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April 19th, 2018

Optimistic Mood Among Hungarian Real Estate Investors

CBRE has again organized its traditional investment breakfast in which it asked representatives of leading Hungarian companies on the real estate market and the expectations of 2018. The participants were quite optimistic about the prospects.

64% of the respondents believe that billions of euros will boost Hungarian real estate market this year. According to their expectations, at least the turnover of last year, that was 1.7 billion euros will also appear in 2018, but 28% of the respondents also believe that the market will receive even more support, up to 2 billion euros in turnover.

Interestingly, the answers about the origin of investors were almost identical. All agree that close to half of all investors are large Western European institutional investors, a quarter of them will be Hungarian investment funds and a significant proportion of the remaining will be between Chinese, Korean, Russian and Middle East investors.

With regard to the type of investment, the demand for premium office buildings is expected to be around 21%, the proportion of newly built office buildings is 19%, the share of industrial real estates 17%, and alternative investments such as hotels will be around 17%.

Investors worldwide are increasingly buying property in the hope of immediate income, so stable cash flow is also in Hungary the most attractive investment opportunity. Here, however, it is useful to pay attention to the relatively narrow supply of this kind of interest. According to respondents, the biggest challenge for the Hungarian real estate market is the narrow supply (38%) and the tightening financing conditions (23%) pose difficulties for investors.

Though, there is no need to worry, the mood is optimistic. The Executive Director of CBRE believes that "The fundamentals of the Hungarian economy are strong, consumption is expanding, companies are expanding and the impact of EU funds is significant. We believe that in 2018 they will also make significant deals on the Hungarian commercial real estate market and in these transactions will be supported by CBRE's expertise as well. "


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