The View 9

52

Type of scheme Retail Hotel Office Residential

Size (sq m)

500

20,000

40,000

63,000

Real Estate Developments Under Construction in Central Budapest

Source: CBRE Research

RECORD HIGH NEW SUPPLY, ENORMOUS PIPELINE AHEAD The continuously strong key performance indicators, favourable market environment and improving investor appetite all left their marks on the hotel development activity in Hungary as well. After years of steady expansion in new supply volumes the country witnessed an outstandingly strong delivery wave across 2019, with 1,120 rooms in 9 hotels added to the modern hotel inventory countrywide, heavily concentrated in the capital city (8 hotels 1,000 rooms). Although this volume fell a bit short of our earlier expectations, it was still three

times higher than that of the preceding year. The only addition to the countryside stock once again came in the form of a scheme with a significant spa component in Nyíregyháza, as hotels providing wellness-related services remained the top attraction for local guests to target. The 4-star category dominated the market over the year, but there were handovers in the 3- and 5-star categories as well. Due to difficulties in securing construction capacities, more dominant developers moved ahead with large-scale projects rather than small boutique hotels, and the average hotel size notched up further to 124 rooms/scheme, a metric that is not expected to fall back going forward.