The View 9

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Next years’ retail sales forecasts expect Hungary to grow at a more moderate pace compared to the bullish market dynamics seen in recent years. However, retail economic fundamentals are likely to remain healthy and the country is projected to be a top performer in the EU with a 3.6% annual improvement in 2020, slowly decelerating to an average of 2% per annum until 2024. REFURBISHMENTS ARE THE ALTERNATIVES TO NEW SUPPLY In 2019, the Hungarian retail scene welcomed limited new project handovers again and the modern inventory expanded by a mere 10,700 sq m. Both new additions are situated outside the capital: 5,500 sq m Galéria Center retail park by APC Invest was handed over in Mosonmagyaróvár, whilst SPAR opened a new hypermarket on 5,200 sq m with a sizeable speculative retail gallery component in Tata. Apart from these, only Párisi Udvar with 2,500 sq m speculative retail space in the heart of Budapest was a small new addition to the high-street stock with tenants including Calzedonia, Samsung and a quality toy store.

The opening of the next major shopping centre development underway, Futureal’s Etele Plaza in South Buda with 55,000 sq m GLA, has recently been moved to spring 2021. Binding leases are now signed for over 65% of the total area with major international and local tenants. Swietelsky’s Green Park development in the Dunakeszi retail hub will increase the modern stock by 18,600 sq m retail GLA by Q1 2022. The Bogdáni scheme by ECE did not receive exemption from the plaza-stop law and therefore will be developed as a major mixed-use project with sizeable retail area with a high proportion of F&B tenants. In case of retail parks, the pipeline still consists of the two Stop-Shop development projects in Gyöngyös and Salgótarján, each with 6,000 sq m modern space - none of them under construction as of now. As prime new supply has been lagging behind retailer demand for years now, and even more drastically on a CEE perspective, the market has already opened towards alternative solutions to create and refresh new supply both in Budapest and regional cities. One of these sources will be mixed-use real estate developments which include measurable retail components that are to be built on a speculative basis.