture is verycomplex, but the coming years will be certainly exciting in this region. In this issue, the SEE countries are in the spotlight.2014/5–6. | www.resourceinfo.hu

 REsourceDevelopment Tomislav Greguric, Managing Director of ANALYSISpossibilities in SEE the Zagreb-based Renova Property Con- sultants.Very limited pipeline, higher returns on investments, encouraging EUharmonisation, excellent locations, and economic, political, legal and In contrast to Zagreb, Belgrade hasprocedural concerns, lack of visibility and liquidity at the same time. almost zero vacancy and low levels ofWhat chances do the SEE markets have? stock. EU candidate status is also benefit- ing Serbia from a trade and economic per-DAVID LAWRENCE spective. Office supply in Belgrade remains low, even by Central and Eastern Europe T he South-East Europe (SEE) mented in the key areas of urban planning (CEE) standards, at a little over 600,000 region offers development possi- and permitting. This is why a number of square meters (sqm) and only 50 percent bilities across the different market serious developers and investors have been of this is Class A according to JLL.sectors and has investment potential with stuck at the very first block. They havehigher potential returns than the more often been frustrated after having tried to Pipeline is very limited and CBRE argueestablished, but increasingly competitive resolve the bureaucracy and red tape for up that the almost complete absence of proj-markets in Central and Western Europe. to 2 years and simply walked away.” ects and solid demand will result in a lackHowever, SEE has a reputation for bureau- of space for potential tenants. Only 3,200cracy and unpredictability that can make Belgrade, Zagreb and Bucharest are gen- sqm of new supply is expected to be com-the development processes expensive and erally viewed as offering office develop- pleted in 2014 with the delivery of the Oldtime consuming. Further, the countries ment possibilities despite being at different Mill office and hotel complex located inare regarded as suffering from a lack of points in the development cycle. Belgrade New Belgrade where 90 percent of Bel-visibility and liquidity and an obvious exit has close to zero vacancy with limited grade office stock is located. The renova-strategy for developers, as international stock while Zagreb has high vacancy and tion project by the Austrian Savavia Groupinvestors have been reluctant to enter the an “overheated” office market. However will deliver the 240 room Radisson Blu Oldmarkets due to economic, political, legal development opportunities are anticipated Mill Hotel in addition to office space thatand procedural concerns. with an economic upturn in the Croatian has received financing from the EBRD. Fabijan Matosevic, Co-Director of Vic- economy in the next 2-3 years. The con-torios Investment Managers, argues that ventional wisdom is that developers need Only two major office projects are inthe development process in Serbia needs to forward plan in anticipation of an eco- the pipeline, Globe Trade Centre (GTC)to be simplified in addition to the estab- nomic recovery. “Developers need to look are due to start construction of the firstlishment of a more reliable judicial process. 3-5 years ahead and therefore should now 10,000 sqm phase of a 27,000 sqm develop-“The European Union (EU) will lead to an start planning for the future,” commented ment. In another mixed-use development,improvement of the judicial and legal sys- Immorent are developing the Sirius officetem in Serbia, which will improve the local and hotel project, also located in New Bel-investment climate and hence benefit the grade.investment market in the long term. Froman international perspective, Serbia still In a major development for the city, thelacks much of the institutional and judi- Dubai-based Eagle Hills have releasedcial transparency which is crucial to attract plans for the Belgrade Waterfront proj-investors and developers,” he said. These sentiments are echoed by Zlatko AFI PARK1Greguric, Principle Banker for Property &Tourism at the European Bank for Recon-struction and Development (EBRD), withregard to Croatia. “We already have thestructures in place to create a develop-ment and investment market. Howeverthe structure is not being properly imple- www.resourceinfo.hu | 2014/5–6.

REsource  ect that is planned to deliver commer- Commercial real estate investment volumes (EUR million) cial, retail, hospitality and residential space.ANALYSIS The complex will consist of a 60 percent 500 built area including a 220 metre tower and Bulgaria 40 percent open space. Construction of the first retail phase is due to commence 450 Croatia this year. The project is being undertaken against the background of a trade agree- 400 Romania ment between the Serbian and Abu Dhabi governments. “Available office space in 350 Serbia quality buildings is close to zero in Belgrade and this projects draws attention to the city,” 300 said Diana Klott, Managing Director of the Belgrade-based consultants NAI-atrium. 250 Developers are increasingly attracted 200 to the Bucharest office market. The lat- est delivery was the €80 million Floreasca 150 Park by Portland Trust in partnership with the New York-based Apollo Real Estate 100 Advisers (AREA). In another project seg- ment AFI Europe are developing the 50,000 50 sqm AFI Business Park Bucharest compris- ing four office buildings and an office tower. 0 2011 2012 2013 Skanska is due to complete the first 19,500 2010 sqm phase of Green Court this year; the SOURCE: CUSHMAN & WAKEFIELD, RESOURCE complex is expected to be fully let on open- ing. On completion it will consist of 52,000 will attract new retailers and cargo and dis- erties. The key is in extending the summer sqm of space in three buildings. “We regard tribution players could stimulate the mar- season,” said Filip Vucagic, Head of Invest- the entry of Skanska into the Bucharest ket, increasing its appeal to foreign inves- ment & Valuation at Colliers Croatia. office market as an endorsement of Roma- tors and operators. Sinisa Dadic, Partner nia,” commented Sinziana Frangeti, Associ- at 3D Consulting argues that Croatia is in From an optimistic perspective, Uros ate Director at Colliers Romania. a position to act as a corridor from central Grujic, senior consultant at JLL Serbia com- and northern Europe to ports such as Rijeka. ments that there will be plenty of opportuni- It is hoped that Croatia’s EU accession ties once Serbia becomes more EU friendly Investor interest could also move from and once foreign investors start to feel com- the more established sectors to the hotel fortable with Serbia. “Figures for vacancy and hospitality sector as Croatia has sig- rates, take-up, limited pipeline and the nificant opportunities for hotel and leisure number of people within Belgrade will all development and asset management on the contribute to upcoming investments. Fur- Adriatic coast. “Hospitality is the number ther, Belgrade is the largest and most pop- one brand and investor interest is growing ulated city within the region and geographi- in for example former state-owned prop- cally ideally positioned,” he concluded. 2014/5–6. | www.resourceinfo.hu

 REsourceFacts about Source: CIA World FactbookSouth-East European Population: July 2014 estimatescountries Ethnic groups: only groups comprising more than 1% of the population are listed, 2011 estimates Language: only official languages are listedAlbania Bosnia and Herzegovina Independence: current form obtained after the dissolution of Yugoslavia GDP and GDP per capita: 2013 estimatesCapital: Tirana Capital: SarajevoArea: 28,748 km2 Area: 51,197 km2Coastline: 362 km Coastline: 20 kmPopulation: 3.01 million Population: 3.87 millionEthnic groups: 95% Albanian, 3% Ethnic groups: 48% Bosniak, 37%Greek Serb, 14% CroatLanguage: Albanian Language: Bosnian, Croatian,GDP (PPP): $26.73 billion SerbianGDP (PPP) per capita: $8,200 Independence: 1992Currency: Lek (ALL) GDP (PPP): $32.16 billion GDP (PPP) per capita: $8,300 Currency: Convertible mark (BAM)Bulgaria CroatiaCapital: Sofia Capital: ZagrebArea: 110,879 km2 Area: 59,594 km2Coastline: 354 km Coastline: 5,835 kmPopulation: 6.92 million Population: 4.47 millionEthnic groups: 77% Bulgarian, 8% Ethnic groups: 90% Croat, 4% SerbTurkish, 4% Roma Language: CroatianLanguage: Bulgarian Independence: 1991GDP (PPP): $104.6 billion GDP (PPP): $78.9 billionGDP (PPP) per capita: $14,400 GDP (PPP) per capita: $17,800Currency: Lev (BGN) Currency: Kuna (HRK)Kosovo (partially recognised) Macedonia, FYR MontenegroCapital: Pristina Capital: Skopje Capital: PodgoricaArea: 10,887 km2 Area: 25,713 km2 Area: 13,812 km2Population: 1.86 million Population: 2.09 million Coastline: 294 kmEthnic groups: 92% Albanian Ethnic groups: 64% Macedonian, Population: 650 thousandLanguage: Albanian 25% Albanian, 4% Turkish Ethnic groups: 45% Montenegrin,Independence: 2008 Language: Macedonian, Albanian 29% Serbian, 9% Bosniak, 5% Alba-GDP (PPP): $14.11 billion Independence: 1991 nian, 3% MuslimGDP (PPP) per capita: $7,600 GDP (PPP): $22.57 billion Language: MontenegrinCurrency: Euro (adopted unilater- GDP (PPP) per capita: $10,800 Independence: 2006ally) Currency: Macedonian denar GDP (PPP): $7.429 billion (MKD) GDP (PPP) per capita: $11,900 Currency: Euro (adopted unilaterally) Romania Serbia Capital: Bucharest Capital: Belgrade Area: 238,391 km2 Area: 77,474 km2 Coastline: 225 km Population: 7.21 million Population: 21.73 million Ethnic groups: 83% Serbian, 3.5% Ethnic groups: 83% Romanian, 6% Hungarian, 2% Roma, 2% Bosniak Hungarian, 3% Roma Language: Serbian Language: Romanian Independence: 2006 GDP (PPP): $280.7 billion GDP (PPP): $80.47 billion GDP (PPP) per capita: $13,200 GDP (PPP) per capita: $11,100 Currency: Lev (BGN) Currency: Serbian dinar (RSD) www.resourceinfo.hu | 2014/5–6.

REsource  OPINIONSINTERVIEW Pioneers could get their rewards The post crises period brought changes to every market in Eastern Europe, and now new stars are emerging in the region. CEE markets are picking up, while SEE draws more and more attention. Who are going to be the winners? Is it time to enter these emerging markets? What opportunities do investors and developers have in the region? K ATALIN MAJOR John Verpeleti, Chairman of the ger, but these days conservative money Europe (SEE) moving forward as both Management Board, Colliers is not as enthusiastic about entering the have their advantages and disadvantages International, Eastern Europe Central Eastern Europe (CEE) market as at the moment. The Czech Republic will it once was. Many expected distressed benefit from any overflow out of Poland It is true that the pace of development assets to provide opportunities but this and Romania has a sufficient critical has differed for various countries, but I has not eventuated, partly because of mass to keep certain investors interested. am not sure this can be put down solely market size issues. Adventurous money Contrarian investors are looking at all to the crisis, as differentiation was often needs bigger deals in order to markets, but the opportunities need to already starting to occur before. Poland make it worthwhile. Another change, be good and we do not have much con- arguably presented the best economic particularly in markets where the finance version of this interest into actual action and political credentials shortly after tap has been turned off for some time, is just yet. the crisis and it has emerged as the big- that financing is once again becoming gest winner. Many argue that it is a core available. This will be great for getting As always, I think pioneers prepared European market these days. The num- the wheels moving properly again. to take risks in the more difficult mar- bers certainly indicate investors favored kets could do well, but barriers to entry the country over the many other options The interest in the region comes in the smaller markets sometimes still in the region. The other recent trend mainly from Western Europe and the remains high. Risk is being looked at has seen the pool of dominant inves- United States. Most of the investment differently these days and uncertainty, tors shrink considerably and it is now came from these sources as there was, which is slightly different, has occasion- a smaller number of names associated and remains, limited domestic capi- ally added an unwanted dimension. An with deals. A few years ago the list of tal. I would be hesitant to pick a specific investor is prepared to accept a normal interested parties was significantly lon- country winner in CEE and South-East range of exposures, but if there are unex- pected and/or unprecedented govern- 2014/5–6. | www.resourceinfo.hu

 REsourcement interventions in business, a mar- In the case of Serbia, the market is INTERVIEWket's appeal can be significantly reduced. under developed, and with the countryConversely, consistent government per- The market across the region has suf- now on the road to EU accession, theformance or behavior finds favor with fered due to over-development and as reputation of the country is expected toinvestor communities. a result, rents have fallen and investors improve. Development is needed across have shifted their attention away from every commercial sector and inves- The region remains safe, although the this market. The lack of development tors will find countless opportunitiessituation in Ukraine is posing serious finance in the last 2 years has resulted in Belgrade, a city that has been largelychallenges and it will continue to do so. in vacancy rates reducing, and as such ignored over the past 10 years.As always, CEE and SEE provide abun- rents have stabilized, and in parts,dant and sound opportunities, but the started to rise again. Therefore, confi- On the other hand, Bulgaria has wit-trick is to pick the sector and specific dence is returning and we fully expect nessed far too much developmentproperty correctly and not ignore mar- investors to return to the region, with (mainly as a result of its EU entry, andket fundamentals as some have in the particular focus on Romania, Serbia and liquidity flooding the market too quickly)past. Bulgaria. and is taking time to absorb the huge amount of development. This situation is Andrew Peirson MRICS, now stabilizing, just like in Croatia, and Managing Director, investors will find a much healthier mar- JLL, South East Europe ket place than 12-24 months ago.The investment market across SEE looks The key to the investment market is thepositive for the next 12 months. While will of the banks to refinance. A numberthe majority of investor focus is cur- of high profile assets are highly leveraged,rently on Romania, the Western Balkans and with the majority of the finance com-is starting to gain more attention follow- ing from Greece, Italy and Austria, it willing years of rental decrease and very lit- require the banks to potentially acknowl-tle investor appetite. edge a decrease in value and to refinance existing debt. ADVERTISEMENTEGYEDÜLÁLLÓ JÓ ALAPOK TÁRSASHÁZI RESIDENTAL EXCEPTIONALBEFEKTETÉSEK BERUHÁZÁSHOZ INVESTMENT INVESTMENTS BUDAPEST KÖZELI CONSTRUCTION ÉPÍTÉSI TERÜLET SITE CLOSE TO BUDAPESTA KIS-SVÁBHEGY LÁBÁNÁL GÜL BABA TÜRBÉJÉNÉL AT THE BOTTOM OF THE AT THE GÜL BABA STREET KIS SVÁBHEGY #6%\"1&45(À-#\"#\"6 )#6%\"1&45(:¸(:'Ĺ6 Eladva (º%º--ī Eladva TESSEDIK SÁMUEL UTCEAladva IUUQXXXHQNIVFHZFEVMBSMMzPa6b9Ca9d9F/1GSFzaL6b9aU9d9F/2USFzaT6bT9Fa9dE9L/S3SSFzaEO6b9DaH9d9IM/K4JSTzSaIb6Áa9dI9M9U/S5UzNabE6aM9dL99/SS6zTabRa6d9E99E/7T6999/8 6999/10 6999/9

REsource ANALYSIS SEE: a good place to do business? South-East Europe (SEE) is probably the least developed, but definitely not the least competitive region of the continent as it has produced some surprising results in this year’s global competiveness reports. Like most emerging markets, SEE countries can offer higher yields on invest- ments, but their underdeveloped institutional framework combined with political and financial instability can make them a risky choice to do business. ÁKOS BUDAI T he region contains 9 coun- ment policies, the quality of the workforce and business sophistication. The two most tries; 4 of them are members of and many others. According to their find- problematic factors for doing business are the European Union (EU) and 7 ings, the region’s best performer was Bul- also shown in our table for each country. of them were part of the former Yugoslavia. garia, placing 57th out of the 148 coun- Limited access to financing and corruption These countries are sometimes referred to tries surveyed, while the worst performer is a widespread problem in the region, but as Balkan countries, however economically was Serbia (101th). Looking at the category crime and overcomplicated tax regulations speaking, Slovenia is usually not considered scores, we don’t see much variation. On a also present challenges. one, because of its level of development. scale of 1 to 7, almost all countries scored Still, for comparison, Slovenia’s results as around 4.5 in the first category that mostly The World Bank Group has produced its well as Hungary’s are displayed in our tables. measures the quality of infrastructure and Doing Business 2014 report, in which they The World Economic Forum’s Global institutions. The variation in scores in the tried to show how difficult it is to start and Competitiveness Report for 2013-2014 second category was even less, which shows operate a local business in different coun- concluded with some disappointing results that the efficiency of goods, labor and finan- tries. According to the report, the best per- regarding the region’s competitiveness. The cial markets is quite low in SEE countries. former of the region is Macedonia, ranking report included an index based on various The most disappointing scores were in the 25th out of the 189 countries surveyed, sur- factors, including infrastructure, govern- third category which measured innovation passing nations such as Japan or France. 2 other countries from the former Yugoslavia Economy GCR Rank Score Basic Efficency Innova- Biggest problems hold a place in the top 50, while the worst (out of require- enhanc- tion and performer of the region was Bosnia and 148) ments sophistica- Herzegovina, ranking among the world’s ers tion factors worst countries to do business in, in almost every category. Bulgaria 57 4.3 4.7 4.2 3.3 corruption, access to financing Starting a business is very easy in Mace- Slovenia 62 4.3 5.1 4.1 3.9 access to financing, inefficient donia; it only takes 2 days compared to the governemnt bureaucracy Organisation for Economic Cooperation and Development (OECD) average of 11 Hungary 63 4.2 4.6 4.3 3.6 access to financing, policy in- days, but it can be rather difficult in other stability Balkan countries, except for Serbia where numbers are similar to those in developed Montenegro 67 4.2 4.6 4.0 3.6 access to financing, corruption countries. However, in Bosnia and Herze- 73 4.1 govina, for example, it takes 37 days to start Macedonia, 75 4.1 4.6 4.0 3.4 access to financing, inadequate a business. FYR infrastructure A challenging environment… Croatia 4.7 4.0 3.5 inefficient governemnt bureau- cracy, policy instability The region had the worst results in dealing with construction permits, which can be Romania 76 4.1 4.3 4.1 3.3 tax rates, corruption 87 4.0 Bosnia and 95 3.8 4.4 3.8 3.4 access to financing, policy in- Herzegovina stability Albania 4.2 3.7 3.1 corruption, access to financing Serbia 101 3.8 4.0 3.8 3.0 corruption, inefficient gov- ernemnt bureaucracy SOURCE: WORLD ECONOMIC FORUM 2014/5–6. | www.resourceinfo.hu

 REsourceEconomy Rank Starting a Dealing Getting Register- Getting Protecting Paying Trading Enforcing Resolving (out of Business with Con- Electricity ing Prop- Credit Investors Taxes Across Contracts InsolvencyMacedonia, FYR 189) struction BordersSlovenia Permits erty 3 16 26Montenegro 25 109 14 54Hungary 33 7 63 76 84 3 34 86 89 95 52Bulgaria 44 55 128 124Romania 54 38 59 32 83 28 52 81 48 52 41Kosovo 58 13 52 134Croatia 73 69 106 69 98 28 98 43 53 136 45Albania 86 42 157 34Serbia 89 59 47 112 45 13 14 146 70 15 70Bosnia and Herzegovina 90 42 80 161 93 65 118 135 62 73 115 135 79 79 92 131 60 136 174 70 76 53 99 100 136 121 58 121 138 83 80 152 60 106 99 49 98 76 189 158 119 85 124 62 45 182 85 44 98 116 103 174 175 164 96 107 115 77 SOURCE: THE WORLD BANKquite discouraging for real estate develop- tion available. Except for SEE’s worst per- Romania. In Macedonia, for example, it isers. While in most SEE countries it usually former, Bosnia and Herzegovina, all Balkan only 8.2 percent.takes the same number of steps and time to countries ranked in the world’s top 50, out-deal with construction permits as in OECD performing most developed countries. A …with promising prospectscountries, the cost, relative to the income region-specific feature is that, except forlevel of the country, can be 12 times as high Macedonia and Serbia, a higher percentage What these reports do not necessarily showas the average in developed nations. How- of individuals and firms are listed in a pub- is that doing business in these countriesever, Balkan countries have income levels 5 lic registry than by a private bureau, which is much less formal than numbers wouldtimes lower than the EU average, so a for- is the opposite of what usually happens in suggest. According to experts, it is alwayseign company should not be discouraged developed countries. advisable to enter the market through localby these numbers. partners, since traditional business com- Paying taxes in SEE countries is usu- munication is based on trust, friendship Registering property can be also chal- ally more difficult than in other European as well as political and personal influences.lenging in the region. Surprisingly, in Slo- countries, as the number of payments per Although this environment might be veryvenia and Croatia it takes 109.5 and 102.5 different for developers accustomed todays respectively to register property com- year and the time spent filing taxes is higher Western business norms, with the rightpared to the OECD average of 24.1 days, than the developed nation’s average. How- partner and financing, a well-chosen proj-while in Serbia, Romania and Bulgaria it is ever, the total tax rate paid by businesses ect with solid fundamentals can easily befaster and cheaper to register property than is lower than the OECD average (41.3 successful in this region of endless oppor-in most developed nations. The cheapest percent) in every SEE country except for tunities.place to register property is Kosovo, whereonly 0.3 percent of the property value is Additionally, the EU has had and willcharged. In other SEE countries it usually have an important role in making SEEtakes more steps and/or more time to regis- countries more attractive to foreign inves-ter property than the OECD average. Simi- tors. Serbia, Montenegro and Macedonialarly to construction permits, it is also more are official candidates for EU membership,costly, but here the cost is high related while Albania has also submitted its appli-to the property’s value, not the country’s cation. In the case of Serbia and Montene-income level. For example, in Albania it is gro, accession negotiations have already11.1 percent of property value compared to started, which means that they will havethe OECD average of 4.4 percent. to comply with EU law, a process that should improve their institutional frame- According to the rankings, getting credit work and thus make it easier to do busi-is the region’s strongest suit. In this cate- ness in the 2 countries. In the long run, asgory the ranking measures the strength of official negotiations start, similar devel-legal rights of both borrowers and lend- opments might be expected in other SEEers, and also the depth of credit informa- countries. www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS Constructing new the reconstruction of the Vijecnica, a European capitals building from the Austro-Hungarian era which had served both as a city hall and Major cities of South-East Europe have had to face many challenges: as a library. The European Union (EU) has wars, earthquakes and the drastic redevelopments of the socialist donated €9 million since 2000 for the res- era. Today, they are trying to rebuild themselves and become modern, toration of Vijecnica, more than half of European capitals. We look at three countries, three capitals – and three the total cost of €16 million. The build- very different plans for city developments. ing is supposed to be ready for the 100th anniversary of the assassination of Arch- ÁKOS BUDAI duke Franz Ferdinand. Sarajevo: restricted development ments, mostly before the financial cri- However, urban development in the sis, with new skyscrapers opening every country is usually still restricted as a result The last two decades saw major urban year. The biggest development is proba- of the Dayton Agreement of 1995, which transformations in Balkan cities, mainly bly the Sarajevo City Centre which is the put an end to the Bosnian War. Since the fuelled by rebuilding projects. These largest commercial attraction in the coun- agreement, property transfers in the coun- projects usually intended to modern- try, providing 49,500 square meters (sqm) try are overseen by the Office of the High ize cityscapes with new residential and of shopping, leisure and office space. The Representative, which has banned the sale office buildings, often neglecting public construction, financed by a Saudi busi- of state-owned land (comprising 53 per- places. In the case of many city squares, ness named Al Shiddi, started in 2008 and cent of the entire country). This ban has real estate developers failed to maintain or after a series of delays, the centre opened been delaying the redevelopment of one build the infrastructure necessary to make in March 2014. of the city’s most iconic landmarks, the city squares pleasant public places. Jajce Barracks. Plans for the former mili- Revitalization of public squares and tary site include a €50 million luxury hotel This was the case with the capital of buildings is going much slower in Sara- by Prince Alwaleed of Saudi Arabia. Bosnia and Herzegovina, Sarajevo. The jevo. The city’s biggest public project is city has seen major real estate develop- Skopje: a newly constructed past While many Balkan countries spend huge amounts on constructing modern build- ings to distance themselves from the socialist past, Macedonia’s government SARAJEVO 2014/5–6. | www.resourceinfo.hu

 REsource ANALYSIS SKOPJE BELGRADEhas chosen a different path and turned has been done to improve the cityscape, space on 90 hectares of land. The biggestto antiquisation. In 2009, they released a many say that some designs are too over attraction of the project would be the 210video that displayed ambitious plans for the top and that “nationalistic historicist metre tall Belgrade Tower, resembling thethe city centre of Skopje, aiming to give kitsch” is being constructed. Also, many world’s tallest building, the Burj Khalifait a more classical appeal by the year 2014. questions arise about the cost of the proj- in Dubai. The area would also include aThe plans seemed unrealistic at the time, ect and about the transparency of the con- large shopping mall and a marina for lux-but now almost everything – around 20 tracts given to architects and designers. ury boats, although so far only the over-buildings and 40 monuments – is near After local elections in April, the govern- all concept has been released, individualcompletion. ment revealed that it has spent €208 mil- facility and building plans are not yet fin- lion so far on the project, but according ished. The Skopje 2014 project includes the to estimates, the total cost of Skopje 2014building and reconstruction of many could easily reach €500 million. The estimated cost of Belgrade onattractions from statues through new Water is €2.5 to €2.8 billion. According tomuseums to a triumphal arch, in many Belgrade: focusing on water Prime Minister Vucic, the project is set toarchitectural styles from baroque to neo- be completed in 2019 – the same year Ser-classicism. They are erecting as many More and more cities around the world bia plans to join the EU. Many questionspublic landmarks in just 4 years as some are rediscovering the potential that lies in were raised about the ambitious deadline,European capitals have put up in 3 cen- their waterfronts. Transforming old and the lack of a public tender, the unclearturies. dysfunctional industrial zones into lively details of the financing and the necessity areas with mixed uses has been trending of the project, but Belgrade on Water is Skopje 2014 is not just about giving for many years now. The Serbian capital fully supported by the government andtourists and locals a nice city centre. It is has one of the most ambitious waterfront the city management.also a tool to express Macedonia’s new- plans in the world, “Belgrade on Water”.found national pride, which is one of the Headed by the Serbian government, Several different projects have beenmany reasons why residents of Skopje the project aims to improve Belgrade’s planned for the banks of the Sava andhave mixed feelings about the develop- cityscape and economy. They plan to cre- Danube rivers over the last decades, butment. Some fear that putting up so much ate the “Manhattan of Serbia” by redevel- so far none of them materialised. Bel-history can have a negative effect on the oping a large flat area between the Danube grade on Water is the most ambitiousfragile state of peace in the country, torn and rail tracks. plan to date, but it is unknown when andby ethnic conflicts for centuries. Oth- how much of it will be implemented. Theers argue that turning Macedonia’s capi- A new company called Eagle Hills, fact that this project was announced atal into a “mini Las Vegas” is only a way chaired by Dubai-based developer Moha- couple of weeks before the parliamen-to distract people from the country’s eco- med El-Abbar, would develop and finance tary election usually does not come withnomic problems including high unem- the project, with Serbia contributing the a high probability of implementation, butployment and poverty. land, the government said. The Emirati according to the latest information the company plans to build 1.5 million sqm first plot should be ready for development Although after years of neglect everyone of residential, commercial and leisure by September 2014.welcomes the fact that something finally www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS Where is the holiday the 2 former countries, the sector picked home market heading? up in the 2000s, while Montenegro was discovered after it became independent in 2006. The number of nights spent by tour- ists in these countries shows a rising trend. Furthermore, according to the World Sandy beaches and nice warm summers – that’s what all tourists want Travel and Tourism Council’s (WTTC) on a vacation. But is this really enough for success? impact study, Montenegro is among the top 3 fastest growing countries. TÜNDE MADUROVICZTANCSICS Albania is still trailing its neighbors, but like the previously mentioned countries, its beaches are becoming increasingly popular T he world has become more negro is currently the latest destination still among tourists. Based on The World Bank’s accessible as travel conditions in the upturn stage. But given the shrinking data, the number of tourists to Albania has have improved and low-cost yields, which country will be the develop- increased tenfold between 1995 and 2011. flights have emerged. At the same time, ers’ next target? Albania had more than 3.5 million tourists interest in foreign holiday homes and real Albania is expected to become the next visit it in 2012, while in 2004 only 300,000 estate from Western Europeans in search holiday home target in the region. It has people visited the country. Due to grow- of relaxation has grown. The first popular all the natural endowments to make this ing interest, British Airways nad other air- destination was Spain, where real estate happen as the sandy beaches and the line have expanded its routes. In the future, was at a much lower price than proper- sunny climate attracts tourists. Also, the tourism numbers might improve further as ties back home. Conditions were basic in political situation is getting better. In 1997 infrastructure develops and a possible new the beginning, but developers discovered armed groups kept the country under con- airport in the south might help exploit the potential in the market. Soon, the profit trol after the post-World War II commu- entire country’s tourism potential. Tour- decreased due to market growth, and nist regime’s removal but Albania joined ists might be swayed by the low prices, the authorities began demanding more and NATO in 2009 and it has also submitted food and services cost only a fraction com- more from the developers. The burst of its application to the EU with negotiations pared to Western prices. Prices are 50 per- the housing market bubble experienced in starting soon. cent lower than in neighboring Croatia, northern Europe postponed the increase of Albania is following its Greece or Italy. price differences. As a result of shrinking neighbours’ path yields, developers turned towards Central The holiday home market and Eastern Europe (CEE). Among SEE countries Bulgaria’s, Croatia’s is booming Airport accessibility was a given for and Montenegro’s coastline has already Before interest in the holiday home mar- these CEE countries and low land prices been discovered by tourists. In the case of ket in Albania increased, foreigners had combined with low construction costs were the main drivers of a major con- struction boom. Additionally, CEE coun- Number of tourist arrivals to the SEE coutries (million people) tries are taking the path of European inte- 15 gration or have become member states of the European Union (EU), which further Albania Croatia increased political security. This was not Bulgaria Montenegro enough for success however, as conditions 10 had to be met in order to manage this new upsurge in interest. An increasing number of Westerners wanted to purchase proper- ties in these countries and prices started to 5 increase as a result of the growing demand. Rising prices made many people believe that purchasing properties in this region would be a good investment. 0 Holiday home investors and developers 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 first discovered Croatia and Bulgaria in the SOURCE: WORLD BANK South-East European (SEE) region. Monte- 2014/5–6. | www.resourceinfo.hu

 REsource ANALYSIS LALZIT BAY RESORTdiscovered Bulgaria’s and Croatia’s coast- 2006 and 2008, housing prices rose by an the locations with the most potential inline in 2000, alongside the boom in the annual average of 20 percent. In some spe- Europe, followed by Bulgaria, Croatia andtourism sector. After these countries cial cases they even increased by 100 per- Montenegro. However, Albania is cur-became an international investment tar- cent. In recent years, significant develop- rently 50 years behind the most popularget, the demand for apartments and houses ments have been made in the country, and holiday destinations. There are only sandyincreased. During the market surge devel- a significant number of new homes have beaches at present, but there are plans foropers had plenty of prospects, but due been built. future developments. However, developersto the growing number of investments, will continue to deal with corruption andopportunities started to decrease. In Bul- Where does Albania stand the uncertain land ownership situation.garia in 2004 land prices and construction right now?costs were very low, and the first devel- Foreign investors began to be interestedopments made great profits. Sales prices Tourism in Albania is growing, which is in the country’s real estate market in 2006.were a third or a quarter of Western ones. a major attraction for real estate devel- Properties are still significantly cheaperHowever, by 2006 land prices had signif- opment. Albania is considered one of than in Bulgaria, Croatia or Montenegro,icantly increased and so had sales prices where prices for newly built homes exceedwhich increased to €2000 per square €2000 per sqm. In contrast, an Albanianmeter (sqm) due to two-digit annual price apartment with a sea view can be pur-increases. In 2008 residential property chased for €35,000. There are positiveprices increased by fourfold compared signs in Albania indicating that the coun-to those in 2002, therefore they became try might follow Croatia’s and Montene-less competitive and the markets halted. gro’s example in terms of infrastructureA similar situation took place in Croa- and tourism developments. The first phasetia, although prices “only” doubled here. of Lalzit Bay Resort – a 49-acre develop-However the 2008 crisis put an end to the ment on the Adriatic coast, 30 kilometers“golden age” of the holiday home market from the capital Tirana – might be com-in these countries and prices have fallen pleted in 2014.significantly. Currently only properties onthe coast and which are rentable are pur- However, many have doubts about thechased by investors. Albanian holiday home market upturn. In their view, the current European envi- Another promising holiday home market ronment will not allow the country todestination is Montenegro, where prices become a major holiday destination andare still in the upswing phase. Between they believe investors might consider this emerging market as “too emerging”. www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS What does the SEE Developers first discovered Romania and Bulgaria and their European Union (EU) housing market have in store? integration process had a great role in this. From the 2000s onwards, major develop- Residential property is in demand all over the world and a key element ments started. Between 2000 and 2012 of the world economy. But what are the main characteristics of the housing stock increased by 7.6 percent in South-East European housing market? Romania and reached 8.5 million. Prices increased by tenfold between 2002 and TÜNDE MADUROVICZTANCSICS 2007. There were also huge developments in Bulgaria between 2000 and 2008. In both lthough the South-East Euro- relatively modest in the early 1990s. Despite cases, investors had very high hopes and the this, there were early entrants to the mar- promised reforms fell short and then the A pean (SEE) countries have different ket and thanks to improving quality, prices economic crisis put an end to the “golden historical backgrounds, what they started to increase. Bureaucracy has also age”. The Romanian construction industry have in common is that the Second World been an issue in the region with construc- has been struggling ever since, with devel- War was followed by 40-45 years of com- tion works completed without a permit pos- opments having stopped and prices contin- munism. This made housing markets in the ing serious problems. In Romania for exam- ually falling in the last four years. The situ- region very similar. After the regime change ple, 20 percent of the buildings completed in ation is better in Bulgaria as the number of in the 1990s, and with the arrival of the free 1998 were built without permission. housing transactions have increased this market, the housing market situation has year, although the Bulgarian market also changed considerably. The largest construc- During the transition period, the political suffered a large drop (residential proper- tion companies were privatized along with instability lead to internal and external polit- ties cost 39 percent less than they used to in a significant proportion of previously state- ical conflicts and resulted in the exodus of 2008). Prices seem to be stable and the num- owned housing stock. Contrary to popular citizens out of SEE. As a result, there were ber of construction permits rose in 2013. belief, the share of state-owned rented prop- precarious conditions in the housing sec- erties was not dominant, as only 19 percent tor and many apartments in the countryside Post-war Croatia became a popular of homes belonged in this category. There- were left empty while there was a shortfall investment and development target. The fore, at the time of the regime change, the in capital. This situation was aggravated by country’s coastline has huge potential. The share of owner-occupied properties was the outbreak of the Yugoslav Wars, which Croatian market also experienced a sharp already high. not only increased uncertainty and instabil- price increase, which was mainly contribut- Real estate development became a part ity but also lead to the destruction of a great able to the forthcoming EU accession. Sim- of the private sector, which was a radical part of the housing stock. ilarly to Romania and Bulgaria, the housing change. Due to high interest rates and low bubble burst following the crisis, and since incomes, housing development activity was After the aftermath of the war, develop- then prices have been continuously fall- ments gradually started up again in SEE. ing. The statistics show that residential real Number of construction permits in SEE Change of the population of SEE between 2004 and 2012 30000 50000 53 25000 20000 Bulgaria Macedonia 40000 15000 Albania Serbia 52 10000 Croatia 30000 51 20000 50 10000 5000 49 00 2007 2008 2009 2010 2011 2012 2013 SOURCES: CROATIAN BUREAU OF STATISTICS, NATIONAL STATISTICAL ISTITUTE OF THE 48 REPUBLIC OF BULGARIA, STATISTICAL OFFICE OF THE REPUBLIC OF SERBIA, STATISTICAL 2004 2005 2006 2007 2008 2009 2010 2011 2012 INSTITUTE OF THE REPUBLIC OF ALBANIA, STATE STATISTICAL OFFICE OF THE REPUBLIC OF MACEDONIA, AGENCY FOR STATISTICS OF BOSNIA AND HERZEGOVINA SOURCE: WORLD BANK 2014/5–6. | www.resourceinfo.hu

 REsourceestate developers are no longer willing to nia, Serbia, Albania and Bosnia and Her- The region’s population significantly ANAALYNSAILSYSISinvest, as the number of issued building per- zegovina are significantly behind the rest declined between 2004 and 2012 as 2 mil-mits has sharply dropped since 2008 as in of Europe. However, economies are grow- lion fewer people are now living in the2013 it was 32 percent lower than a year ago. ing steadily above the EU average, which is region. This is mainly due to Romania,Montenegro also turned into a main devel- a major attraction for real estate investors. where the population decreased by 1 mil-opment target after it became independent lion. The population in Slovenia, Macedo-and started the path to EU integration. The Additionally, decreasing unemployment nia and Albania has been stagnant in recentnew state suddenly found itself in the mid- and increasing wage incomes is key for years. The proportion of young peopledle of a real estate boom, which has contin- sound demand and the region is perform- decreased, although it is still high comparedued ever since. ing well in both aspects. Most of the coun- to the rest of Europe. However, due to a fur- tries had to face similar problems after the ther decrease in those aged between 18 to Many predict the next popular real estate regime change. The expanding service sec- 29 years, potential first home buyers mightdestination will be Albania. Even if based on tor could not absorb the shortfall of work generate less demand in the housing mar-the number of building permits, this is not places taking place in the industrial sector ket. In addition, unemployment is increas-a massive construction wave in the residen- in the 1990s. High unemployment rates, low ing among young people, thus solvency istial real estate market, but rather about a fall. worsening.The international market players consider employment and low labor market partici-Albania mainly as a holiday housing mar- pation characterized these young labor mar- Migration has also had a big impact onket. Bosnia-Herzegovina and Macedonia kets. However, employment has significantly the housing market as increasing numbersare currently the two poorest former Yugo- improved since then and wages have also of people from SEE are choosing to workslav States, which investors still avoid. The increased considerably. Bosnia and Herze- abroad. Therefore, they look for housing inSerbian housing market is more promising. govina is the only exception as unemploy- foreign markets. In Albania, for example,The market is growing and prices increased ment has been growing steadily since the according to a 2011 survey, 2 out of 3 youngbetween 2000 and 2010 by more than 250 crisis. The quality of the housing stock is still people want to work elsewhere. Coun-percent, although prices have fallen since poor, which could further boost demand. tries in the EU however, are mainly lookingthen by an annual rate of 10 percent in real Based on these facts, it can be concluded for qualified labor, which is a disadvantageterms. that there is plenty of demand for new mod- for Balkan youngsters with poor academic ern housing and thanks to growing incomes, backgrounds. Additionally, many EU coun-Are the others catching up? a sound demand could match these needs tries are trying to get stricter in the employ- in the future. ment of foreigners, and the current marketFor the SEE countries yet to be explored, environment also makes it more difficult inlike Albania, Serbia, Macedonia and Bos- Barriers of the housing market finding a job abroad.nia-Herzegovina, creating a stable politicalenvironment and economic security is a key An additional issue at play, is that while the What is next?pre-requisite in order for the housing mar- Western European population is increasingket to pick up. Looking at other countries, it slightly and is stagnant in Central Europe, It is clear that there is plenty of demand foris obvious that EU integration strongly cor- population is decreasing in SEE. new housing in the emerging Balkan statesrelates with the willingness of investors to although solvency is the main issue. Butenter the market. Serbia has already started what about Romania, Bulgaria, Croatia andaccession negotiations with the EU, and the Montenegro – countries which have alreadyGeneral Affairs Council will re-address the gone through the development boom? IsAlbanian status in 2014. Macedonia’s situ- there still demand for housing? The answeration is more problematic as the name dis- is definitely yes, if we look at the number ofpute with Greece is still ongoing (a region overcrowded households. Compared to thein Greece is called Macedonia) and because EU’s 17.2 percent average, 44.5 percent ofof this, the Greeks continue to oppose any the Bulgarian population lives is crowdedprogress of the Macedonian case. Bosnia- residential properties, while this is as highHerzegovina and Kosovo are for the time as 51.6 percent in Romania. Moreover, 41.1being only “potential” candidates, making percent of the Croatian population lives inthem far away from the integration process. properties where there is not enough room, compared to family size. Therefore, there For the countries being explored, another is plenty of room for residential real estateimportant question is to what extent the investments in the entire SEE region. Thedemand in the housing market is growing question is when the economic environmentand how much potential they have. Based will allow developers to take action.on national income per capita, Macedo- www.resourceinfo.hu | 2014/5–6.

REsource SPONSORED ARTICLE Prices hit a record low on the Hungarian housing market Due to the continuous falling of prices, Hungary now has one of the least expensive housing markets in the European Union. The low price levels favor buyers, and the decreasing interest rates on mortgage loans and increasing government support are now coupled with a modest new housing supply. The FHB House Price Index provides a deeper understanding of Hungarian housing market processes, providing an accurate picture of the current price levels and predicting future trends. How did Hungary become course in 2003. In the following years only a in decreasing turnover for used homes than in the cheapest? 4 percent rate of increase was seen as at that a decline in the number of newly built ones. point the price increase was just keeping pace FHB’s House Price Index covers residential with the rate of inflation. Despite tightening Low price levels market events over the past 15 years. With this control over the system of subsidies, compe- in the European Union information, we can divide the decade behind tition in lending was able to maintain its level us into four distinct eras. The first period, from of demand for a few years, with the volume of Since 2008, the trend has been clear: nominal 1998 to the end of 2000, represents a radical loans granted on par with the previous period. housing prices in Hungary continue to decline, thus, we have been experiencing a downward Annual change of the FHB Index in nominal terms (%) FHB Index from Q1 2000 to Q4 2013 50 (2000 = 100) 45 40 250 FHB Index real 35 FHB Index nominal 30 25 200 20 200 15 10 150 155 5 80 0 100 -5 -10 50 -15 0 Source: FHB 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1998 q1 1998 q4 1999 q1 1999 q4 2000 q1 2000 q4 2001 q1 2001 q4 2002 q1 2002 q4 2003 q1 2003 q4 2004 q1 2004 q4 2005 q1 2005 q4 2006 q1 2006 q4 2007 q1 2007 q4 2008 q1 2008 q4 2009 q1 2009 q4 2010 q1 2010 q4 2011 q1 2011 q4 2012 q1 2012 q4 2013 q1 2013 q4 Source: FHB increase in both nominal and real prices. Over After the subsidies were withdrawn, foreign trend for the last six years. Thanks to this, Hun- the period of three years, the value of homes currency loans, at that point featuring lower gary now has one of the lowest average prices increased by 132 percent and their value interest rates, became much more popular – in the European Union (less than € 1,000/ adjusted for inflation almost doubled. Favor- and thus began the population’s foreign cur- square meter) as well as a very modest number able changes in the economy were responsi- rency indebtedness. This long upward trend of newly built homes. Hungarian prices are con- ble for this trend. The upward trend in residen- was about to change at the end of 2007 when, sidered low even for the CEE region. tial prices continued between the beginning suddenly, several important residential market of 2001 and the end of 2003. Yet, compared indicators began to point in the same direc- Recently, however, several factors that influ- to the above, it was much more sedate, with tion: supply was saturated, demand decreased, ence the housing market have begun evolving an average 11 percent increase in value, when the available income (that had at first leveled in a positive direction in Hungary. For one, the adjusted for inflation. Demand increased since off ) started decreasing, and there were an government is supporting home purchases discounted financing faced a revitalized sup- increasing number of reports from abroad more actively through various measures. ply, as new home construction also started declaring the end of the real estate boom. Meanwhile, it seems that the Hungarian econ- increasing from 2001 onwards. The system of omy is slowly beginning to recover. Though subsidies became untenable for the budget by In the FHB Home Price Index’s historic time- not spectacularly, the economy has at least 2003 and the first stringency measures took line, the peak value is located in the first quar- started to grow. Thirdly, interest rates have place at this point, likewise affecting the price ter of 2008, where the gradual decline in home been steadily decreasing over the past year. of homes. prices begins. Compared to the then-highest The Hungarian National Bank (MNB) has low- residential price levels, national averages were ered its rate to a record low (2.50 percent on The reigning in of the subsidy system had 6.3 percent lower in 2009. The gradual decline the 30th of April 2014). In addition to all these an effect on the residential market with home in residential prices took place alongside a positive factors, the Hungarian housing mar- values’ steep upward trend finally breaking decrease in turnover, which was more visible ket has accumulated a considerable amount of 2014/5–6. | www.resourceinfo.hu

 REsource Change of the house price index on the strongest Price changes in certain counties of Hungary SPONSORED ARTICLE submarkets and the FHB House Price Index (2008=100) 10%105 Győr-Moson-Sopron 5%100 Price changes (2010-2013, %)0% 095 20 40 60 80 100 120 140 160 180 200 -5% Bács-Kiskun Tolna Hajdú-Bihar90 -10% Zala Vas -15% -20% Csongrád SomogyPest Budapest -25% SzSz-Bereg Veszprém85 Nógrád Békés FHB House Price Index M4 area Fejér80 Towns close to motorways Western Hungary Jász-Nagykun-Szolnok Heves Baranya Komárom-Esztergom Balaton Budapest Downtown75 Borsod-Abaúj-Zemplén 2008q1 2008q2 -30% Average price/sqm in certain counties of Hungary (’000) 2008q3 2008q4 2009q1 2009q2 2009q3 2009q4 2010q1 2010q2 2010q3 2010q4 2011q1 2011q2 2011q3 2011q4 2012q1 2012q2 2012q3 2012q4 2013q1 2013q2 2013q3 2013q4 Source: FHB, REsource Source: FHB, REsourcepostponed demand, since the number of sales ing the current situation in the housing market accurate data, as well as high-quality realtransactions has been quite low over the last are not very positive, there is already a sense estate consulting services are vitally important.six years. of movement, and in fact there are submar- kets where change is imminent. The geo- FHB offers much more than a basic nation- The so-called First Home Buyers segment – graphical breakdown of data from the FHB wide housing price index. Alongside theanalyzed separately by FHB – will profit from House Price Index also highlights that there indexes that are published quarterly, FHBthis. Thanks to increasing income and more are significant differences between the various offers its clients access to updates on a rangegenerous state subsidies this segment has submarkets. Average national trends do not of detailed indicators. These indicators allowmore favorable entry opportunities, and the apply consistently in all regions. The national us to give detailed breakdowns in terms ofHungarian housing market has become more market is clearly polarized, with positive (Győr- region and property type. This means our sub-affordable. Moson-Sopron) and negative (Borsod-Abaúj- scribers receive tailor-made analyses of the Zemplén) extremes in the counties. evolution and/or the current situation of aTo whom is the House Price specific housing market segment, accordingIndex useful? In the same way that various submarkets to their business and strategic needs or their reacted differently to the crisis (weaker mar- interests.The FHB House Price Index and its associated kets suffered more), change is also going toreal estate professional services are useful to all happen in different ways. The strongest sub- FHB also produces forecastseconomic entities that are in any way related markets will be the first to improve, so firstlyto the housing market. An adequate under- positive changes are expected in the highly FHB has launched another unique service,standing of the market is essential to making developed areas of Western Hungary, in the beside the House Price Index: the FHB Housesensible, solid decisions. This applies to every inner districts of downtown Budapest, and Price Forecast. It includes a one year forecastdeveloper, financial institution, agency, or fund in the cities that can be reached within two and is updated every six months. The methodmanagement firm dealing in real estate. hours from Budapest by motorway (Győr, used in forecasting is based on three pillars. Kecskemét, Székesfehérvár, Szeged and Sze- First, based on Hungarian and international For example, if a developer plans to launch kszárd). The outlook is also more optimistic experience a certain correlation was identi-a housing project on a given site, it is crucial regarding real estate in Budapest with con- fied between selected macroeconomic indica-they have an understanding of the immediate nections to the Kelenföld railway station and tors, financial and credit market indicators andand wider implications relating to the devel- metro 4, and in cites near Balaton. At the the sales volume and prices of housing. Second,opment area’s environment and that they be same time the Index also shows that the value FHB also uses verified local assessments for itsable to identify the trends associated with the of flats and houses in the eastern counties forecasts.planned development type. In fact, this infor- decreased further, and that they are increas-mation is not only essential for the developer, ingly threatened by forced sales. Another In addition, other empirical facts, obtainedbut also for the bank that is funding the proj- important factor is the proportion of force- from the analyses of other real estate crisesect, since an essential understanding of the sold real estate in each submarket, because cannot be ignored either. Thus the experi-market plays an important role in the final this figure is a good indicator of the tenacity ence gained from similar international crisesdecision to finance it. Last but not least, this of a certain market. and related observations are also built into theholds true for the real estate agencies as well: model. FHB’s projection model not only pro-a realistic pricing strategy is key to the success The current situation reflects a sensitive vides information about the future develop-of a new residential project. Without an intri- stage in the real estate market cycle, where ment of housing prices, but also takes into con-cate knowledge of the market, this is impos- detailed breakdowns of comprehensive and sideration the dynamics of the prices given thesible. While the nation-wide statistics regard- modifying effect of the crisis. www.resourceinfo.hu | 2014/5–6.

REsource SPONSORED ARTICLE First-time buyers and investors could kick-start the market People buying their first home and buyers looking for investment and leasing opportunities could help the real estate market get out of the depression that has been characterizing the market for years now. The macroeco- nomic environment is now offering more support to the market in terms of economic growth, low inflation, and record-low interest rates. The economic crisis that started in 2008 still wages has been coupled with a growth in real mate the average net income for each city by affects the markets and market players have wages. Should these trends remain unchanged deducting the tax per taxpayer by the tax base inevitably prepared for a slow recovery. The and employee expectations remain optimistic value per tax payer, this means those in Buda- trends, however, have varying effects on house- (that the trends will hold), then this could have pest must work longer (approximately one and holds in different situations. FHB is paying spe- a notable impact on the demand for residen- a half months) for each square meter (sqm) of cial attention to the first-time, young homebuy- tial real estate. Taking into account the corre- property. Whereas both wages and housing ers demographic, which is one of the reasons lation between personal income and housing prices are typically higher in Budapest than in it started analyzing the situation for first-time prices, FBH’s First Home Buyers report can con- the other parts of the country, the difference home buyers in 2011. The web diagram analy- clude that lower prices combined with growing in housing prices, compared to other Hungar- Affordability: Average price per sqm /average monthly wage First Home Buyers 2.2 Home prices compared to wages 2.0 1.8 Labour market Available 1.6 opportunities state subsidies 1.4 1.2 Inflation Financing, loan conditions 1.0 2013 2010 2002 Source: FHB 2000 (The further from the center the better the position on the graph) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: FHB sis, featuring the five most important aspects of income has indeed put home buyers in a much ian cities, is greater than the income difference. such sales, shows that the situation in 2002 was more favorable position. In 2010, the average price per sqm in Budapest completely different than it was in 2013. Replac- was around HUF 255,000, while the average ing the importance of the subsidy system, it is Namely, the lower the index and the shorter monthly net income was around HUF 165,000. now lower interest rates and more affordable the period necessary for raising the capital In comparison, the average price and average flat prices that influence a young families ability equivalent to one square meter of flat prop- monthly income were almost identical in Mis- to buy their first home. Compared to 2010, the erty then the greater the chances buyers have kolc (price/sqm was estimated at around HUF new indexes indicate the situation has clearly to reach a successful transaction. The improve- 130,000, while income/month was around HUF ameliorated. While decreasing prices have ment gauged from last year to this year can be 134,000). affected current homeowners unfavorably, they attributed to two factors: increasing personal are also offering better opportunities to buy- income and a 2 percent drop in housing prices. If we employ the above-mentioned data, ers. In addition, interest rate subsidies and the we can also calculate an average-sized flat’s “socpol” (the Hungarian state subsidy for fami- Trends for major cities worth in working months. In the case of a 60 lies with children) for new-builds have eased sqm Budapest flat, we would have to work the burdens of the first few years for first-time While the trend is beneficial for first-time home for 92.4 months (or over 7.5 years) to be able buyers. buyers nationwide, it also has had an interest- to buy the flat (if we don’t spend on anything ing impact on some of Hungary’s larger cities else), whereas in Győr it would take a little over Household incomes are improving (for example, for Budapest, Győr, and Debre- six years and in Szolnok or Miskolc it is only five cen). Namely, major cities have seen a strong years or even less. Low inflation caused a 1.9 percent increase decrease in buying power: ever since 2004, one in real wages, compared to the same quarter has to work less per each square meter of prop- The data indicated here is especially impor- in the previous year. Thus, the increase in net erty, but one must work longer in big cities than tant for first home buyers that are newcomers one does in towns and villages. Since we esti- to the property ladder and, therefore, not nec- 2014/5–6. | www.resourceinfo.hu

 REsource State subsidy for a typical home (with a HUF 10 M loan) property doesn’t exceed HUF 15 million, only SPONSORED ARTICLE half of the normal duty is charged. Currently,4,500,000 buyers under 35 can now ask for a 12-month installment scheme in order to pay off the tariff,4,000,000 however, as of next year, every first-time home buyer will be entitled to this payment option.3,500,000 There are also numerous international exam-3,000,000 ples of subsidies provided for this segment of the population. In some countries, these are2,500,000 tied to central government policies. In others, they are the result of local government policies2,000,000 requiring a single mortgage bank to provide discounts. Overall, when compared to the range1,500,000 of examples and sample solutions, the Hungar- ian subsidy system clearly provides a broad1,000,000 range of favorable opportunities to buyers.500,000 Subsidies and economic growth can lay the groundwork for change0 Recovery from the economic crisis and incentive 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 systems can together provide the long awaited turn for the housing market. For FHB Bank, one interest rate subsidy \"szocpol\" (subsidy for families with children) of the greatest signs of an upswing is the grow- ing demand for loans. The second most pow- home savings account subsidy tax deduction erful indicator is that investors and first-time homebuyers are representing a greater number Source: MNB, Portfolio.hu of clients on the buyers’ side. FHB Ingatlan Zrt’s real estate broker branch reports that 25-30 per-essarily able to finance their first property by Lending volume has increased and mortgages cent of potential enquirers come from privateselling a previous one. For many, the lending totaled HUF 14.5 billion in March 2014 (ver- individuals seeking their first home. For many,environment is especially important to them. sus HUF 9.2 billion in March 2013). Further, we their final decision to buy or not is often hinged expect these trends to continue for the remain- on their financial limits, so, the introduction ofHome loan interest rates continue der of the year. the so-called “half-socpol” subsidy could veryto decline well give some potential buyers a real boost. Subsidies are diverse, After the significant drop in rental rates experi-As the rate of inflation drops, so do deposit and but not just in Hungary enced up until around 2010, rates for residentialmortgage rates: subsidized home loans are cur- property in more popular locations have nowrently available for interest rates starting as low It’s not unusual for first-time home buyers to risen demonstrably. Considering this along-as 6 percent. For example, FHB’s State Subsi- get special attention from the government and side available gross yields of 8 percent (or evendized Loan scheme is available at a starting other market players. They are often the targets more) on the rental housing market, clearly jus-interest rate of 6 percent, with an annual per- of programs designed to facilitate home buying. tifies (in addition to first home buyers) inves-centage rate of charge (APRC) of 5.86-8.45 per- FHB has analyzed the value of available subsi- tors and rental market buyers also choosing tocent. dies for a typical home loan for a typical fam- buy now. As oversupply slowly decreases and ily throughout the years and found that 2004 the economy’s fragility slowly buffers, housing Considering the typical 15-year duration of was the last time when the situation was more prices are expected to drop even further thisa mortgage, a low-interest environment means favorable for first-time home buyers than it is year. Uncertainty remains regarding the abil-that each installment will represent a more mod- right now. ity of debtors to pay their debt, forecasting aerate burden for first-time home buyers. We can prolonged and slow turnaround. However, thesay that the opportunities provided by taking “Socpol”, the Hungarian state’s non-refund- role first-time buyers, rental market buyers, andout a forint-based loan (free of currency risk) able subsidy for home-building or the acquisi- investors play could very well have a positiveare not substantially different from the opportu- tion of newly-built homes, provides a maximum influence in the way things turn out.nities that foreign currency loans used to offer amount of HUF 3.25 million to families or cou-when they dominated the market in the middle ples planning families: the amount of the sub-of the last decade. The available subsidies are, in sidy increases depending on the number offact, even brighter in the overall picture. children (or planned family size). In addition, families can rely on the support available from Most likely due to favorable subsidies and the savings and loan banks. From January 2013,positive interest rate trends, the recovery of the the duty tariff decreased for first-time homeloans markets we began to see in the first quar- buyers under the age of 35. If the price of theter of the year has slowly maintained course.FHB INDEX ZSOLT MOLNÁR DR. GYULA NAGYURL: www.fhbindex.hu Vice-managing Director FHB Mortgage Bank Nyrt.E-mail: [email protected] FHB Real Estate Zrt. FHB Index Project ManagerAddress: 1082 Budapest, Phone: +36 (1) 452-9208 Phone: +36 (1) 452-5930Üllői út 48. Mobile: +36 (30) 748-3913 Mobile: +36 (30) 964-6087 E-mail: [email protected] E-mail: [email protected] www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS A region of missing In order to improve and increase growth connections in Balkan economies, development of the motorway network is needed, but so The road network in South-East Europe (SEE) is in bad condition with the far no such plans have been forthcom- motorway network being fragmented and incomplete. The most impor- ing. In Bulgaria at least, something has tant north-south and east-west corridors are yet to be built but continu- started with the launch of a construc- ous developments give us reason to be optimistic. Great potential lies tion of 2 motorways connecting the cap- in the Balkans and with the right infrastructural developments, it could ital with the sea. However, this construc- turn into a favorite region for investors. tion mostly benefits inland traffic because the transit route crosses the country in a IVÁN HÁMORÁKOS BUDAI north-south direction, but that route also leads through Romania. After these 2 P ast ethnic tensions in the Bal- on motorway. In a south-westerly direc- countries became members of the Euro- kans have resulted in an inability tion the M7, and the M70 stretch to the pean Union, many carriers chose to travel to cooperate and this is only one Croatian and the Slovenian border, respec- across them, because this way they could limitation in the region’s economic devel- tively. Some sections of motorway are still get rid of a lot of documentation, but this opment. Another major obstacle is the needed to reach Romania and Ukraine, but was at the cost of increased transport time. lack of infrastructure necessary for inves- Ukraine currently has bigger problems to Except for a few bypasses around cities tors. The condition of the road network deal with. which are part of a planned nationwide and the lack of motorways are also major network, the only completed motorway in problems. Trucks, that transport goods from and Romania is located south of the Carpathi- The fact that countries in the SEE region to Asia Minor through Hungary and the ans and east of Bucharest. Several foreign do not, or barely have any motorways countries of the Balkans have to face with investors, including Renault, have already causes significant damage to their econ- the fact that the speed of travel is signif- pointed out this deficiency of the country omies and impacts transit traffic as well. to the government. The French company Even when motorways are present, they icantly slower in their region. This nega- also hinted the possibility of manufactur- are not linked with neighboring countries tively impacts the countries in the region ing future Dacia models in other countries. to form a network. What they all have in as well as transit traffic. Non-existing An investor's “warning” or suggestion of common is the use of tolls. In order to motorways are sometimes called express- this type reveals a lot about the relation- understand the seriousness of the situa- ways to justify a toll payment and are often ship with the given country. tion, we only need to look back to Hun- dangerous. Traffic jams are frequent, and gary 8 or 10 years ago. The only Hungar- by setting unreasonable speed limits, local In terms of kilometers, Croatia is the ian motorway to reach the border was the authorities create a great source of income best in the region. The Croatian motor- M1 in the west, and the capacity and qual- in the form of speeding tickets. way network is connected to the Hungar- ity of the M0 meant accidents were guar- ian and Slovenian motorways and thereby anteed to happen on a daily basis and to the European networks. However, a big meant hours of waiting for numerous cars problem is the lack of south-eastern con- and trucks. Anyone heading east or south nections. Croatia’s most important motor- soon realized that after only a few kilome- way has been built parallel to the coastline ters the motorway suddenly ended and to serve the needs of tourists and is not that they had to continue their journey on expected to reach neighboring Montene- a two-lane road. Thankfully this period gro for quite some time. is over, and even if the price per kilome- ter was not the lowest, motorways have Hungary’s southern neighbor, Ser- reached or almost reached the borders. In bia has a relatively extensive motor- the direction of the M1, M0 and M5 which way network, although it often does not handle the biggest transit traffic, Röszke, meet European standards. This network the Serbian border station can be reached is linked to countries with a connection on the other side, Croatia and Hungary. The most important Serbian motorway crosses the country from north to south, but there is a long section missing in the south close to the Macedonian border. The north-south motorway in Macedo- nia is more or less complete, but further 2014/5–6. | www.resourceinfo.hu

 REsourcesouth the missing parts of the Greek net- but for now they are not planning to estab- eral delays, the construction of the first ANALYSISwork means it is not possible to travel on lish links to other countries. The common motorway that will cross the country willa motorway from Budapest all the way to motorway is less than 300 kilometers long start this year. The 169 kilometer long sec-Thessaloniki. and is not yet complete. A 77 kilometer tion will be funded by the Chinese and it long section in Kosovo has already opened is expected to be one of the most expen- The situation is even worse in the other and cost €1.13 billion which is nearly equal sive European motorways of all times. Thecountries of the former Yugoslavia as to the total annual budget of the state at planned costs will reach €809 million pri-they do not have motorways in the Euro- €1.5 billion. The high construction costs marily due to the special ground condi-pean sense of the word. Even the express- suggest corruption is significantly imped- tions in Montenegro and 40 percent of theways are full of level crossings, which is a ing the infrastructural developments of the motorway will consist of tunnels, viaductsmajor limitation for foreign capital as well region. and bridges. The route connecting the Ser-as domestic investments. Due to ethnic bian border with the popular coastal holi-tensions the two countries with an Alba- The only country in SEE without a day destination of Bar will include 42 tun-nian majority, Albania and Kosovo, have motorway is currently Montenegro. How- nels and 92 viaducts and bridges.decided to build a connected motorway, ever, according to plans, and after sev- Motorways in South-East EuropeZagreb Belgrade Bucharest Sarajevo Sofia Podgorica Pristina Skopje Tirana Road network Paved roads Motorways (km) Country (km) (%) existing under construction Albania 18,000 72% 170 24 Bosnia and Herzegovina 22,926 85% 53 64 Bulgaria 44,033 99% 620 154 Croatia 29,410 85% 1,254 27 Kosovo 6,955 26% 77 25 Macedonia, FYR 14,038 68% 259 72 Montenegro 7,763 69% 0 0 Romania 84,185 59% 636 148 Serbia 44,248 63% 688 152 SOURCE: CIA WORLD FACTBOOK www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS Railways in SEE – a new 56 km extension to the Bulgarian poor prospects border is under construction. This would be part of a Pan-European corridor con- The state of infrastructure can be a crucial determining factor for all necting Albanian and Bulgarian seaports. sorts of developments in a country, including real estate developments. Together with another corridor project, the Railways can connect people and properties, so we took a look at rail Macedonian state plans to spend €900 mil- networks in South-East Europe (SEE) and found that in the past two lion up until 2017 on railway infrastructure decades declining passenger traffic has been a common problem in upgrades. the region, while increasing freight traffic has come as a surprise in the region. Montenegro has the smallest network in the region, with only three lines. One ÁKOS BUDAI of them is used only for freight transport. An additional passenger transport line was T he main reason behind improv- In Albania, where the existing infrastruc- only reintroduced after an extensive recon- ing freight numbers is that most ture has been upgraded, drivers often have struction project between 2006 and 2012 of these countries are highly to drive slowly to avoid accidents due to which saw operating speeds reaching 100 dependent on imports and railways pres- people trespassing on the lines. In Bosnia km/h. ent a relatively cheap way to import goods. and Herzegovina, a country deeply divided Also, due to their geographic position many by ethnic conflicts, the fact that there are Serbia is trying to modernize its railways. Balkan countries serve as transit countries two regional state owned railway compa- In 2010, the European Bank for Recon- and privatization after the dissolution of nies complicates things. Croatia has the struction and Development (EBRD) gave Yugoslavia has improved rail freight com- most dense railway network in the Bal- the state railway company four loans in panies. The region’s railway infrastructure kans, but the country has been focusing too support. Several new Russian trains were is aging, it is in poor condition, it is a very much on building a motorway network and ordered and results showed that passen- slow way to travel and combined with the only the most important railway lines that ger usage skyrocketed on lines operated lack of attractive coaches, this makes rail- have a role in Pan-European traffic have by the new trains. Last year, Serbian Rail- ways an unattractive choice for travelers. been upgraded in the last 20 years. ways signed a contract with Stadler for the The average speed of trains in the former acquisition of 21 new passenger trains to be Yugoslavia is less than 50 km/h. The aver- Kosovo is the newest entity in the Bal- delivered between 2014 and 2016. Railroad age age of train cars is 30 to 45 years, and kans and its railways are in a surprisingly tracks are also under reconstruction and as a result railways are not fuel efficient good shape, despite limited maintenance. new tracks are being built. and are often unreliable. Although most This is due to low traffic. The average train countries in the region have implemented speed is 70km/h, higher than the regional The European Union helps… railway reforms over the last two decades, average. Still, there are problems. Kosovo progress is very slow. Also, rail companies Railways have less than 20 passenger wag- Changes in railway management structure often struggle to find the financial sources ons (all donated by Sweden and Austria) were made in most SEE countries to com- necessary to improve existing conditions. and after the country declared its indepen- ply with European Union (EU) laws and dence in 2005, rail services in the northern to increase effectiveness. National railway Fragmented networks part of the country to neighboring Serbia companies were usually split into two sepa- were discontinued. According to the Euro- rate joint stock companies—a public enter- The former Yugoslavia used to have an pean Commission Liaison Office to Kosovo, prise in charge of infrastructure manage- extensive railway network, but after new the country has ambitious plans to improve ment and a transport company in charge of countries came into existence, they formed its railway infrastructure, including the passenger and freight operations. their own railway companies, ending electrification of existing and the building decades of integration. Due to this, most of new tracks. Unlike Balkan countries, Romania national networks are isolated in SEE. Ser- started its transition to a market economy bia is the only country in the region that Macedonia serves as a transit country, so with one of the largest, most dense and has railway connections with all neighbor- its railway companies are highly dependent most frequently-used railway networks in ing countries. on international freight traffic. In order to Europe. However, conditions severely dete- improve its position as a transit country, riorated during the 1990s. In the 2000s, Romanian railways improved significantly as a lot of money was spent on modern- izing rolling stock and extending the Inte City network. As part of a major reforms package, parts of Romanian railways were privatized by divesting certain operations to private com- 2014/5–6. | www.resourceinfo.hu

 REsourceSustainability is gaining value – the green approach of Laurus Offices SPONSORED ARTICLESustainability and environmental consciousness ronment have a beneficial impact on the image of transport connection to the facility, the direct accesshave become decisive factors on the office market the owners, the lessors and the tenant companies as to metro and other public transportation and theglobally. Tenants’ needs as well as development con- well. Thanks to these factors, all office buildings cur- cyclist-friendly infrastructure allows for reaching thecepts are following this trend in Hungary too. It is a rently under development in Budapest have applied offices through environmentally friendly modes ofcardinal issue as buildings account for more than 40 for one of the green certifications, and after deliver- transport and this contributes to the environmen-percent of the world’s energy consumption and their ing the currently developed buildings, the propor- tally conscious use of the office.heating, cooling and lighting is responsible for 25 tion of green certified office space will increase topercent of total carbon dioxide emissions. While the around 10 percent within the speculative office stock The building complex was built by followingenergy and environmentally conscious approach is in Budapest. the latest European energy requirements and usesprimarily in the interest of society, it can also bring modern technical solutions such as thermal insula-increasing financial and business benefits for devel- Laurus Offices: the office building with the high- tion technology, noise and heat protection on theopers, operators as well as tenants. est post construction certificate in Budapest facades which is more efficient than current stan- Delivered in 2011 and built with energy efficiency, dards, external electronically controlled solar shades,Environmental consciousness can be a mutual environmental protection and creating the optimum active environmentally friendly interior design mate-benefit working environment in mind, Laurus Offices was a rials, and thermal bridge free structures. “One of theAccording to some studies conducted in Western pioneer in this regard on the Hungarian market. This major advantages of the building complex is theEurope, more than 50 percent of tenants already con- was one of the first office developments in Budapest detailed energy measurement system which notsider sustainability criteria when choosing a build- that paid special attention to sustainability consider- only helps to keep operational costs low but alsoing, and for 25 percent of them these aspects are ations. Accordingly, it was also one of the first proj- acts as an incentive to save energy by measuringexpressly among the decisive factors. Sustainability is ects in Hungary to receive a “very good” interna- tenant spaces individually. In addition to the mod-getting in the focus for tenants in Hungary too. There tional post-construction certification from Building ern HVAC systems, there are other solutions to serveis a strong demand for environmentally friendly and Research Establishment Environmental Assessment energy efficiency. For example the external motor-cost efficient green offices on the market. An impor- Methodology (BREEAM). “During the development ized shades decrease cooling needs, while the suf-tant advantage of green offices is the lower opera- of the building complex we focused maximum atten- ficient number of windows that can be openedtional cost which results in significant savings in the tion on energy efficient solutions, ergonomic design, enable the natural ventilation of office spaces,” saidlong run, even at a slightly higher lease fee. energy consciousness and the use of passive systems. Gábor Lipcsei, the project director at ÓBUDA Group These were our main considerations,”said Ágnes Vuk, responsible for certifying the building, as he high- Today sustainably developed real estate still rep- the project leader of Laurus Offices. The convenient lighted a few of Laurus Offices’unique solutions. Theresents a considerable competitive advantage on the design of the three separate buildings offers flexibil-domestic office market, but for future developments ity and the possibility of full customization for ten-compliance with one of the certification systems is ants: dividable spaces; outstanding floor-to-ceilingalmost a requirement. This competitive advantage is height; windows with light filtering glass that can behelping developers and lessors in several ways. It is opened in every room; ventilation systems with con-easier to find tenants for a certified, environmentally trolled and treated air and the unique floor lampsconscious office building, and buildings developed have energy efficient light and presence sensors towith sustainability in mind are definitely more attrac- increase sustainability. Bathrooms and tea kitchenstive to investors on the market. The tenant mix of are fitted with water efficient systems, waste is man-green offices can be more beneficial as it usually con- aged selectively and the inner green area serves thesists of international firms with a solid background improvement of the ecological quality. Thanks to itsthat follow the direction of the parent company and groundbreaking solutions, currently Laurus Officesidentify themselves more with the principles of social has the highest post construction certification inresponsibility and environmental consciousness. The Hungary which reflects the completed state of thepositive return is that the efforts to protect the envi- building, added Gábor Lipcsei. KIADÓ IRODÁK OFFICES TO LET +36 (20) 926 3068 +36 1 327 2050 www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS Despite all of this, there are still major cuts is that many countries subsidize inter- problems with Romanian railway infra- national passenger traffic less and charge panies. The number and the share of these structure. For example, some rural routes fees from rail stakeholders for the use of companies have continuously increased in Bukovina still use rolling stock from the railway infrastructure. since 1999, especially in freight transport. 1940s. In April 2013, under pressure from In 2010, the market share of private freight the International Monetary Fund (IMF) Railway routes to the Western Balkans railway companies was about 50 percent, to reform the state sector, the government and Western Europe were suspended after which puts Romania first among EU mem- offered to sell a 51 percent stake in CFR Croatian Railways introduced a €700,000 ber states. Marfa, the state’s freight railways business. annual access fee. This was too expensive The sale was supposed to happen by Sep- for Serbian and Bosnia and Herzegovina In 2012 the EBRD extended a €175 mil- tember 2013, but due to conflicts with the railways. The situation is similarly disap- lion loan to Romania’s state railway com- Transport Ministry, the deadline has been pointing in other SEE countries. Albania’s pany to back further reforms. The invest- pushed to 2015. only international rail link to Montenegro ment enabled Romanian railways to has only been used for freight transport for restructure its balance sheet by repaying its Neighboring Bulgaria’s rail network also many years. Even Bulgaria suspended inter- short-term liabilities and thus free money has its advantages as it has a high level of national passenger services towards neigh- for vital investments and maintenance electrification, at 68 percent, compared to boring Greece and Macedonia as of 2011. works. the EU average of 52 percent. Thanks to their EU membership, Bulgaria and Roma- The only promising spot in the region is nia are traversed by many Trans-European Romania, where the state-owned railway Transport Network (TEN-T) rail corridors, company is opening up new international which present opportunities for future lines. Firstly they improved train services to infrastructure improvements, financed by Hungary and Serbia. New routes to Bulgaria the EU. have been operating since May 2014 as the second bridge between Romania and Bul- ...but Europe is getting garia opened last year. further away What’s next for SEE railways? The region’s Citing economic difficulties and low pas- countries share common characteristics senger numbers, railway operators in SEE including modest size and a fragmented rail- have cancelled more than 45 international way service, so experts believe that infra- routes since 2012. The real reason for these structure problems would be best addressed through cooperation and common solutions. Length of rail- Railway den- Electrified State support ways (km) sity (m/km2) tracks (%) (% of GDP) Albania 447 15.5 0 0.1 Bosnia and Herzegovina 1,017 19.9 76 0.2 Bulgaria 4,070 36.7 68 0.6 Croatia 2,723 48.2 41 1.1 Kosovo 430 39.4 0 0.1 Macedonia, FYR 925 36.0 34 0.2 Montenegro 250 18.0 90 0.3 Romania 22,298 45.2 76 0.6 Serbia 4,092 46.3 29 0.5 SOURCE: THE WORLD BANK 2014/5–6. | www.resourceinfo.hu

SEE PROPERTY FORUM Belgrade 2014 29th May 2014 Hotel Metropol, Belgrade, Serbia INTERNATIONAL PROPERTY CONFERENCE FOCUSING ON SOUTHEAST-EUROPE International speakers, most important local decision makers Bulgaria, Croatia, Romania, Serbia - All markets covered in one day SPEAKERS AT THE CONFERENCE:Andrew Peirson MRICS, Managing Director - SEE, JLL Philip Evans, CEO, TriGranit Management CorporationDr. Nicholas Spiro, Managing Director, Spiro Sovereign Strategy Stevan Lojovic, Country Manager, Bluehouse Capital, SerbiaDanijela Ilic FRICS, President, National Association of Valuers of Serbia Mike Murrell, Regional Director, Asset and Property ManagementRadu Boitan FRICS, Chairman, RICS Romania (Bulgaria, Hungary & Romania), AIG LincolnMichaela Lashova MRICS, Partner, Forton Bulgaria Svetla Parmakova MRICS, Head of Collateral Management Department,Tim O’Sullivan MRICS, Head of Capital Markets SEE, CBRE Raiffeisen Bank BulgariaÁkos Fischl MRICS, Head of Department, OTP Mortgage Bank Bogdan Macarie, Development Director, TriGranit Development CorporationNikola Senesi MRICS, Managing Partner, Wolf Mcgill László Csiki MRICS, CEO, Adama - Immofinanz GroupRudolf Riedl MRICS, Managing Director for Serbia, Raiffeisen Evolution Stela Dhami, Managing Director, Colliers AlbaniaAnton Lezhja MRICS, Country Director, Deloitte Albania Claus Graggaber, Managing Director, Erste Group ImmorentMaho Taso MRICS, Partner, Prostor, Bosnia-Herzegovina Nebojsa Nesovanovic MRICS, Head of Valuation - SEE, JLLDr. Róbert Hermán MRICS, Acquisitions & Investments Petar Brajovic, Head of Collateral Management Unit, UniCredit Bank SerbiaDirector, Portico Investment Tamás Ádány, CEO, OTP Real EstatePARTNER: SPONSORS: MORE INFORMATION AND REGISTRATION: www.portfolio.hu/en/events y [email protected] Phone: +36 1 327 40 86 y [email protected]

REsource ANALYSIS Poland and Czech investment dominate CEE The investment strategies of international investors with regard to the Central Eastern Europe (CEE) region could best be described as varied, reflecting the very different“sentiment”of investors to the countries in the region. DAVID LAWRENCE A lthough investor interest in ing and other potential large volume deals best-in-class assets and Budapest has come CEE is generally regarded as ris- due to come to the market. So the market back onto the radar in the search for strong ing, a clear gulf exists between is up, activity is there, the volume is there value characteristics. We are also experi- Poland and the Czech Republic and rest and investor demand is there. The weight encing growing investor demand for first of CEE, where investors are taking a more of capital is still looking at Poland where or second generation offices that are in cautious approach. However, there are I expect an increase in investment vol- excellent locations within Prague and War- signs that investors are again examin- ume based on transactions currently at an saw and have the opportunity to be reposi- ing possibilities in Slovakia, Hungary and advanced stage and deals that will be com- tioned. This will be a strong trend for the Romania as they provide a yield premium ing through or are out in the market. Vol- next 24 months. We can say that the office on Poland and the Czech Republic and umes for the Czech Republic will be at a sector continues to be the dominant sector invest grade product is becoming increas- similar level to last year or will increase if a for investment activity in 2014,” said James ingly difficult to source. In general, the CEE big volume deal goes through,” commented Chapman, Head of Capital Markets for region is facing competition for investment Mike Atwell, Head of CEE Capital Markets CEE region at Cushman & Wakefield. funds from a resurgent southern Europe at CBRE, who acted on the deal. and Ireland, countries that are recover- In what is described as the “largest sin- ing from the eurozone crisis and offer pre- With the “weight of capital” looking at gle asset transaction in the Prague office mium product at discounted prices. Poland the country is expected to equal or market” Aberdeen (DEGI) sold The Park to In what is described as the “largest sin- top the circa €3.5 billion in investment vol- Starwood Capital for a reported €300 mil- gle office transaction in Poland” Deutsche ume achieved last year. The Czech Republic lion. In another major transaction, Deka Asset & Wealth Management has acquired is forecast to top €1 billion, although much Immobilien acquired the 17,300 sqm City the landmark 66,000 square meter (sqm) depends on the conclusion of large volume Green Court office centre from Skanska Rondo 1 skyscraper in Warsaw. “There transactions that are known to be out in the Property for a reported €54 million. The are numerous large transactions ongo- market. Core investors are essentially con- office centre was the first in the Czech sidering prime office in Prague and Warsaw Republic to be pre-certified with LEED Plat- DANCING HOUSE, PRAGUE and retail in Poland and the Czech Repub- lic. Further, investors are considering the RONDO 1, WARSAW industrial sector with portfolio deals. The general view is that in the current cli- mate there should be a 100-150 basis point differential between Warsaw and Budapest. Troy Javaher, Head of CEE Capital Markets at JLL puts prime yields in Warsaw at 6 per- cent compared to 7.5 percent for Budapest and sub-8 percent for Bucharest. The rising price and competition for product is causing investors to look for assets beyond centrally located prime according to James Chapman, Head of Capital Markets for the CEE region at Cushman & Wakefield. “The weight of new core international and domestic capi- tal is spreading to Polish regional cities for 2014/5–6. | www.resourceinfo.hu

 REsourceinum status according to Skanska. Also in Office developers active in ANALYSISPrague, CBRE Global Investors have sold Poland and Czechthe 4,000 sqm Tančící dům office build-ing, also known as the Dancing Build- Developers have been particularly Take up in Central Europe hit a recording, located on the River Vltava in central active in the Warsaw and Prague office high of 1.4 million sqm of office spacePrague. The iconic building was pur- markets in the post-eurozone crisis being transacted in 2013 according tochased by Václav Skala, a private investor. period. However, these leading Central Cushman & Wakefield (C&W). Total Eastern Europe (CEE) markets are vic- stock in Bratislava, Budapest, Prague and In Slovakia several investment deals tims of their own success as concerns Warsaw equates to nearly 12 million sqm.are under due diligence and 2014 is over rising vacancy rates are causing Currently there is close to 600,000 sqm ofexpected to be the best year, post-cri- developers to re-consider the Budapest office space under construction in Centralsis, for investment in the view of Miro- and Bucharest office markets, although Europe, which is planned to be deliveredslav Barnas, Managing Director of JLL vacancy is high in these cities. in 2014.Slovakia. In a recent deal, Tatra AssetManagement (TAM) has acquired three F rom a development perspective, it is Vacancy in Central Europe hasbuildings in the CBC office complex equity rich developers and those able to increased to 14.3 percent and this isfrom HB Reavis. secure preleases that are going ahead with expected to rise further as new specula- developments across CEE. The standard of tive space is delivered to the market. War- According to Andrew Thompson, buildings in the region is generally regarded saw still has the lowest vacancy at 11.7Managing Partner of Cushman & Wake- as on a similar level to those found in West- percent followed by Prague with 13 per-field Slovakia, the market will demon- ern Europe as developers need to meet the cent, Bratislava with 15 and Budapest withstrate even further liquidity in 2014, requirements of tenants and investors in 18 percent.focused on prime. “The attraction/pull of order to successfully let a building, facilitatePoland as an investment location slows debt finance and attract investors. Prime “The Central European office mar-the potential growth of other CEE coun- product is being constructed in accordance ket shows a clear revival, particularly intries like Slovakia and even the Czech with, for example Building Research Estab- Poland with take up continuing to grow inRepublic. That said, it does not make lishment Environmental Assessment Meth- both Warsaw and regional cities. Despitesense to me that a regional city in Poland, odology (BREEAM) and Leadership in this, rents are still relatively subdued duewhere the only office market is shared Energy and Environmental Design (LEED) to increasing vacancy levels, especially inservice centres, attracts demand from certification, in order to conform to Euro- Warsaw where vacancy rates are expectedsome investors whilst the capital city of pean Union (EU) legislation and this is now to grow to around 14 percent by the endBratislava is not on their target list.” a basis requirement in conforming to the of 2014,” said Richard Aboo, Head of CEE specification requirements from tenants Office Agency at C&W. More investors are said to be consid- and investors.ering Hungary despite the perceived According to Savills, Warsaw officepolitical risk that has placed it further In Warsaw Ghelamco are constructing stock is expected to reach 5 million sqmup the risk curve. “Core investors that the 220 metre high Warsaw Spire that will within the next three years. “Developmentare focused on prime office in Warsaw provide over 80,000 square metres (sqm) of activity is now much higher, in particularand Prague and prime retail in Poland office space adjacent to the Palace of Cul- in the city centre, where over 260,000 sqmare starting to reconsider Budapest and ture. Ghelamco are one of a number of of new office space is under construction,seriously consider Bucharest. Budapest leading international developers and inves- of which circa 46 percent is to be deliv-is regarded as attractive due to its past, tors with ongoing projects in Warsaw. The ered this year,” said Tomasz Buras, head ofits good product and low current capital conventional wisdom is that the city is the office agency at Savills Poland.values while Bucharest is seen as a future major business centre of Central Europe.growth story,” commented Troy Javaher. The development of high visibility sky- Over-supply is a concern in Prague scrapers is the current fashion as the city where almost 170,000 sqm of space is In Budapest, Skanska’s fully let Green seeks to live up to its reputation as a lead- expected to be completed in 2014 asHouse is under due diligence. In Bucha- ing European city. The status of Warsaw is vacancy rises. “Portland Trust is not devel-rest Skanska is due to complete the first reflected in prime city centre rents that are oping any new buildings in Prague at this19,500 sqm phase of Green Court this put at €25 per sqm per month compared to current time. Healthy take up is beingyear and the complex is expected to be €21 for Budapest. tempered by a more than adequate level offully let on opening. On completion it supply,” commented Robert Neale, Man-will consist of 52,000 sqm of space in aging Director of Portland Trust, who havethree buildings. This, along with the AFI been active in Prague for several years.Europe projects, is expected to attractmore investors to Romania as primeproduct is entering the market. www.resourceinfo.hu | 2014/5–6.

REsource ANALYSIS Despite potential oversupply, Skanska a true reflection of the market as there are Property has started the speculative con- several outdated first generation buildings struction of the 17,300 sqm Corso Court that should be taken out of the equation. with preleases we will be able to secure the after disposing of the 17,300 sqm City financing,” commented Tibor Tatár, CEO of Green Court office project to Deka Immo- In the latest delivery, the Hungarian Futureal on the new project. bilien for a reported €54 million. With developer Horizon Development has com- regard to pipeline, the Austrian Immofi- pleted the Eiffel Palace, a new building Also in Váci Road, Skanska Property are nanz Group is undertaking its first devel- that has been constructed with the origi- set to commence construction of the first opment project in the Czech Republic nal 1890s facade. A 9,000 sqm prelease was phase of the 26,000 sqm Nordic Light. The with the €25 million refurbishment of the agreed with PricewaterhouseCoopers for company has the choice of undertaking 6,800 sqm Jindřišská 16 building in the old the 12,000 sqm gross leasable area (GLA) construction of a larger or smaller phase of town of Prague. that facilitated financing from UniCredit the centre depending on prelets. Bank. “Without a prelease we would not In contrast to Prague and Warsaw, office have been able to start the project,” said Ist- The Bucharest office market is picking up pipeline supply in Bratislava is limited as ván Kerekes, Leasing and Marketing Direc- and it is estimated that new Bucharest office 15 percent plus vacancy rates have caused tor of Horizon Development. supply will reach 150,000 sqm in 2014, in many projects to be put on hold until pre- a city with a total stock of a little over two leases are signed. The major pipeline proj- In another project, the Hungarian CEE million sqm, significantly lower than Prague, ect is the 35,000 sqm Westend Gate busi- developer Futureal is close to complet- Budapest and Warsaw. ness centre by the Slovak developer J&T ing the 6,200 sqm Corvin Corner. Another Real Estate. “In general quality is seen as office project by the company is the 23,500 comparable to any class A product in CEE sqm Vision Towers in the ever popular Váci and even Western Europe as major devel- Road corridor business district, for which opers are aware of the absolute need for a built-to-suit deal has been signed for prime if they want their schemes to be suc- around percent of space with KPMG. The cessful and liquid,” said Andrew Thompson, company has just launched the €170 million Managing Partner of C&W Slovakia. Budapest One business park adjacent to the new Metro 4 line. The 70,000 sqm scheme Due to economic and political concerns will be constructed in stages depending on combined with high vacancy there has also prelets. “Vacancy is high but there are not been limited office pipeline in Budapest. many possibilities for 10,000 sqm require- This has brought vacancy down to below 19 ments. Also technical specifications from percent for the first time since 2009. How- tenants are changing very quickly. Com- ever critics argue that the vacancy rate is not panies are looking 3-4 years ahead and CORSO COURT, PRAGUE 2014/5–6. | www.resourceinfo.hu

 REsourceWhat have we gained crisis? from the INTERVIEWNone of the real estate sectors, which have been in continuous transition since the crisis, escaped seriousre-thinking, transformation, the depositing of new funds and new standards. Some became losers in thisrenewal while others have become stronger. We spoke to Pál Baross FRICS, Chairman of the Board at BFVK,about important questions affecting the profession, the South-Eastern European region’s potential and aboutthe decade long non-existing governmental real estate policy.GERGELY DITRÓY he crisis has almost com- tive salaries) will boost the local housing although there have been lots of lit- market and trade. A few new shopping tle positive signs, proving that the real T pletely changed the domestic centers might be built in the future, but estate market is slowly recovering from and global real estate devel- the retail segment could benefit the most the crisis.opment environment. For example, from the fast penetration of online stores.changing valuation methods, financing Furthermore, small town shops, where We should not be afraid, but we will notand long-term strategies. Are we going people carry out everyday shopping, reach former highs for a long time. In myto return to the “old” administration view, the housing market will probably besoon or are we going to live with this could also return. Based on my experience the one to take off again first. Many post-new, subdued picture of the future? in the region, I still see opportunities for poned their purchases due to the uncer- The same drive and development boom the development of large, regional shop- tainty. For these people, however, the con-will not return, neither here in Hungary ping centers. But I am not sure whether ditions have changed in a very positiveor in the world. The property develop- the profession understands this genre. A way.ment market will remain cyclical and will few of these centers could have a place inbe more closely aligned with economic Hungary. It seems that the aversion towardsdevelopment. It is hard to say how eco- credit has not changed.nomic development will go in Hungary. All over the world there is positiveThe country has an economic recovery news regarding the different sectors of People are not taking on so much creditstrategy, which is based on a very strong the real estate market, yet this “good for vacations, and they have cut back ongovernment program financed by Euro- news” is quite limited here in Hungary, household appliances and replacing theirpean Union (EU) funds. The current cars. But sooner or later you have to buyhandovers and developments are almost an apartment. As long as the ownershipall linked to factories or factory service mentality does not change in Hungaryproviders. This means that Budapest’s and real estate agents offering rentableprivileged position will weaken from this properties do not appear, as in Westernpoint of view. Others major cities will also countries, the situation will remain as itrecognize that the key to their develop- is. Of course, in many countries the rentalment is attracting industry and manufac- market was facilitated by the fact that realturing. estate prices were, or are, simply unattain- able. Therefore, for many people it is not a And will these developments attract question of whether to rent or buy as buy-other office, retail and apartment-type ing is precluded.developments in the future? Is the domestic real estate sector Basically, yes. These industrial proper- already dealing with the Real Estateties will not include independent office Investment Trust (REIT)? Could this bebuildings, thus this won’t enhance office the solution for rental properties?developments in small towns. Yet the newlabor environment (secure jobs, competi- It is a good solution in many countries. It has the advantage that wealthier peo- www.resourceinfo.hu | 2014/5–6.

REsource INTERVIEW ple can join together in a project and a \"The government’s has real estate appraisal changed as a manager manages the particular prop- current thinking result of the crisis? erty. The main idea behind this type of co- and dictionary does operation is to find investors for specific not include the Property valuation has always been an projects and then manage these projects. words “real estate”. important issue for commercial real estate However, if the institutional environment There are words like management. The crisis brought some changes I imagine the elderly could shift “construction,” “building,” innovations, which are clearly visible in towards the rental sector with additional “infrastructure.” the Royal Institute of Charted Surveyors’ services. Senior people could release the (RICS) Red Book. Property valuers have capital from their properties and invest in ments. Once you have to adjust the build- to make slightly longer term projections these ones. This is a relatively well-devel- ing engineering, a much bigger invest- (in years) about the evolution of the prop- oped product in America and Western ment is needed. Of course, you can buy erty’s value. Previously, 3 months was the Europe. Properties set up like dormito- them cheaply, but if you want to compete standard. This has changed radically and ries are the most lucrative forms of invest- with modern buildings you have to invest valuers have much more responsibility but ment. a lot in renovation. If I were an investor I there is also a greater need for them. would certainly concentrate on new build- Why does no one in Hungary see this ings. No matter if we talk about housing, potential? Is it better to build an office office buildings or office developments, building with a quick return? Another important consequence of currently there is no political will to the crisis, apart from more thought- join the sector. And there is experience. I saw inter- ful developments, is that every major est before the crisis. I think investors will new development is focused on getting I have to agree, unfortunately. look for this market segment from Austria, a green rating. This has become some Germany, or Spain and they will search kind of essential public relations cam- Do you think this will change? for domestic expertise and management. paign and is of course important for The government’s current thinking and My guess is that as soon as Hungary’s several reasons. However, some stud- dictionary does not include the words reputation improves, these investors will ies show that a green rating is not an “real estate”. There are words like “con- start appearing. The fact that there is basi- important aspect for tenants. struction,” “building,” “infrastructure” and cally no traditional rental market in Hun- the added value generated by these devel- gary will affect foreign investors. All of I have also seen such surveys but I have opments such as “economic growth” and them are asking how it is possible that in a some doubts. Only new tenants should “new jobs”. These developments can be major European capital 90 percent of the have been questioned and respondents nice (like stadiums), useful (like infra- properties are owner-occupied. should have been broken into small and structure), and provide local economic large groups of tenants. Then the outcome stimulus (like spa hotels) but as “real What impact does this high number would be very different. Also, the opera- estate” they are atrocious. of owner-occupied properties have on tion of these buildings is sometimes prob- prices? lematic as often tenants are not provided Budapest 2030 is the new (the latest) with information on how to live in such document on the long term develop- There is no connection. If someone buildings. Showing the effects of the cut ment of the city. Could this have a posi- wants to sell, and the market is not good, in public utility costs, as introduced by tive impact on the neglected real estate you cannot sell. the government, should also be adopted market? in offices, so that tenants see the actual A lot has changed since the crisis. But results of savings. Unfortunately this does Unfortunately, this document does not perhaps the most important change not happen. even mention the words real estate mar- is that much more thoughtful devel- ket. It deals a little bit with city manage- opments have been built since. If you Rating systems, financing, build-to- ment but does not contain breakthrough could buy just one office building in suit developments, etc. have ultimately designs. On the whole, this is not the best Budapest, would you choose among the affected the value and property valua- way to understand the real estate market. ones developed after the crisis or the tion, which also went through a major ones that have successfully survived the transformation worldwide. How much Do you think a city’s long-term devel- crisis? opment concept should also cover the real estate market in detail? I recently talked to someone who is actively looking for an office for sale. He If it deals with real estate market reg- said that almost every building built ulation and the promotion of urbaniza- before 2000 can no longer meet require- tion, then I think it should. But the city’s plan only deals with the structure of the 2014/5–6. | www.resourceinfo.hu

 REsourcecity and it is formulated on an architec- the development opportunities. Another Unpredictability always discourages INTERVIEWtural level. For example, the Podmaniczky important point is that there are few cit- developers, but if there is money devel-plan covered brownfield problems, but it ies in this region where a real estate mar- opers will arrive. Just think about Russia,could not properly understand what kind ket, similar to the one in Budapest, could Kazakhstan, etc.of actual burden this is for the city. develop. This is the main drawback for the region’s potential. Romania is a big Finally, there is much talk about the As a result of further EU expansion, country, but plenty of basic infrastructure low number of new developments whilepossible new development destinations investments are still needed. In the for- renovations are becoming increasinglyare possible, such as in the Balkans. mer Yugoslavia, the coast and tourism can important. What do you think of this,Concerning the development of the be a decisive factor. I see further poten- do you think this will improve in theBalkan countries what kind of opportu- tial in hotel and other recreational devel- future?nities do you see for domestic or inter- opments, housing and other real estatenational real estate players? investment sectors are only secondary. Yes. One of my favorite “real estates” is the FOTEX Plaza next to the MOM Park These are basically small countries with Does the different legal and social shopping center in Buda. This used to besmall economies and different develop- environment of Balkan countries sup- a classic, aesthetically socialist construc-ment levels. Liquidity has always been port or inhibit developers? tion. During the renovation, the origi-a very important factor for Hungarian nal structure was maintained and reno-developers and investors. If there is not vated and it evolved into a skyscraper-likeenough room for movement ina given market, then building. Location is always important.this determinates In the end this makes the difference whether it is worth renovating a given property. For example, if the 13th dis- trict had been really creative, then it would have made Váci Road a via- ble “office-boulevard”. They could have come up with a solution for the traf- fic, and created more public space and green areas. This way, the area could have become a premium location, while as it is, it has simply remained a mass market. But as long as there is still a need for mass markets, then Váci Road will remain successful. For a while at least. www.resourceinfo.hu | 2014/5–6.

REsource  Slow but steady level and the record high level of 1.31 bil- lion in 2008 is still far away. Not some-ANALYSIS It seems that the optimism in European real estate markets is thing you qould call a boom, but defi- permeating to Eastern Europe and finally has reached Hungary. nitely an encouraging sign that developers seem to think it might be worth develop- The projections and figures reflecting activity in recent months are ing in the domestic market again. Located encouraging. At the same time, while they indicate that we are moving at the terminal station of metro line 4 at Kelenföld, Budapest One is possibly one in the right direction, it is also clear that the road will be bumpy. of the most impressive projects to start in 2014. As part of Futureal’s large multi- K ATALIN MAJOR functional project, it will be situated at the newly opened metro line. During the first O ver the past 6 months there has lative buildings the change is even smaller phase of the project, four towers will be been a lot of positive news regard- (excluding the owneroccupied stock), built on a 2 hectare area, on a total area of ing the Hungarian real estate mar- remaining 23 percent. Despite the stag- 70,000 sqm. Meanwhile, the company con- ket. It seems that the optimism in European nation in the last 2 quarters, the decrease tinues to expand the Corvin Project with real estate markets’ is permeating to East- on a year-on-year basis is more significant. the development of Corvin IV, a 43,000 ern Europe and has finally reached Hun- But more importantly the numbers show a sqm office complex. Additionally, Cordia gary. The latest report of The Royal Institu- turnaround . Park Residencia, which is a new residential tion of Chartered Surveyors (RICS) which Brick and mortar block, will also start. Skanska Nordic Light, surveys the market probably the most located on Váci Road, will start in the sec- accurately indicates a clear turnaround. Along with the predictions and market ond quarter of the year. The 26,000 sqm According to the report, for the first time data there are also some more tangible office building will be completed in 2016. since 2011 leasing demand is increasing, signs of a positive turn. Increasing devel- One more project will be launching this exceeding supply, resulting in decreasing opment activity is one of the signs of grow- year in the Váci office corridor near Lehel vacancy rates in the medium term. Increas- ing confidence. According to the Mem- Square. Wing will start constructing its 7 ing demand for both leasing and purchas- bers of Hungary’s Property Developers storey office block V17. Another presti- ing of property is expected in the coming Roundtable Association (IFK) construc- gious project was launched this year – the 12 months. Therefore, the forecast is clearly tion of 71,000 sqm of building space of a reconstruction of one of the most beautiful positive and the figures reflecting activity value of €152 million is expected this year. buildings in Budapest. Restoration started in recent months are also encouraging. At This means 29 percent growth in value and a few weeks ago on Tőzsdepalota (The the same time, while they indicate that we 41 percent expansion in terms of area over Stock Exchange Palace, which is the for- are moving in the right direction, it is also last year. It is also important to note that mer Hungarian state television headquar- clear that the road will be bumpy. this is still only marginally above the 2004 ters located in Szabadság Square. The res- Office market figures from the last 12 months also indicate a positive turn. The Total leasing activity, completion and vacancy rate on the Budapest office market total stock of the Budapest office mar- ket, including owner-occupied and spec- 180000 22.0% ulative projects, reached 3,184,500 square Total Leasing Activity Completion Vacancy Rate 21.5% meters (sqm) at the end of Q1 2014. Spec- 21.0% ulative stock amounted to 2,558,150 sqm 160000 20.5% and owner occupied stock amounted to 140000 20.0% 626,350 sqm. While total leasing activity 120000 19.5% in Q4 2013 reached to a 3 year record high 100000 at 153,505 sqm (although most of this was 80000 19.0% boosted by year end renewals) total leasing 60000 18.5% activity in Q1 2014 was 57,200 sqm, which 40000 18.0% is the lowest recorded quarterly figure 17.5% since Q1 2012. Nevertheless, the vacancy 20000 17.0% rate remained stable compared to the pre- 0 16.5% vious quarter. It remained flat with only a 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 0.1 percentage point increase on the Q4 SOURCE: BRF, RESOURCE 2013 figures. Considering only the specu- 2014/5–6. | www.resourceinfo.hu

 REsource ANALYSIS VISION TOWER EIFFEL PALACEtoration project will deliver 35,000 sqm of ues are mainly due to lower quality and/ ing more attractive yields than its compet-luxury office and retail space in 2017. The or to a fragmented office stock while there itors in the region. Although there are notproject requires €100 million investment is shortage in the market for good quality, many transparent transactions, consider-including the previously purchased Lipót larger office spaces. As for rents, accord- ing a theoretical yield level, the BudapestGarage. Graphisoft Park’s expansion will ing to market consensus, prices are unlikely office market is offering a 150-200 basisalso be started this year with the construc- to fall any more and a further decrease in point premium over the Warsaw market.tion of a new 7000 sqm office this year. The effective rents is not expected. The Hungar- It is no coincidence that in recent monthsvolume of new handovers is also growing. ian market is in the stabilization phase, nev- the investment market is also experienc-The first handover has already taken place: ertheless Budapest is still a tenants’ mar- ing some revival. There are several tran-Horizon Development has turned Eiffel ket. The increase in demand in partly due to sitions in progress and most of them willPalace (former Pesti Hírlap headquarters), the low prices. Recently renegotiations and be completed soon. Properties in need ofinto a 14,000 sqm “A” category office, that moves have dominated the market, where renovation and repositioning are espe-is mainly rented by the Pricewaterhouse- tenants tried to take advantage of the pres- cially in demand, but in Budapest there isCoopers consulting firm. Futureal’s proj- ent favorable situation, but hopefully new no shortage of good quality, institutionalect on Váci Road, Vision Towers, will be tenants will arrive soon. The leasing consul- category products. The absence of inter-completed this year and will also be occu- tants of various real estate firms we inter- national institutional investors has beenpied in a significant part by a big four com- viewed said there were more and more new a huge barrier for market recovery but itpany. Futureal will also complete a small entrants in the market, along with inter- seems that Budapest might become a tar-office building in Corvin Promenade and national tenants that are also getting more get again. This is partly due to the perfor-the 6200 sqm property is almost entirely active (e.g. global companies’ service cen- mance of the domestic economy and to therented out. The logistics market’s 7000 sqm ters are looking for offices in Budapest). improving macro data which is boostingexpansion is due to Prologis’ handover. This is a key tendency considering that the investor confidence in Hungary. However, office market’s significant and lasting recov- it is also important to see that institutionalWe can move on ery and the launch of new developments are investors looking for higher volume invest- impossible without new tenants absorbing ments are having difficulties in findingThe Budapest market seems to be ready to larger spaces. The growth of tenant activ- good quality products. Opportunities areprogress. At this point in the cycle, it has hit ity will certainly result in higher rents, how- decreasing not only in Europe but in therock bottom and it seems that it can only ever this will be a slow process rather than main CEE markets as well, making Buda-go up from here. The volume of develop- a jump. pest a realistic alternative. Market liquidityments is still very low, even though the new is also backed by the Funding for Growthhandovers listed above indicate growth. In Cheap Budapest Scheme that supports domestic investors.parallel with a modestly increasing demand These funds can be sufficient for a majorfor leasing, vacancy rate is moving in a pos- Budapest is cheap, and this is not only real estate transaction (relative to the sizeitive direction, and in the next 12 months true for rents. It is relatively cheap to of the domestic market). The upper limitwe can expect a further significant decline. buy commercial property in the Hungar- of the credit amount is HUF 10 billion (cca.Also, we have to emphasize that analyzing ian capital compared to other cities in the EUR 33,3 million).these figures it is clear that these higher val- region and the Budapest market is offer- www.resourceinfo.hu | 2014/5–6.

REsource  Strained relationships – Extremely low operating costsREPORT The Facility Management and Energy Effi- added that property managers often force ciency Conference was organized for the operators into such tight cost frames that fifth time this year. Real estate profession- ulated system, decisions are made slowly. this does not allow them to do a proper job. als looked for answers to real estate man- At best in a year, but in some cases it takes This is bad for both the property manager agement and operational issues at the more. However, state and municipal prop- and for the tenants. Property management Portfolio.hu FM 2014 conference. erty managers have an advantage over the and facility management are supposed to private ones as they manage a full range of work together in the interests of a low-cost Experts unanimously think that the leasing properties, including schools, museums or operation. market is improving which suggests that office buildings. the crisis is over to some extent. Attend- The new Civil Code which recently entered Only price matters? ees at the conference believe the market into force has not brought significant has begun to split as one group of tenants changes for business and lease contracts, Property managers claim they should say no is looking for quality and is willing to pay experts noted. The new legislation is con- in certain situations. For example, to overly for it, while the second group is cost-sen- sidered to be market friendly and it was low prices which do not allow for a quality sitive, looking for offices with the least cost drafted based on market practice. The pro- service and which may ultimately result in burdens. These tenants are ready to make visions on the protection of property have a loss of prestige. However, there is always compromises and opt for lower quality and not changed. The biggest change is that in someone willing to lower prices in order to cheaper offices. the future disputes can be resolved not only win a tender, so there is no such thing as a by notaries but also in court. minimum price. Dramatically low prices are Property owners are also characterized not sustainable. In the long run they could by this division. Some building owners Sharing the same plate – cause a building’s deterioration, which is want to maintain the quality of their build- the facility management market not in the interest of the property manager ings and an increasing number of build- or the tenants. Setting a limit price could be ings are now getting green certificates. But During facility management panel discus- a good solution. not every property owner can meet grow- sions it was noted that property manage- ing tenant needs, and this is due to finan- ment is taking over the duties of facility Representatives of the profession said cial issues which does not allow for mod- management. As a result, their relation- they already tried to set certain limits for ernization. ship is not an easy one. Due to the shrink- facility management costs, in order to fil- ing market, they are “sharing the same plate”. ter out unrealistic bidders. At present, the Due to a lack of this type of invest- Experts expressed hopes that the two pro- lowest price almost always wins but this ment, several “A” category offices have fessions will not be active in one segment does not necessarily mean quality service. It been reclassified to a “B” category. How- in the near future. In their view, real estate is planned that a national organization for ever, experts agreed that there is still a need operators’ activities are often invisible and facility managers will be set up, which would for these buildings. There have always been in most cases only become visible if the support the industry to unify communica- buildings with different levels of quality on facility management is not performed prop- tion with tenants and property managers. the market and this will remain unchanged erly. The pressure to reduce costs is pres- in the future. Experts also pointed out that ently the biggest challenge for operating During discussions it also turned out that an office building should not provide ser- companies trying to do a quality job. They the attendees of the conference avoid pub- vices above its grading, so a “B” category lic tenders. In their opinion, it does not building should not offer “A+” services. make any sense to participate in tenders as they require too much effort and the sys- How different is the public sector? tem needs to be reviewed. Public institu- tions have significant debts and therefore The management of public assets is dif- managing public property does not neces- ferent to private ones. In the case of pub- sarily pay off. lic or municipal properties we cannot talk about owners but about asset managers Banks have become major property own- and this is a big difference. Private owners ers and property managers in recent years. respond more quickly to market challenges. For the time being they are only learn- Asset managers of state owned properties ing these new “roles” as they acquired move much more slowly and are not par- these properties “unintentionally”. Experts ticularly concerned about market values or pointed out during discussions that this is needs. Due to bureaucracy and an overreg- a situation in which facility management companies could gain new opportunities. 2014/5–6. | www.resourceinfo.hu

 REsource Real estate developers in SEE Company headquarters contact – phone number, Type of real estate development Where are you present in the region? website, e-mail Company Current main projects in the region headquarters/ and in Hungary – name, planned P: +420 281 082 110 regional www.cpi.cz headquarters delivery year [email protected] name (country, city) office retail P: +36 1 225 6600 industrial, logistics www.cpigroup.hu residential [email protected] hotel Bulgaria Romania Serbia Montenegro Croatia Slovenia Macedonia Albania Other LISTABLON/CPI Prague, Czech Republic ü ü ü ü ü N.A. –ü– – – – – –ADAMA Group Bucharest, Romania – – – ü – Copou Bellevue (RO) - Q4 2014 –ü– – – – – – P:+40 31 405 17 00 www.adama.ro [email protected] [email protected] Europe N.V. Amsterdam, üüüü – AFI Green City (RO) üüü – – – – – P: +31 204 218 928 The Netherlands AFI Park (RO) - 2017 afi-europe.eu AFI Gardens (RO) LageraTulip Phase II and III (BG) info@afi-europe.eu P: +36 1 382 5100AIG/Lincoln Kft. Budapest, Hungary ü ü ü – – N.A. üü – – – – – – www.aiglincoln.hu [email protected] International S.A. Brussels, Belgium ü ü – – – DN1 Business &Technology Park -(RO) - 2016 – ü – – – – – – P: +32 26 600 070 www.codic.euECE Projektmanagement Budapest, Hungary –ü– – – N.A. üü – – – – – – P: +36 1 434 8208Budapest Kft. F: +36 1 434 8218 www.ece.comEcho Investment S.A. Kielce, Poland üü – üü KORONA Gallery (RO) - 2016 –ü– – – – – – P: +36 30 429 2333, +48 41 33 33 333 www.echo.com.pl [email protected] offi[email protected] Group Immorent AG Vienna, Austria üüüüü Sirius (SRB) üüü – üü – – P: +43 (0)5 0100 27000 Ypsilon (SLO), F: +43 (0)5 0100 27204 Immopark Zagreb (HR) offi[email protected] Buzin Multipurpose Business Park (HR) www.erstegroupimmorent.com www.resourceinfo.hu | 2014/5–6.

REsource  Real estate developers in SEE Type of real estate development Where are you present in the region? Company Current main projects in the region headquarters/ and in Hungary – name, planned regional headquarters delivery yearLIST (country, city) Company headquarters contact – phone number, office retail website, e-mail industrial, logistics residential hotel Bulgaria Romania Serbia Montenegro Croatia Slovenia Macedonia Albania Other Company name Futureal Budapest, Hungary ü ü – ü – Gold Plaza (RO) –ü– – – – – – P: +40 21 260 7845 www.futureal.hu www.goldplaza-baiamare.ro AnaTower (RO) Globe Trade Centre S.A. Warsaw, Poland üü – – – Avenue Mall Subotica (SRB), Avenue Park (HR) ü ü ü – ü – – – P: +48 22 60 60 700 Galleria Bistrita (RO), Galleria Bucharest (RO) www.gtc.com.pl Galleria Russe (BG), Istria Golf (HR) P: +36 1 476 6900 KÉSZ Csoport Budapest, Hungary ü – ü – ü N.A. üüü – – – – – www.kesz.hu [email protected] Belgrade Plaza - MUP (SRB), Belgrade Plaza -Visnjicka (SRB), Casa Radio (RO), P: +31 20 344 9560 www.plazacenters.com Plaza Centers Group Amsterdam, The üü – – – Constanta Plaza (RO), Hunedoara Plaza (RO), ü ü ü – – – – – [email protected] Netherlands Iasi Plaza (RO), Shumen Plaza (BG), Slatina Plaza (RO),Targu Mures Plaza (RO),Timisoara Plaza (RO), Cina Plaza (RO) P: +36 1 488 7476 Portus Buda Group Zrt. Budapest, Hungary ü ü – ü – N.A. – –ü– – – – – www.portusbudagroup.com offi[email protected] Prologis Warsaw, Poland / – –ü– – N.A. –ü– – – – – – www.prologiscee.com Budapest, Hungary iwww.prologisceesearch.com Raiffeisen Evolution Project Vienna, Austria üü – üü N.A. –ü– – – – – – P: +36 1 346 6400, Development GmbH +43 171 7060 www.raiffeisenevolution.com office@raiffeisenevolution.com Real4You Group Vienna, Austria üü – üü Mega Mall Bucharest (RO) - 2015 üü – – ü – – – P: + 43 7229 88 0 80 - 0 Mega Mall Focsani(RO) - 2015 www.real4you.at Mega Mall Satu Mare (RO) - 2015 offi[email protected] Mega Mall Sofia (BG) Mega MallTargu Mures (RO) - 2015 2014/5–6. | www.resourceinfo.hu

Real estate developers in SEE  REsource Type of real estate development Where are you present in the region? Company headquarters Company Current main projects in the region contact – phone number, headquarters/ and in Hungary – name, planned regional website, e-mail headquarters delivery yearCompany name (country, city) office retail industrial, logistics residential hotel Bulgaria Romania Serbia Montenegro Croatia Slovenia Macedonia Albania Other LISTS IMMO AG Vienna, Austria üü – üü N.A. üü – – ü – – – P: 43 (0) 50 100-27521 offi[email protected] Romania Bucharest, Romania ü ü ü – – Green Court Bucharest (RO) –ü– – – – – – P:+40 372 301 300 www.skanska.roTishman Management Sofia, Bulgaria ü–ü– – Sofia Airport Center (BG) üü – – – – – – www.tishmanmanagement.comCompany EOOD London, United [email protected] KingdomTriGranit Fejlesztési Zrt. Budapest, Hungary ü ü – ü ü N.A. – ü – – üü – – P: +36 1 374 5600 www.trigranit.com [email protected] ADVERTISEMENTDEVELOPMENTMANAGEMENTASSET MANAGEMENTPROPERTY MANAGEMENTPROJECT MANAGEMENTOCCUPIER „BUILD-TO-SUIT”SERVICESW W W.CON V ERGEN- CE .COMoffi[email protected]+36 1 225 0912ConvergenCE is a pre-eminent boutique real estate strategic investor, asset manager and developer in Central Europe.We are respected for our ethics, client loyalty and the quality of our developments and services.We are respected for our ethics, client loyalty and the quality of our developments and services.

REsource  Name of real estate Real estate developments in SEE development Location of real estate Name of real estate Total gross Est. monthly Est. time of Real estate developer/Leasing agent(s) dvelopment developer size of the rent (€/sqm) delivery Country building(sqm) phone website, e-mailLIST AFI Gardens RO Bucharest, Romania AFI Europe 277,340 N.A. planned P: +40 2 14120 220 afi-europe.eu AFI Green City RO Bucharest, Romania AFI Europe 305,000 N.A. planned P: +40 2 14120 220 afi-europe.eu AFI Park RO Bucharest, Romania AFI Europe 115,000 Phase II. Q2 2014 afi-europe.eu N.A. Phase III and IV P: +40 2 14120 220 planned Ana Tower RO Bucharest, Romania GlobeTrade Centre S.A. 8,919 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Avenue Mall Subotica SRB Subotica, Serbia GlobeTrade Centre S.A. 12,362 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Avenue Park HR Zagreb, Croatia GlobeTrade Centre S.A. 12,000 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Belgrade Plaza (MUP) SRB Belgrade, Serbia Plaza Centers Group 63,000 N.A. 2017 P: + 381 11 715 1577 www.plazacenterserbia.rs offi[email protected] Belgrade Plaza (Visnjicka) SRB Belgrade, Serbia Plaza Centers Group 32,000 N.A. 2015 – 2016 P: + 381 11 715 1577 www.plazacenterserbia.rs offi[email protected] Belgrade Waterfront SRB Belgrade, Serbia Eagle Hills 167,225 N.A. 2019 P: +971 4 367 3333 www.emaar.com 2014/5–6. | www.resourceinfo.hu

 REsource Real estate developments in SEEName of real estate Location of real estate Name of real estate Total gross Est. monthly Est. time of Real estate developer/Leasing agent(s)development dvelopment developer size of the rent (€/sqm) delivery Country building(sqm) phone website, e-mail LISTBucharest One RO Bucharest, Romania Globalworth Real Estate 48 732 N.A. 2015 P: +40 21 319 3566/67 www.globalworth.com Investments Ltd. [email protected] Multipurpose Business Park HR Zagreb, Croatia Erste Group Immorent AG 64,600 N.A. in development P: +43 (0)5 0100 27000 www.erstegroupimmorent.com F: +43 (0)5 0100 27204Casa Radio RO Bucharest, Romania Plaza Centers Group 555,000 N.A. 2014-2017 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Plaza RO Bucharest, Romania Plaza Centers Group 4,786 N.A. 2015-2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Business Centre Timisoara RO Timisoara, Romania ModaTim Investment S.A. 43,000 N.A. N.A. P: +40 25 649 1042 www.business-centre.ro [email protected] Plaza RO Constanta, Romania Plaza Centers Group 18,000 N.A. 2015 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] www.adama.roCopou Bellevue RO Fagului Str. 2-8, Iasi, Romani Adama Group 3,588 N.A. Q4 2014 P:+40 31 405 17 00 [email protected] [email protected] Gabriel Sfetcu P: +40 752 08 88 84 Zone 1: 227,000 Alexandru Mihai [email protected] Zone 2: 121,000DN1 Business & Technology Park RO Ploiesti, Romania CODIC Group Zone 3: 141,000 N.A. N.A. P: + 40 741 12 16 79 [email protected] Zone 4: 118,000 Daniel Nistor [email protected] P: + 40 740 11 73 73 [email protected] Gabriel Nada P:+ 40 743 20 42 06Ethos House RO Strada GeorgheTiteica 212-214, Ethos House 8,000 N.A. Q4 2014 P: +40 21 233 9366 www.ethoshouse.ro Bucharest, Romania offi[email protected] www.resourceinfo.hu | 2014/5–6.

REsource  Name of real estate Real estate developments in SEE development Location of real estate Name of real estate Total gross Est. monthly Est. time of Real estate developer/Leasing agent(s) dvelopment developer size of the rent (€/sqm) delivery Country building(sqm) phone website, e-mailLIST Galleria Bistrita RO Bistrita, Romania GlobeTrade Centre S.A. 28,064 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Galleria Bucharest RO Bucharest, Romania GlobeTrade Centre S.A. 123,500 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Galleria Russe BG Russe, Bulgaria GlobeTrade Centre S.A. 34,368 N.A. planned P: +48 22 60 60 700 www.gtc.com.pl Gold Plaza RO Str.Victoriei Nr. 73., Baia Mare Futureal 30,000 N.A. N.A. P: +40 21 260 7845 www.futureal.hu 430122, Romania [email protected] Green Court Bucharest RO Bucharest, Romania Skanska Romania Phase I. N.A. Q4 2014 P: +40 372 301 300 www.skanska.ro 19,500 HBC Dorobanti RO Bucharest, Romania Nima Property Development 4,000 N.A. Q2 2014 P: +40 21 310 8999 www.hbcdorobanti.ro Srl offi[email protected] Hunedoara Plaza RO Hunedoara, Romania Plaza Centers Group 14,000 N.A. 2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Iasi Plaza RO Iasi, Romania Plaza Centers Group 58,000 N.A. 2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Immopark Zagreb HR Zagreb, Croatia Erste Group Immorent AG 174,000 N.A. under construction P: +43 (0)5 0100 27000 www.erstegroupimmorent.com F: +43 (0)5 0100 27204 www.immopark.com 2014/5–6. | www.resourceinfo.hu

 REsource Real estate developments in SEEName of real estate Location of real estate Name of real estate Total gross Est. monthly Est. time of Real estate developer/Leasing agent(s)development dvelopment developer size of the rent (€/sqm) delivery Country building(sqm) phone website, e-mail LISTIstria Golf HR Istria, Croatia GlobeTrade Centre S.A. 1,260,000 N.A. planned P: +48 22 60 60 700 www.gtc.com.plKorona Gallery RO Calea Dorobantilor 239, 3rd floor Echo Investment S.A. Phase I. N.A. Q1–2 2015 P: +48 41 33 33 211 www.korona-brasov.ro 010567 Bucharest, Romania GLA 35,000 [email protected] Tulip BG Sofia, Bulgaria AFI Europe 15,811 N.A. Phase II and III P: +359 2 4898 180 afi-europe.eu are plannedMega Mall Bucharest BG Strada Pierre de Coubertin Nr. 3-5, Real4You 70,000 N.A. 2015 P: + 43 7229 88 0 80 - 0 www.real4you.at 21901 Bucharest, Romania offi[email protected] Mall Focsani RO B-dul Bucuresti Nr. 4, 620144 Real4You 24,000 N.A. 2015 P: + 43 7229 88 0 80 - 0 www.real4you.at Focsani, Romania offi[email protected] Mall Satu Mare RO Bulevardul Lalelei Nr. 2, 440167 Satu Real4You 18,000 N.A. 2015 P: + 43 7229 88 0 80 - 0 www.real4you.at Mare, Romania offi[email protected] Mall Sofia BG Blvd.TsaritsaYoana 15, 1324 Sofia, Real4You 25,000 N.A. under construction P: + 43 7229 88 0 80 - 0 www.real4you.at Bulgaria offi[email protected] Mall Targu Mures RO Strada Gheorghe Doja Nr. 62 540146 Real4You 21,000 N.A. 2015 P: + 43 7229 88 0 80 - 0 www.real4you.at Targu Mures, Romania offi[email protected] Mill SRB BulevarVojvode Misica 15, 11000 Soravia Group GmbH 25,000 N.A. Q3 2014 P: +43 171 690 www.soravia.at Belgrade, Serbia offi[email protected] www.resourceinfo.hu | 2014/5–6.

REsource  Name of real estate Real estate developments in SEE development Location of real estate Name of real estate Total gross Est. monthly Est. time of Real estate developer/Leasing agent(s) dvelopment developer size of the rent (€/sqm) delivery Country building(sqm) phone website, e-mailLIST Shumen Plaza BG Shumen, Bulgaria Plaza Centers Group 20,000 N.A. 2016 P: + 359 2 851 8984 www.plazacenters.com offi[email protected] Sirius SRB Belgrade, Serbia Erste Group Immorent AG Phase I. 25,790 N.A. in development P: +43 (0)5 0100 27000 www.erstegroupimmorent.com Phase II. 19,385 F: +43 (0)5 0100 27204 offi[email protected] www.siriuscomplex.rs Slatina Plaza RO Slatina, Romania Plaza Centers Group 17,000 N.A. 2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Tishman Management 180,000 office Phase I. - 10/2012 Mrs. Olga Stoichkova - www.tishmanmanagement.com Sofia Airport Center (SAC) BG Sofia, Bulgaria Company EOOD 28,000 logistics N.A. Phase II and III commercial manager www.sac.bg next 5-7 years +359 (2) 492 3800 [email protected] Targu Mures Plaza RO Targu Mures, Romania Plaza Centers Group 10,000 N.A. 2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] The Office Cluj-Napoca RO Cluj-Napoca, Romania ModaTim Investment S.A. 54,000 N.A. Phase I. Q2 2014 P: +40 256 491 042 info@theofficecluj.ro Phase II. 2015 +40 21 232 1398 Phase III. 2016 Timisoara Plaza RO Timisoara, Romania Plaza Centers Group 38,000 N.A. 2016 P: + 40 21 315 4646 www.plazacenters.com offi[email protected] Tobacna City SLO Ljubljana, Slovenia IMOS Group 65,000 N.A. Phase II. P:+ 386 147 333 00 www.imos.si 2013-2018 [email protected] Ypsilon SLO Ljubljana, Slovenia Erste Group Immorent AG 10,700 N.A. design planning P: +386 (0)15 13 88 00 www.erstegroupimmorent.si phase offi[email protected] The list was compiled by REsource. No claim is made as to the accuracy of the information. The database was compiled based on information by real estate developer companies and real estate agencies as of May 14, 2014. 2014/5–6. | www.resourceinfo.hu