While there are substantial pipelines for the industrial and hotel markets in Hungary, things are more limited for offices, and there are none at all for shopping centers. Questions surround the structure of demand, the ability to source affordable finance, rising construction, energy and utility costs, permitting issues, the need to incorporate ESG features, and the likely availability of an exit through a sale.
Office interiors are now an intrinsic part of the project concept, design, leasing strategy, and property and facility management of building developments. That comes in reaction to tenant (and, in turn, staff) demands and increasingly stringent ESG national and EU environmental regulations.
A limited number of office development projects are expected to be undertaken in the immediate future. Developers are exercising caution given an uncertain geopolitical and economic market environment that impacts development costs, debt financing, leasing and take-up, maintenance and property management fees, as well as the possibility of an exit strategy.