Six prominent experts gave a 360-degree overview of the regional real estate market in the post-COVID-19 world at the online edition of Hungary’s Property Investment Forum 2020. We summarised the highlights of the discussion, moderated by Tuza Rita, Head of Capital Markets Hungary at JLL.
Office buildings should be destinations and not obligations, stated Luiza Moraru MRICS, Head of Property Management CEE at CBRE. The forced digitalization brought on by the coronavirus crisis has highlighted the importance of social relationships and interactions. Although 8 of 10 people say that they want to work remotely after the pandemic, the chat with co-workers, the separation between home/office and work/personal life are important aspects that are missing from the working from home culture. Landlords now have the opportunity to transform offices into exciting buildings that integrate many possibilities, depending on the location, profile and environment of the office.
For each office tenant we need a different approach, depending on the sector of the company and the company policies, said Robert Kubinsky, CEO at HB Reavis Hungary. If only 30-40% of the people are in the office since the pandemic has started, as it is the case with one client of HB Reavis, it is necessary to find solutions together to support and motivate people to come back. The implementation of new technologies and services, such as space for relaxing and enjoying time, is fundamental.
Also, surveys across the market to monitor the preferences of people, as well as consistency in the management activities, are necessary to overcome the situation and to secure the sufficient health and safety measures in the offices.
According to Paweł Sapek, SVP, Regional Head CE & Country Manager at Prologis, the logistics sector is the most resistant to the actual turbulences of the crisis. Due to the ongoing shift in the structure of the supply chain, warehouses have become the heart of the operation of many companies. Security for logistics operation has become a top priority and many companies have started discussions about the renewal of their contracts to secure warehouse space. Shopping centres may shut down, but logistics centres can’t.
A very important aspect in this regard is the decarbonization of logistics to decrease the carbon footprint of warehouses and transport, he continued. Features to support sustainability should be implemented even in the development phase while upgrading specifications and equipment are needed during operations.
Regarding financing, not much has changed since the emergency measures – moratoria and support for the retail industry – were announced by the governments in the first weeks of the pandemic. These have pushed down the overall pipeline for a while but after a few weeks, transactions have moved on with big portfolios in Austria. The average loan volume of €2.5 billion a year will be kept this year as well, explained Hannes Wimmer, Executive Director, Loan Syndication at Erste Group Bank AG. The residential sector is also very strong, all the capital cities in the region show strong demand, while there is high pressure on touristic developments and retail, he added.
