Europe’s largest commercial property exhibition resumed its traditional annual four-day event in March amid the implications of the war in Ukraine for markets. The exhibition attracted more than 20,000 delegates from 80 countries, according to event organizer Reed Midem.

As is the trend in recent years, the Hungarian Investment Promotion Agency organized a Budapest/Hungary stand together with the Association of Real Estate Developers (IFK) and the Budapest Development Center (BFK).

Atenor, Futureal, GLP, TriGranit, Liget Budapest and Wing, as well as consultants, CBRE, Stay in Hungary and Revetas Capital. Other consultants such as Cushman & Wakefield and Avison Young had Hungarian representatives promoting Hungary to investors at the event.

“We expect an investment volume of around 1.2-1.4 billion euros for Hungary, with the office sector providing more products,” said Tim O’Sullivan, director of capital markets at CBRE. Hungary, during a presentation on investment opportunities in Hungary.

“Logistics is attracting considerable interest from investors, even though few trades are made due to the low supply of products. Residential could become a popular investment asset, as it is in the Czech Republic and Poland,” O’Sullivan added.

Can be compressed

He sees office yields for Hungary at 5.25%, compared to 4.25% in the Czech Republic and 4.4% for Poland. There is a possibility of compression in the industrial sector, while office yields will remain stable and retail should return.

Kevin Turpin, now regional director of capital markets in CEE at Colliers, recorded total investments in CEE (covering Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia) at around 11 billion euros , with 1.6 billion euros for Hungary against 1.6 billion euros for Hungary. 6.3 billion for Poland and 1.8 billion euros for the Czech Republic.

He sees lower levels of investment due to the lack of major shopping malls and hotel offerings in the area. Office transactions for the CEECs are expected to remain constant, while the number of industrial projects could increase.

The conventional wisdom is that despite the problems with the pandemic crisis and now the war in Ukraine impacting the commercial real estate market, there is still a large amount of capital to invest, and Hungary and Central Europe are attractive investment destinations that offer a yield spread.

The representatives of the Russian Federation were conspicuous by their absence, although Ukraine maintained its presence, albeit with a more limited delegation.

“We worked at MIPIM without a large Ukrainian delegation, as was planned before. In total, we were seven in Cannes. I feel very broad support for Ukraine at the level of exhibition organizers and city representatives,” architect Anna Nestulia said at a public meeting in support of Ukraine.

This article first appeared in the print issue of the Budapest Business Journal on March 25, 2022.