It could be a tipping point in the Hungarian real estate market as opportunistic funds and investors express fresh interest, says head of Lakatos, Köves and Partners’ Real Estate practice Attila Ungár.
Mr Ungár noted that this is the first time since the beginning of the economic crisis in 2007 that he sees the first, albeit weak, signs of improvement in the market.
New investors completely ignored Hungary in recent years, but this year Hungary seems to be back on the map, despite the low transaction activity. While many investors still consider Hungary to be too risky, some opportunistic funds and private equity houses and those with larger term perspectives, who are the typical frontrunners in a market opening, are now seeing Hungary as a potentially interesting market.
In recent years those in the market were busy with healing wounds and finding new strategies. Mortgage banks are now still occupied in cleaning up their portfolio. Lending is still stagnant, which is a serious obstacle for new real estate developments.
During the years of recession Lakatos, Köves and Partners’ Real Estate practice grew significantly both absolutely and in terms of market share with focusing on asset and property management, restructuring, debt enforcement and dispute resolution.
"Time will tell whether we are at the beginning of a new period. The increased attention from a group of investors could also signal that the worst is over" - adds Attila Ungár.
Head of the real estate practice group for seven years Attila Ungár cautions that the rising interests of opportunistic funds and the new investors should neither be over emphasized nor ignored. Today commercial real estate is relatively cheap as compared with its value before the crisis. The big question that everyone should ask is: when will the rise of the Hungarian market finally come? As the current situation prompts Hungary can be interesting for investors for whom there is plenty of time to wait for the recovery.