In your view, how likely is it that, in light of the recent change of government and the plans and measures announced so far, foreign investors will return to the Hungarian real estate market in greater numbers and with larger investment volumes?
We expect foreign investor activity in the domestic market to increase meaningfully as confidence improves. The Hungarian real estate market is currently undervalued compared with its regional peers, and this combination could make it highly attractive for capital inflows. While renewed interest is already visible in the residential market, in the commercial segment it will be a predictable economic policy environment and fiscal stability that can unlock long-term institutional investment decisions.
Compared with the current status quo, do you expect any realignment or consolidation in real estate ownership relative to the past 10–20 years?
We primarily expect a sector-specific realignment in the market: the retail real estate segment could strengthen visibly, while in logistics the previous period of rapid expansion is likely to give way to a phase of consolidation. In the office market, we do not expect any material structural change in the short term; here, a general recovery in transaction volumes is more likely to be the defining factor. Overall, the coming period is more likely to be characterised by renewed investor appetite than by a radical reshuffling of ownership structures.
Which of the current market-distorting regulations would, in your view, absolutely need to be changed in order to get the market moving again?
Restoring market momentum and investment appetite would require a review of certain restrictions introduced in previous years. A key example is the so-called shopping-centre development ban, or “plázastop”, which may have had positive effects when it was first introduced, but has become counterproductive in the current economic environment.
Do you expect that certain properties sold or acquired at prices above market value will now need to be repriced or revalued?
In my view, most of the significant repricing triggered by the Covid pandemic and the energy crisis has already taken place in the market, and the necessary adjustments have also been made within Gránit Asset Management’s portfolio. At the same time, in the office market – particularly in the case of less modern, Class B properties – further value declines can be expected due to pressure on rents and increasingly stringent tenant and investor expectations. In this segment, properties will only be able to preserve their competitiveness and market value in the future through targeted, substantial value-enhancing investments.
The article was first published by Portfolio.hu.
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