Budapest Business Journal 2706

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

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BUSINESS JOURNAL BUDAPEST

VOL. 27. NUMBER 6

MARCH 29 – APRIL 11, 2019

SPECIAL REPORT Logistics

SPECIAL REPORT

Airport Continues to See Double Digit Cargo Growth

After cargo operations at Budapest’s Ferenc Liszt International Airport returned another record in 2018, hopes are high that this year will see a further rise in figures, along with the rising walls of the new facilities at its hub.  15

SPECIAL REPORT

Foxpost Says it Will Turn Profitable Within Months as E-commerce Grows Hungary’s largest automated parcel terminal operator Foxpost is set to turn profitable in a few months’ time, the company’s CEO and founder Ádám Bengyel tells the Budapest Business Journal.  21

Talking to Government

SOCIALITE

Walking Through Budapest’s ‘Doorway to a Higher Mind’

David Holzer overcomes his reservations to investigate what makes the BrodyLand concept work in Budapest.  30

NEWS

One-off Move no Sign of new Monetary Cycle

The Hungarian central bank made its first tightening move in years, while emphasizing that it does not signal the start of a new monetary policy cycle. Analysts do not now expect a rise in the key rate this year.  3

BUSINESS

NE BUSI

SS

AmCham Hungary has just delivered its latest recommendation pckage to the government. CEO Írisz Lippai Nagy and President Farkas Bársony talk us through the key elements. 5

Hungary Helping Bring Sustainability Into Fashion

Now in its fourth year, Global Sustainable Fashion Week is a unique Budapest-based event that combines an international conference, workshops, displays and fashion shows dedicated to the sustainable and ethical.  12

2 | 1 News BBJ

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Budapest Business Journal | March 29 – April 11, 2019

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Zsófia Czifra, Kester Eddy, Bence

Gaál, David Holzer, Levente Hörömpöli-Tóth, Christian Keszthelyi, Gary J. Morrell, Robert Smyth, Zsófia Végh, Zalán Zubor.

LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Zsolt Pataki PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

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Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor. Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu SUBSCRIPTIONS: Budapest Business Journal 1 year 6 months 3 months

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News Services Hungary A.M., Energy Today, Regional Today 1 year, from HUF 179,000+VAT 6 months, from HUF 104,900+VAT 3 months, from HUF 58,900+VAT Book of Lists 2018-2019: HUF 20,900+VAT DigiBOL HUF 39,900+VAT Call +36 1 398-0344 or email circulation@bbj.hu What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential.

When I first arrived in this country in the late 1990s, I recall government literature extolling the virtues of Hungary’s central location and good infrastructure from a logistics point of view. Since the country has not changed its geography, the former still applies. And since the country’s motorway network has only expanded since 1998, clearly the latter still holds true, too.

What has changed, in the recent couple of years, are the attempts to further develop the rail network. First there is the Chinese funded north-south BudapestBelgrade connection, which is eventually supposed to link with Athens and form part of China’s Belt and Road initiative to pave the way for Chinese goods to reach European markets. This is a roughly USD 3 billion high speed upgrade to existing track, with a possible completion date of 2023.

Then there is the high speed Visegrad Four line linking Budapest, Bratislava, Prague (or perhaps more likely Brno, with a later spa to Prague) and Warsaw that the V4 announced in October, and which has attracted the interest of the European Investment Bank. This is only at the feasibility study stage, with each country financing research into its own stretch of railway. There has been no suggestion of an overall cost or a likely timeframe, although EIB vice president Vazil Hudák did tell this newspaper in our last issue it would be “extremely challenging, spanning many years and involving significant financing”.

And then just this week, news broke of a proposed westnortheast line taking in Pécs, Szeged and Debrecen, and also including links with Vojvodina (Serbia) and Oradea (Romania). This 500 km, HUF 800 billion project, with

a development timeline of eight-ten years, is perhaps most notable for its source. It is apparently being championed by one of the Prime Minister Viktor Orbán’s former lieutenants, MP János Lázár, who was all but omnipresent when he was the cabinet chief in the last government, and has been barely heard from since. Lázár told his local newspaper Délmagyarország that Orbán has accepted the idea, and the rail line will feature on the agenda of a joint cabinet meeting of the governments of Serbia and Hungary in April.

Thus far the Chinese-funded project seems the most likely to actually go ahead anytime soon, but the rush to rail shows how seriously the expansion (or at very least the discussion) of the logistical infrastructure is being taken. The fact that it is not just about more roads should also be welcomed.

And as our special report on the subject in this issue demonstrates, Budapest Airport is more than keen to play a role too, after yet another year of double digit cargo growth. Given the recent media reports of government sources being unhappy with how the airport is run, and the oh-so-subtle suggestion from the billionaire investor Lőrinc Mészáros, a key Orbán ally, that he would not mind running the airport, despite having no experience in the field, I thought the comment from Budapest Airport’s communication director Mihály Hardy that it enjoys the “very active support of the Ministry of Foreign Affairs and Trade, including the full personal backing by Minister Péter Szijjártó,” particularly telling.

Robin Marshall Editor-in-chief

Photo: MTI/Zsolt Szigetváry

Photo: Fortepan.hu/Tamás Urbán

The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

EXPANDING LOGISTICS INFRASTRUCTURE STILL KEY TO GROWTH

THEN & NOW

BBJ-PARTNERS

VISIT US ONLINE: WWW.BBJ.HU

The color photo shows a crowd gathered on March 15 to commemorate the start of the Hungarian Revolution of 1848 in front of the Hungarian National Museum. The black and white picture from the Fortepan public archive shows a similar event in 1976 at the same location.

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Budapest Business Journal | March 29 – April 11, 2019

News///macroscope

One-off Move is no Sign of new Monetary Cycle

In a somewhat eyebrow raising action, the Hungarian central bank made its first tightening move in years, while emphasizing that it does not signal the start of a new monetary policy cycle.

Analysts do not now expect a rise in the key rate this year.

György Matolcsy, governor of the National Bank of Hungary (MNB), makes a point at a press conference at the headquarters of the central bank on March 26, following the latest meeting of the rate setting Monetary Council. He is flanked by his deputy governors Márton Nagy (left) and László Windisch (right). Photo: MTI/Szilárd Koszticsák

ZSÓFIA CZIFRA

In the first tightening move in years, the Monetary Council of the National Bank of Hungary (MNB) decided to raise the overnight central bank deposit rate by 10 basis points to -0.05% at its latest ratesetting meeting.

However, central bank governor György Matolcsy was quick to emphasize at a press conference following the meeting that the MNB has reached its mediumterm inflation target and would continue to maintain its dovish policy. The tightening did not signal the start of a new monetary policy cycle, he said.

The council has left the base rate unchanged

at

0.9%

as well as the O/N collateralized central bank loan rate. At the policy meeting, the MNB set the amount of liquidity to be crowded out from central bank instruments at “at least” HUF 300 billion-500 billion, down from HUF 400 bln-600 bln in the first quarter.

The MNB has left the base rate on hold since signaling an end to an easing cycle at a policy meeting in the spring of 2016.

Following that, the central bank deployed what it called “targeted, unconventional instruments” to ease monetary policy

Inflation Forecast Raised In a preliminary release on Tuesday of the main forecasts from the latest “Inflation Report”, the MNB said that inflation could reach 3.1% both in 2019 and 2020, higher than

further, and at recent policy meetings, the council has repeatedly expressed that it is “prepared for the gradual and cautious normalization of monetary policy”.

CIB Bank analysts still expect the base rate to remain 0.9% until the beginning of 2020, and the three-month BUBOR rate to still be at 0.9% at the end of 2019.

Fluctuating Inflation

The council also stated following the meeting that inflation “will fluctuate around” the 3% target in the coming quarters, while the measure of core inflation excluding indirect tax effects is “expected to continue to rise until the autumn months and then to decline from the end of 2019”.

“Hungary is set to start wrapping up one of Europe’s longest ever monetarystimulus campaigns, though it’s unclear

its earlier forecasts. The central bank is thus raising its forecasts for inflation for this year by 0.2 of a percentage point, and for 2020 by 0.1 of a percentage point, compared to the estimates it gave in the December report.

how aggressively it will tighten policy,” news site Bloomberg wrote just before the latest rate setting meeting.

“While no change is forecast for the base rate, an instrument that has mostly lost its relevance due to the unconventional toolkit, analysts are split over whether an increase in the overnight deposit rate from -0.15% will happen,” Bloomberg wrote.

Analysts asked by Reuters were also divided: while all the analysts participating in the Reuters poll unanimously projected that the MNB would leave the base rate on hold, eight of the

13

analysts

said that the central bank would start to raise its -0.15% O/N deposit rate.

Most, however, foresaw a higher, 15 basis points rise, and only two predicted the ten bps hike.

Holding the base rate at its current level is in accordance with market expectations, CIB Bank analyst Sándor Jobbágy told state news agency MTI. CIB Bank analysts still expect the base rate to remain 0.9% until the beginning of 2020, and the three-month BUBOR rate to still be at 0.9% at the end of 2019.

Normalization Signaled

Jobbágy added that raising the overnight deposit rate was a signal towards normalization, and he believes that the overnight rate has much more significance than the unchanged base rate. Although no change in the base rate can be expected this year, the council can fine tune its policy by changing the swap liquidity.

Gergely Suppan, head analyst at Takarékbank, said that he only expects a rise in the base rate when the rate corridor

becomes symmetrical around the key rate, which is not likely to happen earlier than the middle of 2020.

The normalization process will probably be slow and gradual, mainly because the inflation seems to be controllable at the moment, and also because external monetary conditions are significantly loosened as major central banks once again moved in that direction. Therefore a gradual tightening of the Hungarian monetary policy will be enough to slowly strengthen the Hungarian currency, which can also support reaching the inflation target.

The decision sent the Hungarian currency to the lows: at 15:11 on Tuesday, the forint was trading

at

318.7

versus the euro, sharply weaker than 315.78 before the rate announcement, and the biggest one-day fall in years if it remained in that region.

Numbers to Watch in the Coming Weeks Retail trade figures for February will be published by the Central Statistical Office (KSH) on April 5. The very same day, the first estimate of February’s industry performance will be released; the second estimate with the detailed figures will come out on April 12. On April 9, the KSH will publish the consumer price index for March.

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Budapest Business Journal | March 29 – April 11, 2019

Growing Number of Investors Drawn to MIPIM The 30th annual MIPIM commercial property expo on the Cote d’Azur is a barometer of how the different commercial property market sectors and regions are viewed by international investors and developers against the wider economic climate.

GARY J. MORRELL

The number of attendees at the Palais des Festivals in Cannes has continued to rise and reached 26,800 delegates this year, a figure that is close to the numbers who attended MIPIM in the pre-crisis days.

Country, city and company representatives from Hungary, Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania and Ukraine showcased their markets and projects to leading international investors and financiers.

An increased amount of capital is flowing towards the commercial real estate sector as capital looks for a home. As many as

5,400

representatives

of investment and financial companies from 100 countries attended MIPIM 2019 according to REED Midem, the organizers of the four-day event.

From the supply perspective, CEE developers and country representatives perceive the need to promote their cities and development projects at such major international property and investment expos as MIPIM and Expo Real in Munich.

To that end, the Municipality of Budapest, the Hungarian Investment Promotion Agency and the Association of Property Developers’ Round Table (IFK) established “Budapest-Hungary Time To Invest”, a joint stand. Developers Atenor, Futureal Group, Gránit Pólus

Group, GTC Hungary, HB Reavis, Horizon Development and Wing all presented projects due to hand over in 2020.

“I think the importance of the BudapestHungary stand is to promote the city and Hungary rather than individual projects,” commented Attila Kovács, managing director of Horizon Development at MIPIM, who presented the Szervita Square office, residential and retail project.

Róbert Ésik, president of HIPA, added: “For HIPA, MIPIM is especially important, since it gives us the opportunity to present Hungarian real estate development projects to international investors at one of the most significant events of the sector.

In the first quarter of the year, we have already concluded EUR 1 billion in FDI, which gives a competitive edge over our Central European neighbors.”

Visegrad Four

The Visegrad Four countries (Hungary plus Czech Republic, Poland and Slovakia) had another record year for investment volumes in 2018 with almost EUR 12

The Hungary-Budapest stand at MIPIM.

billion in assets traded according to Cushman & Wakefield. The leading market by far was Poland with EUR 7.22 bln.

Czech Republic recorded EUR 2.35 bln and Hungary reached EUR 1.64 bln, while Romania reached EUR 970 million and Slovakia EUR 720 mln; 2019 is expected to be another strong year for the region.

“The fundamentals of the market are good, with strong occupier markets, rents not overpriced, and interest rates not expected to rise. More investors have been focusing on core capital, and this should continue,” commented Jonathan Hallett, head of CEE at Cushman & Wakefield.

Reflecting positive tenant and investor demand in both CEE and the wider Europe, a number of large, urban projects were showcased. The Belgian Atenor presented the

72,000 sqm phased,

speculative Aréna Business Campus in Budapest, the second large, phased office project by the developer in Hungary after Váci Greens. Such ambitious, largescale projects reflect the current longterm confidence in the Budapest office market as all high end office projects are attracting multiple bids from both local and international investors.

Jan Hübner, CEO at HB Reavis Hungary, commented that investors were already showing an interest in the Agora Budapest project, the first 30,000 sqm phase of which is due to complete by the end of the year.

“The shifting paradigm is from real estate as a cost item to real estate as a product enhancer,” he said at a panel discussion on Budapest 2030. The aim is to make Budapest one of the most livable cities in Europe according to Gábor Bagdy, deputy major of the capital city. Many discussion forums at MIPIM were concerned with issues related to design, sustainability, life-style and city management issues, reflecting tenant demand at the top end of the markets.

Another large-scale Central European mixed-use development project unveiled at MIPIM was the 230,000 sqm Towarowa 22 office, hotel and residential project on a 6.5-hectare site in the Wola district of Warsaw by the prolific developers and investors, EPP and Echo Investment, designed by the Copenhagen-based BIG architects studio.

Multi-function Ambition

“Our ambition is to create a multi-function, well-designed neighborhood that will attract people and encourage them to live, work and spend free time there,” said Mikael Andersson, project director at Towarowa 22.

Construction work on the EUR 1 bln project is due to commence in two years.

In Romania the fifth district municipality of Bucharest promoted what Daniel Florea, its mayor, describes as the “most attractive piece of real estate in Romania in the last 30 years”. The masterplan of the EUR 800 million-100 million project is designed to include more than

10,000 residential

units, a 70,000 sqm commercial area and 300,000 sqm of offices and large green areas. The transport hub has an estimated 400,000 people who commute daily.

Kyiv was promoted by its mayor, the former world heavyweight boxing champion Vitali Klitschko, who emphasized the development possibilities and the high yield returns, albeit for higher risks than the established Central European countries.

Poland had the largest representation from the region with both Warsaw and several provincial cities promoted. That said, Hungary is attracting increasing interest from investors with a significant yield premium on Poland and Czech Republic.

Office, logistics, hotel and specialized residential are currently the preferred investment objects, while the retail sector is being treated with some caution.

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Budapest Business Journal | March 29 – April 11, 2019

Business

Digitization a Priority in AmCham’s Recommendations to Government

The American Chamber of Commerce in Hungary has sent its latest recommendation package to the government. President Farkas Bársony and CEO Írisz Lippai-Nagy walk the Budapest Business Journal through the key highlights.

ROBIN MARSHALL

BBJ: The latest “Cooperation for a More Competitive Hungary” recommended package has now been sent to the government. Of course, it is a complex, inter-connected document, but what would you say are the stand out recommendations? Is there one game changer here?

Farkas Bársony: Our recommendation package focuses on four areas: general business climate; competitive workforce and education; innovation and R&D; and digitalization. This year, digitalization has become a priority. Considering Hungary’s strengths in ICT, the digital revolution offers tremendous opportunities for us to find a competitive edge and we wanted to emphasize this in our proposal. We also have new suggestions to encourage innovation, tech investments and to support cooperation between higher education institutions and businesses in R&D&I. Írisz Lippai-Nagy: Career orientation is another subject where we felt a growing momentum. We started the Career Orientation Program last November to connect secondary schools with companies to facilitate knowledgesharing. This spring we have launched a roadshow in Debrecen, Székesfehérvár and Pécs to further expand the initiative outside the capital.

BBJ: Does it differ markedly from last year’s package? Is this evolution or revolution?

FB: Evolution. We always have new suggestions to address issues critical to our competitiveness. Of course, there are recommendations we carry over from previous years – finetuned or expanded – such as the unification of digital government services.

ÍLN: Perseverance is essential. We know that most of our proposals cannot be executed in a year.

BBJ: If there are two issues in the Hungarian news more than any others, aside from politics, it is the labor crisis and the country’s demographics. What recommendations does the package have on these fronts?

FB: The solution to the labor crisis and the foundation of long-term competitiveness is a reformed education and training system. We need to make sure that the next generation of our workforce is better prepared for the expectations of the rapidly changing labor market. That is why we advocate introducing a skill- and competency-focused national curriculum, stronger business and university cooperation and more effective foreign language education. ÍLN: We do not forget about our teachers either. They are essential to highquality education and the prestige of this profession must be restored. The chamber believes stronger financial support, revised training and more effective cooperation with the corporate sector are the first steps in the right direction.

On the other hand, adult training and retraining could be a short-term solution to labor issues. The system must be revamped first to respond to the challenges of our times: skills development is of the utmost importance. Moreover, we need to promote flexible work arrangements, particularly part-time employment and teleworking. The keywords are adaptability and flexibility in all areas.

BBJ: The package is a reflection of AmCham’s year-long advocacy, but how long does the package itself take to put together to present to government?

What are the follow up steps from here? ÍLN: It takes a year to compile the package.

Our advocacy groups, the policy task forces and committees, serve as the hub of knowledge sharing within the chamber.

They work tirelessly to refine the collected input which is then discussed with representatives of the government.

In 2018, we consulted ministers Péter Szijjártó [Foreign Affairs and Trade], László Palkovics [Innovation and Technology], Mihály Varga [Finance] and László Trócsányi [Justice] as well as state secretaries László György, Norbert Izer and the various representatives of the Ministry of Human Capacities, the Hungarian Investment Promotion Agency, the National Research, Innovation and Development Office, the Hungarian Intellectual Property Office and the National Authority for Data Protection and Freedom of Information.

FB: And the cycle continues. We have already sat down with State Secretary László György and we will meet Minister Szijjártó in April. The recommendation package is the collective effort of dozens of people who are devoted to make a difference. It is truly special to be a part of this process.

BBJ: A few years back, AmCham fundamentally changed the way it went about its advocacy work; the package is

one of the results of that overhaul. Has it achieved the results you hoped for?

FB: Absolutely. Over the years, we have built a strong working relationship with the government. They count on the expertise of our membership. Since the first package in 2016, several policy measures and initiatives introduced by the government are harmonious with our proposals: the taxation and incentive system related to R&D activities has been redesigned and improving the local innovation ecosystem has become a priority. Further reductions have been made to taxes on employment, new amendments were introduced to promote flexible employment and the national curriculum has been modernized to focus on competencies and skills.

BBJ: When you peer-evaluate the Hungarian economy with your sister organizations in the region, how does Hungary score? Is this an easy country in which to do business?

Is it getting easier? ÍLN: The competition is fierce, but we are in a good position; I believe the growing number of investments can attest to that. We provide stability and a great infrastructure. Even though it is difficult to find the right talent, investors are satisfied with the quality of our workforce and the costs of employment are still favorable.

FB: The reduction of the corporate income tax to 9% was an absolute game changer. The “Invent in Hungary” paradigm shift is another great direction as we believe that shifting our focus towards high added value activities will move our economy forward.

As for AmCham, we are determined to work with all relevant stakeholders to proceed with our mission to make Hungary more competitive.

AmCham CEO Írisz Lippai-Nagy, left, with President Farkas Bársony.

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Budapest Business Journal | March 29 – April 11, 2019

92% of Hungarian CEOs say Finding Right Talent has Become Increasingly Difficult CEOs’ confidence in both the global and Hungarian economic growth is “subdued” compared to last year, according to the eighth survey of local business leaders by PwC Hungary. Here are just a few of the highlights.

Despite this, CEOs remain confident about their own organizations’ success, which they aim to ensure by focusing on operational efficiencies, innovation and human capital.

While everyone agrees data plays a key role in decision-making, few CEOs are satisfied with the quality and scope

of their data. While the majority of global and Hungarian CEOs agree that AI will dramatically change their business over the next five years.

Plans for 2019

The overwhelming majority of both Hungarian (87%) and global CEOs

(77%) say they are planning operational efficiencies to drive revenue growth.

The next two items on global CEOs’ list of activities are organic growth (72%) and launching a new product or service (62%). In Hungary, launching a new product (56%) precedes organic growth (51%).

Which of the following activities, if any, are you planning in the next 12 months in order to drive revenue growth?

(Respondents planning to carry out the activity in question, multiple selections were possible) 87%

77%

Operational efficiencies Launch a new product or service

56%

62%

Organic growth

51%

72%

Enter a new market

30%

37%

Collaborate with entrepreneurs or start-ups

24%

New strategic alliance or joint venture

21%

37%

Outsourcing

14%

Other

10%

4%

Sell a business

6%

14%

N=236

CEOs affirmed that the unavailability of key skills affects their growth prospects.

Among the impacts noted are higher people costs, deteriorating customer experience, missed market opportunities, and not being able to innovate effectively.

As a consequence, 44% of global CEOs and 37% of Hungarian CEOs believe they are missing their growth targets.

Ninety-two percent of Hungarian CEOs reported that finding the right talent has become increasingly difficult over the past year (slightly down from the 95% in 2018). The most frequently cited solution to the skills gap – selected by every fourth CEO (27%) – is establishing a strong pipeline direct from education. Twenty-three percent see significant retraining/upskilling as the answer, while every fifth CEO (19%) considers hiring from competitors an option. Globally, nearly every second company (46%) sees retraining/ upskilling as the solution.

40%

New M&A

20%

Impact of the Skills gap on Growth Prospects

32%

N=1378

“The findings of our survey conducted at the end of 2018 show that, both globally and in Hungary, CEOs are optimistic about their own organizations’ revenue prospects, but their confidence has declined regarding global and local economic growth.

Nine out of ten CEOs in Hungary, and eight out of ten globally expressed confidence about their own organizations’ revenue growth prospects for 2019.”

Dr. Barbara Koncz, Director, PwC Hungary Tax and Legal Services.

What impact is the skills shortage having on your company’s growth plans?

(Respondents who selected in question, multiple selections were possible) Our people costs are rising more than expected

76% 42%

We are unable to pursue a market opportunity

42%

Our quality standards and/or customer experince are impacted

52% 44% 47%

We are missing our growth targets

37%

44%

We are not able to innovate effectively

29%

55%

We cancelled or delayed a key strategic initiative

16% 7% 2%

N=236

22%

Other

3%

There is no impact on my organisation’s growth and profitability

4%

N=1378

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Budapest Business Journal | March 29 – April 11, 2019

Financial forecasts and projections

51%

94%

90%

Data about your brand and reputation

34%

85%

82%

76%

Data about how the latest technology trends benefit or disrupt the industry

21%

Data about tax implications / risks arising from your decisions

47%

72%

Data about your supply chain

27%

59%

29%

86%

90%

18%

Data about the risks to which the business is exposed

15%

76%

94%

24%

Benchmarking data on the performance of your industry peers

10%

92%

15%

Data about your employees’ views and needs

42%

89%

41%

Data about your customers’ and clients’ preferences and needs

26%

85%

22%

87%

15%

86%

22%

69%

21%

66%

Diversity of your workforce

36%

53%

Data about the effectiveness of your R&D processes

20%

30%

Data about the impact of climate change on the business

11%

N=236

16%

70%

42%

N=1378

Important (respondents who consider the type of data indicated important)

“Leaders’ expectations have certainly risen as technology advances, but decisionmakers are aware that their analytical capabilities have not kept pace with the volume of data which has expanded exponentially.

The information gap is also alarming in one of the most critical areas: customer needs. This needs to change as soon as possible in order for companies to play a successful and sustainable role in business and society.”

Dr. Tamás Lőcsei, PwC Hungary’s CEO.

17%

|7

Enough Data to Support Decisions?

Adequacy of data considered important for decision making 98%

Business

Comprehensive (respondents who receive comprehensive data in the category in question

CEOs seem to be in agreement on the value of data: nearly all respondents indicated a willingness to use data to ensure the long-term success and durability of their business.

And yet, despite massive investments in IT infrastructure over the past decade, CEOs report that they are still not receiving the comprehensive data they need to make key decisions.

The only exception is financial information, with 51% of Hungarian CEOs satisfied with what they get. For all other data types, less than 50% of respondents reported receiving comprehensive data.

What are the primary reasons for the inadequacy of data received?

Globally, most CEOs cited lack of analytical talent in their organizations (54%), followed by data siloing and lack of sharing (51%), with half of them also identifying poor data reliability. Hungarian CEOs see the latter reason as the most important (48%), followed by unwillingness of customers and clients to share information (38%). Inability to quantify external information and data siloing and lack of sharing rank third (33%) and fourth (31%), respectively. Lack of analytical talent was only cited by 29% of Hungarian CEOs. Despite the above difficulties, 50% of CEOs globally and 41% in Hungary said that their organization’s ability to make decisions based on data and analytics was ahead of their competitors, with 37% saying they were at about the same level, and only 12% indicating globally and in Hungary that they were behind in this respect.

AI: Solution or Threat?

Percentage of CEOs agreeing with statement 60%

AI will dramatically change your business over next 5 years?

85%

AI will have a larger impact than internet revolution

71%

69%

AI-based decisions must be transparent and explainable in order to be trusted

85%

54%

AI will displace more jobs than it creates effect

84%

49%

The survey was conducted in cooperation with the Confederation of Hungarian Employers and Industrialists (MGYOSZ). In parallel with the Hungarian survey, which was based on in-person interviews, PwC conducted nearly 1,400 interviews with CEOs worldwide. This enables comparison with the thinking and strategic direction of Hungarian CEOs. The full survey report in Hungarian and English, a promotional video and further details are available on PwC’s Hungarian CEO Survey website (www.pwc.com/hu/ceosurvey).

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WHO’S NEWS

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Budapest Business Journal | March 29 – April 11, 2019

Do you know someone on the move? /// Send information to news@bbj.hu

Szecskay Appoints Partners Szecskay Attorneys at Law has announced the promotion of Miklós Boronkay and Róbert Dezső as partners. The promotions reflect the firm’s increased workload and strategic focus on specialized, high-ticket litigation, as well as on advisory and contentious tax, Szecskay told the Budapest Business Journal.

Boronkay now heads the firm’s dispute resolution practice. One of his main focuses is further developing Szecskay’s growing niche practice within antitrust damages cases, including a forthcoming hearing in a landmark case before the Court of Justice of the European Union.

Boronkay will also continue to advise clients in major international and

Miklós Boronkay Hungarian arbitrations and in court proceedings. He will keep on acting as an arbitrator listed on the Roll of Arbitrators of the Permanent Arbitration Court attached to the Hungarian Chamber of Commerce and Industry (MKIK). Boronkay originally joined the firm in 2007.

Dezső now heads the firm’s tax and customs practice, having secured several landmark victories in court on behalf of clients and against the Hungarian tax authorities in recent years. Dezső’s ability within tax law advocacy before

Róbert Dezső the Hungarian Supreme Court was recognized by Wolters Kluwer, which granted him the Award for Jurist of the Year 2017 in the category “Cases of theoretical significance”.

Dezső also leads big-ticket litigation in other areas of commercial law. Being a native German speaker, he is a key asset to the firm’s German Desk, serving as a trusted advisor to clients in Germany and Austria. Dezső works across all transactional matters, from startups, to M&A and capital markets issues.

Noerr Names Associated Partner Full-service law firm Noerr has announced the appointment of Viktor Füzi as associated partner at its Budapest office.

Füzi has been with Noerr for more than 2.5 years, advising major international

clients on a range of corporate, employment and investment advisory projects during his time at the company. He heads the employment and litigation practice in

competitors. He was made a director in the group’s audit and financial consulting division, and expanded it by attracting key clients, while also leading the audits of a number of transformations, as well as government grants and EU subsidies, and participating in multiple due diligences.

Alongside his Hungarian qualifications, he has also acquired the international ACCA auditor qualification, and speaks both English and German, as well as his native Hungarian

Law Firm Kinstellar Names Partner Viktor Füzi Budapest. Before joining Noerr, he worked for Rödl & Partner for more than nine years.

After graduating from Eötvös Lóránd University (ELTE) in Budapest, Füzi completed his legal studies at Ludwig Maximilian University in Munich. He is fluent in both German and English.

“Viktor has brought on board valuable market knowledge and client relationship skills and his appointment is evidence of the success of Noerr’s growth strategy in Hungary and the CEE at large,” said Zoltán Nádasdy, Noerr’s office managing partner in Budapest.

Independent law firm Kinstellar has announced that Gábor Gelencsér has joined the Budapest office as partner of the firm’s Hungarian M&A & Corporate practice.

Gelencsér has more than 15 years of experience handling a diverse range of cross-border as well as domestic corporate transactions, including management and oversight of numerous mergers, joint ventures, due diligence exercises and organizational restructurings.

Prior to joining Kinstellar, Gelencsér worked as senior counsel at CMS Cameron McKenna Nabarro Olswang Ormai & Partners in Budapest, having previously been seconded to the firm’s London office.

Szabolcs Szeles Made Partner at WTS Klient Business consultancy service provider WTS Klient has announced the appointment of Szabolcs Szeles as a partner, tasked with directing the firm’s direct financial consulting branch.

The appointment, effective from January 1, also brought about an organizational change at HLB Hungary, the entity within the Klient Group that focuses on auditing.

Szeles is also responsible for heading up the work of HLB Hungary as a partner.

He will be the company’s seventh partner. By appointing him as a co-owner, WTS Klient says it aims at ensuring the same dynamic progress in the coming years in its fifth key area of business that has already been produced recently in the firm’s tax consulting, accounting, payroll, and legal consulting divisions.

“We are extremely delighted to welcome Szabolcs among the owners of the group,” said Zoltán Lambert, managing partner of WTS Klient. “We trust that his activities will continue to lend momentum to the development of the Klient Group.”

Szeles started his career in the Cologne office of Big Four firm KPMG, before working for a medium-sized audit and

Gábor Gelencsér He has been recognized by the main international legal directories Chambers and Legal 500 as one of the leading lawyers in Hungary for corporate/M&A matters.

Gelencsér earned an LL.M. degree in International Business Law from Central European University in Budapest, and holds a J.D. degree from the University of Pécs. He speaks Hungarian, English and German, and is a member of the Budapest Bar. “Gábor’s skill set, client relationships and experience representing both multinational corporations and Hungarian companies in complex domestic and cross-border transactions aligns with our focus to continue to expand our premier corporate and private equity M&A practice, both in Budapest and regionally,” said Csilla Andrékó, managing partner for Hungary at Kinstellar.

Telenor Appoints Corporate Comms Director Szabolcs Szeles tax consulting company in Wuppertal, Germany. He returned to Hungary after gaining several years of professional experience in Germany, joining the Klient Group in 2006 as a manager after spending a short period at one of the company’s

Telenor Hungary has announced the appointment of Attila Mészáros as its new corporate communications director, responsible for sustainability as well as the internal and external communications of the firm, according to the mobile operator’s website.

Mészáros has almost 20 years of experience in communications and marketing in the ICT sector. Starting in 2008, he was responsible for directing Cisco Hungary’s marketing and

communications activities as marketing and PR head. Then, after 2012, he was responsible for marketing and communications campaigns in more than 15 countries as Cisco’s regional director.

Attila Mészáros In the past two years, Mészáros worked as marketing director for four branches of a small Hungarian medicine company.

The new communications director is a qualified economist. He started his career on the communications agency side in managerial and advisory positions, with clients including PanTel, Cisco, Oracle, Sun Microsystems, Sony Ericsson, and Albacomp.

Mazars Picks CEE Head of Business Development Audit, accounting and consulting group Mazars has announced the appointment of András Bagyura as head of business development in the CEE region, covering Albania, Austria, Czech Republic, Croatia, Poland, Hungary, Russia, Romania, Slovakia, and Ukraine.

From the beginning of 2019, Bagyura is responsible for harmonizing and coordinating the business development activities of the regional Mazars offices.

Prior to his appointment, Bagyura had been head of business development of Mazars Hungary, since 2012. In his new role, he will work with the former Czech business development manager, Martina Kučerova, who will be primarily responsible for implementing the SalesForce CRM system.

“For Mazars, CEE was always particularly important. We have been present in the region for almost 20 years and our group is already among the five largest consulting firms in corporate transaction consulting,” says

András Bagyura Bagyura. “However, we have set even more serious goals now: Mazars plans to be a leading player in the audit, advisory and management markets across the CEE region.”

Bagyura, who speaks fluent English, worked for one of the world’s leading credit insurers, Coface, and Hungarian export credit insurer Magyar Exporthitel Biztosító Zrt. for more than ten years prior to his career at Mazars. He completed his studies at Corvinus University of Budapest, where he obtained a degree in international economics and then completed a master’s degree in insurance.

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Budapest Business Journal | March 29 – April 11, 2019

Company ///news 4iG, Sauviter win Tobacco ID Contract Listed IT company 4iG, in consortium with IT business Sauviter Zrt., has won a tender called by Nemzeti Dohánykereskedelmi Nonprofit Zrt., to establish a system of unique identifiers for tobacco products, digitalhungary.hu reported. The project is valued at nearly HUF 4 billion and will last five years.

Nemzeti Dohánykereskedelmi Nonprofit Zrt. coordinates the state monopoly on retail tobacco sales. A European Union directive requires members states to gradually introduce systems for tobacco traceability and security from May 20, 2019. The Konzum and Opus group of companies hold the majority of 4iG shares. Both companies are controlled by the billionaire investor Lőrinc Mészáros, a key ally of the prime minister. According to the company, in Hungary some 31 million cartons of cigarettes and roughly the same amount of cut tobacco are marketed a month, digitalhungary.hu said.

Mapei Inaugurates HUF 2.8 bln Expansion The Hungarian unit of Italian building materials company Mapei inaugurated a HUF 2.8 bln expansion at its base in Sóskút (30 km south of Budapest). The investment has raised Mapei Kft.’s capacity to 110,000 tonnes from 55,000 and doubled warehouse space to around 15,000 sqm, managing director Béla Markovich said. Inauguration of a new loader robot named “Sofia” comes amid the company’s aim to further boost automation, vg.hu reported.

hu reported. Extreme Digital will hold 48% of the new company, with eMAG’s Hungarian unit holding 52%. The transaction is still pending approval from the Hungarian competition authority GVH; it is expected to be closed in the third quarter of 2019. Extreme Digital’s net sales amounted HUF 36 billion in 2018, with a profit of HUF 150 million. The company has 320 people on payroll. The new business is expected to generate annual sales of HUF 70 bln. Economic survey company GKI ranked Extreme Digital as the leader of the domestic e-commerce market, followed by eMag and Media Markt.

The Budapest office of Dentons acted for Extreme Digital in the deal.

BMW’s Reasons for Investing in Hungary Revealed At a regular press conference held in Munich after publishing its earnings report, German carmaker BMW revealed several reasons why the company selected Hungary for its latest factory investment, portfolio.hu reported.

BMW’s management said the company’s decision was explained mainly by wage costs. They added that the company is striving to increase its production capacity in Europe as it expects sales in the region to grow further. The manufacturer aims to keep a balance between its three major regions of Europe, North America and China.

Beyond good wage costs, other reasons for picking Hungary were employee flexibility, training opportunities and the life quality of workers.

Extreme Digital, eMAG to Merge

Hankook Tire Workers, Management Reach Deal on pay, Ending Strike

Hungarian online electronics retailer Extreme Digital and the Hungarian subsidiary of eMAG, a unit of South Africa’s Naspers group, will merge, resulting in a major e-retailer covering the Central European region, portfolio.

Union association VDSZ has reached an agreement with the management of Korean-owned Hankook Tire Magyarország over wages, ending a week-long strike, adozona.hu reported.

Management agreed to raise wages

Business | 9

Germany’s FAKT AG in Giant EUR 1 bln Horticulture Investment

Minister of Agriculture István Nagy (left), pictured at the greenfield site with FAKT AG Chairman-CEO Hubert Schulte-Kemper.

Photo: Csaba Pelsőczy/Ministry of Agriculture.

FAKT AG is building a EUR 1 billion horticultural production, processing and logistics center on an area of 330 hectares located on the outskirts of Hegyeshalom and Bezenye (northwestern Hungary), Minister of Agriculture István Nagy told reporters in nearby Mosonmagyaróvár on March 26.

Nagy described the development as unique in Central Europe, centered around a horticultural center able to serve the commercial needs of customers to the highest level across the continent, business news site vg.hu reported. The project will also include a fish farm, 30 hectares of greenhouses, 50 hectares of open-air horticultural area, cooling containers, a conference hall and hotel, as well as motorway access and apartments to be added at a

another 8.5% on top of another increase announced early in March. Hankook announced a 13.6% wage rise following a two-hour warning strike on March 6, but union representatives complained that the unilateral increase was performance based and would favor new hires over long-time employees. VDSZ said workers

later stage. The full investment will create 5,000 jobs, said FAKT AG Chairman-CEO Hubert SchulteKemper. He described the project as the largest agricultural investment of its kind in recent times in Hungary; FAKT aims to turn out agricultural and food products in a modern, sustainable manner, while creating a liveable working and dwelling environment around the site. The investors also plan to cooperate in training, higher education, and research in the region. Official government news website kormany.hu cited SchulteKemper as saying that the site was chosen due to its location on the Budapest-Vienna-Bratislava axis, offering outstanding infrastructure in both the north-south and eastwest directions.

that would have fared worst under that wage increase will now earn 18.5% more at yearend compared to a year earlier.

VDSZ chairman Tamás Székely said about 70% of the workers at Hankook’s plant in Rácalmás (74 km south of Budapest) participated in the strike, adozona.hu added.

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2019. 01. 25. 16:52

10 | 2

Business

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Different Asset Classes: Part I In the first of a series of articles on asset classes, Les Nemethy and Sergey Glekov look at the choices available for building an investment portfolio.

Whether you are an individual managing a portfolio for retirement, or someone who just sold their business and is devising a strategy to invest funds, the choice of asset classes will be the most fundamental investment decision you make in designing your portfolio.

The choice of asset classes should ideally be tailored to: • Your return expectations (what kind of a return do you need to achieve goals, for example, a satisfactory retirement nest egg?)

• Your investment time horizon (e.g. how long to retirement?), • Your risk profile (what degree of risk can you tolerate in your portfolio?),

Real Estate

Luxury

Commodities

Bonds

Illiquid

• Liquidity (how much cash might you need during your investment time horizon?)

• The tax regime to which you are subject (what is the tax rate on different investments in your jurisdiction?).

You should be diversified both in terms of asset classes, as well as investments within each asset class.

Constructing the ideal portfolio for your personal situation is a complex matter, requiring extensive experience and knowledge of various investment alternatives. Choosing an investment advisor might be a step worth considering.

Unfortunately, barriers to entry in the wealth management profession are low;

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Cash Liquid

furthermore, some investment firms receive third party commissions when they place clients into different investments. This is an obvious conflict of interest. If you choose an investment advisor, choose carefully.

In the long-run, your decision of how to spread your portfolio over different asset classes will probably have a higher impact on overall portfolio return than your choice of individual investments within each asset class.

Most experts will include at least three areas in designing a portfolio: • Stocks or equities • Fixed income or bonds • Cash or cash equivalents For more sophisticated clients with larger portfolios, one or more additional asset classes might be added: • Real estate • Commodities (sometimes emphasizing gold, see our earlier series) • Luxury goods (particularly art, but also cars and wine, etc.)

We intend to at least touch on all of the above. We will not deal with other alternative asset classes such as cryptocurrencies, nor with private equity. For the remainder of this article, we will analyze asset class allocation from the perspective of (a) liquidity; (b) risk return ratios.

Liquidity

CONTACT: RENTAL@HARLEY.HU

Stocks

You should always have enough cash or cash equivalents on hand to cover expenses and contingencies (e.g. hospitalization) in the short- to medium-term.

According to the Society of Actuaries, liquidity is a measure of how quickly you can sell something without impacting the price. Real estate and cash lie at opposite ends of the illiquid-liquid spectrum (see illustration above).

Real estate investments and alternative investments often have a lower level of liquidity because of their nature; they are real, tangible assets. It can take many months to sell such assets at acceptable price. On the other hand, certain types of real and other tangible assets may arguably be less volatile than financial assets (bonds and stocks), hence may serve to balance a portfolio.

Please note that there are exceptions to every rule. Certain rarely traded stocks may be considerably less liquid than gold coin. Shares in private companies (e.g. not listed on a stock

exchange) are, in most cases, even less liquid than real estate.

Risk-return Ratio

There is a general principle in finance that the higher the return, the higher the associated risk. According to the efficient market hypothesis, one of the most fundamental principals of finance, is that all information known about a particular stock or investment is already built into the price of that stock or investment.

There has been a multi-decade raging debate in finance about whether the efficient market hypothesis really applies.

My own feeling is that it provides general guidance, but there is a tendency for investors to follow each other; you might call it the “lemming effect”. Hence there may be a tendency for bull markets (as well as bear markets) to perpetuate themselves.

One might subdivide assets into two main categories: • Growth assets generally have higher risk with higher return potential • Defensive assets generally have lower risk with lower return potential Most asset classes can be both growth or defensive. For example, Facebook and Amazon are growth stocks, whereas a preferred share on a stable utility would probably be defensive. Growth stocks typically have no or low dividends, generating returns from price appreciation, whereas defensive stocks often have higher yields, with less potential for price appreciation.

Subsequent articles in this series on asset classes will look at: • Size of markets and trading volumes for different asset classes • Equity as an asset class • Debt as an asset class • Luxury goods as an asset class Disclaimer: This article is intended for informational purposes only, and should not be relied upon for investment advice. It is important to do your own investigation and analysis before making any investments based on your own personal circumstances.

Les Nemethy is CEO of Euro-Phoenix (www.europhoenix.com), a Central European corporate finance firm, author of Business Exit Planning (www. businessexitplanningbook.com) and a former president of the American Chamber of Commerce in Hungary.

2

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Budapest Business Journal | March 29 – April 11, 2019

Business | 11

S TA R T U P S P O T L I G H T

Vehicle Telematics Solutions from Hungary to South America Inventure Automotive, a vehicle telematics solutions company with a growing number of international clients, is looking to expand and develop .

BENCE GAÁL

Inventure Automotive, a vehicle telematics solutions company with a growing number of international clients, is looking to expand and develop .

“We developed our first automotive measuring system based on market demand, where the aim was to discover fuel theft,” CEO Zsolt Nagy explains to the Budapest Business Journal.

Among Eastern European customers, this remains one of the most popular solutions, but times have changed: Inventure now has customers from more than

70

countries.

Originating from an engineering office, the headcount now stands at more than 20, with one or two new hires in both Hungary and abroad monthly.

Inventure defines itself as an OEMindependent in-car technology enabler on the vehicle data aftersales market. According to Nagy, this positions the company in a niche even within the relatively specialist vehicle telematics market.

“As the ICT sector has been around for a long time to collect, store, and analyze data using a variety of Big Data and AI solutions, this trend is multiplying in our market, the telematics. However, the availability of vehicle data is not nearly as easy as for a conventional IT system,” Nagy argues.

While the internal communications systems of vehicles are only partially standardized, and manufacturer specific, Inventure’s solution is able to “wiretap” communications between ECUs regardless of the OEM. Apart from basics like fuel level, consumption, and odometer data, the system can transmit a wider range of parameters such as seat occupancy and wiper status.

Profits Up

Inventure closed a profitable 2018, increasing its revenue by 92%, achieving

a profit proportion of 25% with a sales revenue of HUF 457 million.

“We are now closely associated and working together not only with value added resellers of global telematics companies, but also with the HQs of these telematics companies,” Nagy adds.

This year, the scale-up company delivered products to the South American reseller network of a major European vehicle manufacturer, where sellers offered the solutions as complementary products alongside the OEM offerings.

Last year, Inventure reached a milestone by selling a database license to one of the largest telematics companies.

“We could not gain a better professional validation of the quality of the vehicle data we provide, since the license sale was preceded by several months of detailed data analysis and verification by the customer. On the other hand, the purchase has validated the viability of our transforming business model; there is a growing demand on the market not only for our vehicle electronic hardware devices, but huge manufacturers in some vehicle segments also want our licensed know-how.”

Software components by Inventure are included in the own products of major telematics companies, operating in hundreds of thousands of vehicles worldwide.

Future plans involve fundraising, market segmentation, and focus. Nagy explains that Inventure needs additional capital for long-term plans, as market demands would allow Inventure to grow faster than internal sources can finance.

“Recently, there has been a growing demand for launching a monthly, cloudbased service where telematics companies can download software to their own tracking device to retrieve data they need for specific vehicles. This cloud-based service design is resource-intensive both from a technical and a business point of view.”

To enhance its competitiveness, Inventure says it also plans to expand the range of vehicle types supported, as well as the number of parameters.

2nd district

2nd district

2nd district

29 sqm – 1 room, AttilA street

62 sqm – 2 rooms + HAll, szilágyi e. AveNUe

58 sqm – 2 rooms, HANKóCzKy J. street

Close to the Buda Castle, beautiful view over the Vérmező Park, this very sunny apartment in good condition is situated within a nice, Bauhaus style building with elevator.

This very well divided, sunny, street facing apartment has separate rooms, 9 sqm of balcony, parking space and it is situated within a Bauhaus style building with elevator.

Nice view over the Buda Hills, this very sunny and well divided apartment has private gas heating, 8 sqm of balcony and parking space. It is located in a quiet and green area.

31.500.000 HUF

51.900.000 HUF

52.000.000 HUF

+36.1.336.1706

+36.1.336.1706

+36.1.336.1706

2nd district

2nd district

65 sqm – 2 rooms, KUrUClesi street

200 sqm – 6 rooms, eNdrődi street

904 sqm – lot, róKAHegy

Panoramic view over the Buda Hills, this completely renovated apartment has 22 sqm of very sunny terrace and it is situated within a nice condominium with parking space in the garden.

This very sunny and well divided, three storey, luxury apartment has nice panorama over the Buda Hills and 2 parking spaces. It is located in the diplomatic area.

This panoramic lot has the possibility to build a condominium or a semi-detached house. It is located in a quiet area, close to the Csillaghegyi Open-air baths.

59.900.000 HUF

205.000.000 HUF

49.500.000 HUF

+36.1.376.6080

3rd district

+36.1.376.6080

3rd district

3rd district

+36.70.669.5350

5th district

115 sqm – 2 rooms, CsillAgHegy

80 sqm – 3 rooms, légió street

101 sqm – 4 rooms, KossUtH lAJos street

This spacious apartment has separate rooms, big terrace, garage and direct connection to the garden. It is situated within a nice condominium with common swimming pool.

This very bright, spacious, well divided apartment benefits of a big terrace and garage. It is located in a quiet and green area.

View over the Astoria, this high floor apartment has separate rooms, two bathrooms and private gas heating. It is situated in a period building with elevator. Currently it works as a hostel.

55.900.000 HUF

56.900.000 HUF

260.000 eUr

+36.70.669.5350

6th district

+36.70.669.5350

7th district

+36.1.351.0446

11th district

226 sqm – 6 rooms, ANdrássy boUlevArd

132 sqm – 3 rooms + HAll, WesseléNyi str.

64 sqm – 3 rooms, temesvár street

Nice view over the Kodály körönd, this very spacious apartment in good condition benefits of a balcony and it is situated within a beautiful, renovated period building with elevator.

This very sunny and spacious, street facing apartment has separate rooms, two bathrooms and private gas heating. All of the furniture is included in the price.

This well divided, bright, quite, street facing, top floor, duplex apartment in good condition has separate rooms and private gas heating.

226.000.000 HUF

72.000.000 HUF

+36.1.351.0446

11th district

+36.1.351.0446

11th district

53.900.000 HUF

+36.70.337.2319

12th district

133 sqm – 5 rooms, Nádorliget sUbdivisioN

277 sqm – 8 rooms, KeleNvölgy

135 sqm – 5 rooms, gAlgóCzy street

In a quiet side street, this very well divided, completely renovated, park facing apartment has balcony and two parking spaces. Is situated within a new built building.

Panorama over the Buda Hills, this four storey semi-detached house in good condition has terrace and 509 sqm of private garden. It is situated in a quiet, green area.

This well divided detached house built on 895 sqm of lot, benefits of a panoramic view, separate rooms, terrace, balcony and a three car garage. It is located in a quiet and green area.

125.900.000 HUF

130.000.000 HUF

127.000.000 HUF

+36.70.337.2319

13th district

+36.70.337.2319

13th district

+36.1.376.6080

13th district

52 sqm – 3 rooms, Hegedűs gyUlA street

62 sqm – 3 rooms, Kresz gézA street

86 sqm – 3 rooms, bAlzAC street

In a very impressive, Bauhaus style building, in the inner part of the district, this well divided, street and garden facing apartment in good condition benefits of an open-plan kitchen.

A well presented, recently refurbished, spacious apartment within a nice, well maintained period building. Perfect opportunity for investment and rental purposes.

This fabulous, well divided, very sunny apartment is situated within a stunning period building with elevator. It can be converted into a 4 room apartment. Close to the WestEnd shopping mall.

39.900.000 HUF

39.900.000 HUF

56.900.000 HUF

+36.70.414.7759

+36.70.414.7759

+36.70.414.7759

grUppo t.F.m. KFt. 1068 bUdApest, Király U. 102.

Inventure Automotive’s management, from left: Zoltán Kánya, Zsolt Nagy and Viktor Nagy.

each agency independently owned and operated. • these offers are valid, till the apartments are sold. • these information do not constitute a contractual element.

12 | 2

Business

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Hungary Helping Bring Sustainability Into Fashion Ágnes Szépligeti is leader of the Art & Couture team. She manages the GSFW’s catwalk designers from around the world, model castings and oversees work backstage. Although she’s lived abroad for many years, the past two in London, she’s never lost contact with Hungary and fashion design in the country.

Now in its fourth year, Global Sustainable Fashion Week is a unique Budapest-based event that combines an international conference, workshops, displays and fashion shows dedicated to sustainable and ethical fashion and art.

Our Future

For Szépligeti, “Sustainability is our only future, in fashion and every other aspect of our economy. We need to change the way we live. I believe if everyone makes the effort to change just one small thing in their lives, we’re already on the right track,” she explains to the BBJ. How about the future for sustainable fashion in Hungary? “I’m inspired by climate activist Greta Thunberg, recently

“Sustainability is our only future, in fashion and every other aspect of our economy. We need to change the way we live.”

DAVID HOLZER

There are good reasons why fashion needs to become more sustainable. A recent article in Wired magazine profiling Stella McCartney pointed out that “global textiles production emits

1.2 tonnes billion

of greenhouse gases annually, more than international flights and maritime shipping combined.” Scary stuff.

But the profile of sustainable fashion is rising, championed by people like McCartney who told “Wired”, “The starting point is not design. The starting point is sustainability.”

It’s not all about high fashion. The eighth iteration of high street chain H&M’s Conscious Exclusive collection of premium pieces was launched in fall/winter 2018.

ASOS now offers recycled jeans. Cultish brand Dr. Martens makes pretty cool vegan boots, shoes and bags. Sustainable clothing niche brands spring up all the time. The timing is right, then, for GSFW.

Matilda Jánosi, photo by KrisJ photography.

Revolution movement whose manifesto includes the statement, “We love fashion.

But we don’t want our clothes to exploit people or destroy our planet.”

Through her work as a leader of both for profit and non-profit organizations, Mányi-Walek, “realized the importance of a proper social, ethical and environmentally conscious attitude in fashion. Now I’m one of the people calling for positive change.”

World Class

How has GSFW evolved over the years?

“What has changed is the number of world-class speakers and well-known, talented designers taking part. This year, for instance, we’re delighted to welcome designer, researcher, writer and educator Sass Brown and British fashion designer, social entrepreneur, fashion campaigner and founder of Fashion Revolution, Carry Somers,” Mányi-Walek tells the Budapest Dr. Gabriella Mányi-Walek Business Journal.

Is sustainable fashion growing in Hungary? “Hungary is not a leader of the fashion world, but we have really talented Founder and organizer Dr. Gabriella designers who are part of the industry Mányi-Walek has had a long career in trend towards sustainability. They’re the textile, garment and fashion industry. using their own skill and creativity Since 2004, she’s been the President of to make sustainable collections. The the Hungarian National Fashion League challenge in Hungary is to find good that she founded. She’s also country representative for the international Fashion quality eco-friendly fabrics.”

And what about the future for sustainable fashion? “It’s the only option,” she says.

Mányi-Walek is keen to stress the importance of her GSFW team, who she calls her “family”. Matilda Jánosi, founder of the TildArt brand, is a Hungarian eco-fashion designer based in London. She started her brand back

in

2009

and was one of the first Hungarian designers to work with recycled fabrics that included bicycle inner tubes and strips of movie film.

Today, she creates fashion pieces using a combination of recycled fabrics and organic materials. Her motto is “I love it when fabric has a history.” All of her pieces are made to order from her TildArt website and produced in London.

As leader of the Eco Fashion Team, Jánosi’s role is to encourage more high profile sustainable fashion designers, speaker and writers to GSFW. This year she’s secured Jeff Garner of eco-label Prophetik from LA, Katherine Soucie of award-winning Vancouver, Canadabased textile and design studio Sans Souci, and Kenny Jackson-Forrest, British ecofashion writer and founder of the Style and Trashion blog (styleandtrashion.com).

nominated for the Nobel Peace Prize. She said ‘We need to be focused on what needs to be done, rather than what is politically possible. And if the solutions within the system are so impossible to find, then maybe we should change the system itself.’

To me, that’s the perfect description of the challenges people face in Hungary.”

Enikő Manzák founded PIZSI, the first Hungarian sleepwear brand, 18 months ago when she realized she couldn’t buy locally made designer sleepwear. She joined Fashion Revolution Hungary a year ago and is dedicated to spreading the word.

Sustainable fashion is important to Manzák because, as someone in charge of her own brand, she sees exactly what’s behind a label.

“I want to show people that local, ethical fashion is worth buying and that there must always be a story behind a brand. For me, it’s not just about the environment but consciousness as well. If I buy something, it must have a value because of the people who made it or how it influences my life.”

And how is her sleepwear ethical? “I use Oeko-Tex certified products. This guarantees a product is safe and has been sustainably produced. But I’m trying to be even more ethical. Edit, who makes my sleepwear, lives not far from Budapest and I pay her fairly. I’m very proud of this,” Manzák tells the BBJ.

Global Sustainable Fashion Week runs from April 9-11 at the Italian Cultural Institute, Budapest Chamber of Commerce and Tildy Palace, the Argentinian ambassador’s residence at Andrássy út 96. Find out more at www.gsfashionweek.com Matilda Jánosi’s work is on show at www.tildart.com Check out Enikő Manzák’s sleepwear at www.pizsistore.com

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

PRESENTED CONTENT

2

Business | 13

Linde Looking to Continue Double Digit Growth in Hungary Germany-founded Linde has been active in Hungary’s industrial gas market since 1992, when it acquired a stateowned operation. The company this month cleared the final regulatory hurdle to complete its mega merger with U.S. peer Praxair. The Budapest Business Journal talks with Andreas X. Müller, managing director of the Hungarian business and also cluster head for South and Eastern Europe about what that means for the business here.

ROBIN MARSHALL

BBJ: In March, the merger was finally approved, creating the world’s largest industrial gas business. What is the impact of that on the Hungarian operation?

Andreas X. Müller: Indeed, we are now the number one globally in industrial and medical gases. We have a global market cap of around USD 90 billion. This also makes us the second largest chemical company globally. With industrial gases we are involved in many industries: chemicals, steel, welding and cutting in manufacturing industries, freezing applications for the food industry, carbonation for beverages as well as in the medical field, just to list a few. We have big industrial customers who outsource their gas supply to us, and we operate plants within their factories, supplying, for example, hydrogen or carbon monoxide. In the short-term, the merger will not have an immediate impact locally; there was no Praxair business in Hungary.

In the longer-term, we expect the logic of the merger will give us, and especially our customers, many advantages. We will further enhance our product offering and our engineering expertise. Globally there will also be lots of cost benefits from the merger. And we are now such a big company that we will have even more funds to invest.

BBJ: One of the stated aims of the merger is to create an “innovation powerhouse”, bringing together both

Andreas X. Müller companies’ R&D activities. Is there a plan for any such R&D activity to come to Hungary, given the incentives available here?

AXM: Not immediately, though we are, of course, aware of the subsidies and think they are one of the really positive benefits of the environment here. In R&D we do what we call Application Technology; developing innovative applications of gas usage to improve the production processes of our customers. Our mission is “making our world more productive”. We have a larger team of application experts here who already work regularly with other centers to develop new applications we implement globally.

Praxair has been a big believer in local empowerment and we would like to adopt that. We also look at how we can run plants more efficiently and how to optimize our logistics, especially leveraging digitalization.

BBJ: How was 2018 for Linde in Hungary?

AXM: It was a pretty good year. We grew sales by 15%, to roughly HUF 60 bln, and net profit after tax by almost 20%. That was organic; we grew a lot with our existing customers, but also took on new customers who are also growing. We are the number one supplier here.

BBJ: What are the business goals for Hungary for 2019?

AXM: This year we will look to continue to grow. Industrial gases are mainly a local business and we are benefitting from the positive economic development in Hungary. Also, we have two European hubs here. We have natural CO2 wells in Répcelak (185 km west of Budapest), from where we are supplying the whole of Europe. We also have a hub for N2O – laughing gas – there, and we began building the next plant last year. That will come on stream this year.

There are two programs we are driving in particular this year. We have started a digital transformation process where we took 20 top talents, brought them together and asked them how they would transform

the market. For example, our Webshop.

That might not seem so revolutionary, but customer-facing B2B channels are not so prevalent in Hungary. This year we will be launching an upgrade, which will help our clients not just with buying products but also with stock management. I am happy we are already quite profitable, but there is still potential to improve

“The one thing that concerns me mid-term is the scarcity of labor. We have really wellskilled engineers, and right now we have relatively few problems filling positions.

We have a very loyal staff, but my concerns are about what happens when this generation begins to retire. It will require concerted action to make sure there are the resources to replace them. “

That is something we want to continue, to apply more modern management.

This year I want to continue to grow profits in the double digits, and the first two months of the year give me confidence we can achieve that. We can grow our market share by delivering better quality and through our application technology, which gives us a market advantage. We also want to grow in new areas. Last year, we saw growth in refrigerant agents used for air conditioning units, e.g. for cars.

This is a market which grew a lot last year due to a regulatory change, from an emissions perspective, that drove a change in product generations.

We also saw growth in market share on the medical side, and we have more aspirations here, particularly with the government’s approach to developing super hospitals. We offer a total gas management service where we take responsibility for installing and operating the systems. We promise the hospitals we can optimize their gas use, and costs, by properly managing their gas needs. We are also seeing healthcare growth through the spread of new therapies such as noninvasive pain relief, for example for dentistry, as well as sleep and long term oxygen therapy in the homecare sector.

through digitization of processes, both for our customers and for ourselves. We have some plants that run completely unmanned, for example.

The other program concerns performance culture I started here two years ago, and the operation had always been very traditionally managed. Now we are looking at how we can improve compensation, we have introduced incentive systems, there is increased internal communication, and our employee engagement surveys already show very positive results. Our staff fluctuation is currently only 3%, which is really quite low, looking at the market.

BBJ: Are you satisfied with the regulatory framework here?

AXM: Basically, yes. We see a lot of positives. My main pain point currently is electricity prices, because the cost is so high here and rising. We like the social contribution tax relief on salary levels (which we have passed on to our employees), for example. The one thing that concerns me mid-term is the scarcity of labor. We have really wellskilled engineers, and right now we have relatively few problems filling positions.

We have a very loyal staff, but my concerns are about what happens when this generation begins to retire. It will require concerted action to make sure there are the resources to replace them.

3

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Budapest Business Journal | March 29 – April 11, 2019

Special Report

Waberer’s Seeks Route Back to the Fast Lane With its bright yellow tractors and deep blue trailers, Wabererʼs trucks are a common sight on highways across Hungary and Central Europe. Little wonder: boasting some 4,500 vehicles, Waberer’s is one of the largest haulers on the continent. But despite its slogan – “Optimum Solution” – the company has been a far from optimum investment since its IPO in 2017.

KESTER EDDY

Strong Domestic Road Transportation Market Growth Hungarian Domestic Road Freight Market Size (in €bn)

1.8

1.8

1.9

2.1

2.1

2.2

2.2

2.3

2.4

2.5

easier to do business with and establish ourselves as a reliable partner delivering high quality service.”

Fine words, and the hauler could certainly do with some action to match.

Since listing on the Budapest Stock Exchange in June 2017, the share price has slumped

from

HUF 5,125

to around HUF 1,800 at the time of going to press; an investor-unfriendly decrease of some 65%.

Pincer Effect

2011A

2012A

2013A

2014A

2015A

2016E

2017E

2018E

2019E



Customer-led growth with focus on regional logistics solutions



Customer preference for one-stop shop logistics solution providers



Regional market with large number of small and midsized operators



Strong growth of private consumption in Eastern Europe of c.3.1% p.a. from 2015A to 2020E lays solid foundation for increasing road freight volumes

In a company presentation last December, Waberer’s, Hungary’s flagship hauler and logistics provider, set out a long, persuasive list of reasons to justify investor confidence. From a company with just 175 trucks in 2002, via acquisitions and organic growth, the There was just one problem: on March fleet had expanded to nearly 4,500 at 20, the company posted a net income loss of the end of 2017, an annual growth rate just shy of 24%.

These trucks, with an average age of for the last quarter of 2018. just 2.1 years, and supported by cuttingedge IT infrastructure and an “optimized This brought Waberer’s full year loss to driver management” system, could EUR 13.9 mln, down from a EUR 21.4 mln boast an “industry leading operating efficiency”, with a “loaded ratio” of 91.4%, profit for 2017. almost four percentage points above the Challenging Year average in the European Union during “Without doubt, 2018 was a challenging the previous four years. year for Waberer’s. On one side, the True, the presentation noted rising labor company faced pressures on key cost and fuel costs, and a potential slowdown elements that deepened throughout the in economic growth, but equally it gave notice of measures implemented to counter year, and on the other, overcapacity in the second half of the year. The company these trends. was thus faced with lower margins and a Moreover, given the company’s annual rapidly changing competitive landscape growth of 12.3% over the previous five in the European full truck load market,” years (against a European international Robert Ziegler, chief executive of road freight average of just 3.5%), the future for Waberer’s looked as bright as the Waberer’s said in a company press release accompanying the news. smiling-sun logo on the sides of its trucks.

The stock, which had finished 2018 To bolster this optimism, the at HUF 2,300, closed at HUF 1,785 on presentation named five independent the day. equity analysts who had earlier pinned Ziegler, who only took over in “buy” recommendations to the stock, February, following the resignation of putting an average evaluation of the share his predecessor Ferenc Lajkó, stated price at HUF 5,240.

EUR 11.4 mln

2020E

Source: Waberer’s International

that despite short-term measures already initiated to address “some” of the challenges facing the company, he also realized that Waberer’s “is in need of more profound changes that I will be happy to drive”.

Among his first initiatives, Ziegler cancelled orders for more than 300 new trucks. Management had also scrutinized the business portfolio to cut loss-making operations and implemented “a significant reduction” in headcount.

The latter, while attracting negative onetime costs, would contribute positively to results throughout 2019. And yet more change is in the pipeline.

“These short-term measures are by themselves insufficient to guarantee a sustainable and profitable growth path for Waberer’s,” Ziegler said. “We have identified a number of structural concerns that prevent us from being a truly competitive player in these changing markets.”

The company has to become “more agile”, to both client needs and changes in haulage market. And, in a thinly veiled hint that customer service standards had not always lived up to company hype, Ziegler declared: “We want to become

Waberer’s management were seemingly caught napping in 2018 when both costs and competition rose, catching the company in a pincer effect.

“There were price rises, fuel prices rose, driver costs rose and also in Hungary, white-collar workers costs rose roughly 10%. [Road] tolls also rose.

All this meant a

20-25% rise

in the cost base,” József Miró, an equity analyst at Erste Investment, told the Budapest Business Journal.

In response, Waberer’s raised prices, but was constrained by increasing competition from over-capacity in the transport sector in Western Europe, Miro says.

“Waberer’s increased prices by 5%, [but] this caused tension, and [truck] utilization rates declined by between 5-10% each quarter. This decline eliminated the [positive impact] of the price increases,” he said.

Miro, however, is impressed by management moves to cut the fat, noting in particular the drive to shed overcapacity and reduce fixed truck hire fees by putting out less profitable work to sub-contractors.

“The company is in a turn-around phase.

They’ve taken the necessary steps to make themselves more flexible, […] and I think they will return to profitability in the first quarter,” he said.

He’s also bullish on the share price. “The stock is cheap now, well below book value of HUF 2,600 per share,” he said, adding that overall, “the future is bright”.

Long suffering shareholders will be hoping Miro has it right. However, his optimism, like the 2018 investor presentation, has been misplaced previously. In that presentation, Miro was one of the analysts recommending a “buy” with a target share price of HUF 5,078 in his October analysis.

Editor’s note: The BBJ approached Waberer’s for comment on this story, sending more than 20 questions in writing. At press time, despite further requests for answers, the company had failed to respond.

3

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Budapest Business Journal | March 29 – April 11, 2019

Special Report | 15

Airport Continues to see Double Digit Cargo Growth After cargo operations at Budapest’s Ferenc Liszt International Airport returned another record in 2018, hopes are high that this year will see a further rise in figures, along with rising walls of the new facilities at the hub.

CHRISTIAN KESZTHELYI

Operator Budapest Airport says it is especially optimistic about future progress, as European competitors of the capital’s airport are becoming overloaded, while there is ample room for expansion here, Mihály Hardy, communication director at Budapest Airport, tells the Budapest Business Journal.

The volume of air cargo grew by 14.9% in 2018, compared to the previous year, exceeding the surge of passenger traffic rate at the airport. Over the past three years, cargo growth in Budapest has raced ahead by double digits, totaling

146,113 tonnes

of arriving and departing load in volume.

“We are focusing all our efforts to make good use of the ideal conditions in Budapest and turn Liszt Ferenc International Airport into a major cargo logistics hub of the Central and Eastern

“During the summer our network of long-haul passenger flights will connect cities like Toronto, New York, Chicago, Philadelphia, Dubai, Doha, Beijing and Shanghai,” Hardy says. More than half of these will fly on a daily basis according to the timetable.

Cargo Apron

Work is progressing on BUD Cargo City, a 20,000 sqm warehouse complex, and an additional 10,000 sqm so-called forwarder building (both warehouses and offices) near. As of 2020, belly-cargo containers will directly go to BUD Cargo City, near the passenger operations of Terminal 2.

The new complex will also have a

dedicated

32,000 sqm

Quick Development European region,” said René Droese, director of property and cargo at Budapest “These are the major, dedicated cargo airlines, while all four integrators [the Airport, when last year’s figures were express parcel service providers] have announced in January. aircraft based in Budapest: DHL, FedEx, The momentum for turning Budapest UPS and TNT all have major daily into one of the most important cargo hubs operations here. They also benefit from in the region — if not making it a market the quick development of e-commerce,” leader — could be never better than now.

Hardy adds.

“The big European cargo airports are A good geographical position and a overloaded, it is difficult to obtain new progressively developing airport alone are slots for cargo aircraft and it is quite not enough for success, of course. difficult to expand there; lately there is a “It is not enough to have facilities for notable slowdown due to different factors importing products from the Far East via in the cargo market,” Hardy tells the BBJ. aviation cargo links; you also need to have However, that tendency is not true a strong, export-oriented manufacturing of the Hungarian capital’s airport. “In base that needs cargo space for the Budapest, on the contrary, we have almost outbound flights,” Hardy points out. unlimited space for development, great Another factor that boosts interest in interest on part of Hungarian-based the country is that 20 European countries, manufacturers to export (electronics, car both EU and non-EU states, are in parts and pharmaceutical items) and also interest from abroad, mainly from China to trucking distance of Budapest.

All the above-mentioned factors give establish a new distribution center within the EU,” the communications director adds. Budapest Airport a very strong position in belly cargo operations; some passenger Whether it is the continuous flights going through the Hungarian developments at the airport or the capital have approximately geographically well-positioned nature of Hungary, the hub is, indeed, receiving attention. Cargo airlines that have tonnes partnered up with the airport include of extra cargo capacity in the cargo hold Cargolux, Turkish Cargo, Qatar Airways below the passenger deck.

Cargo, AirBridgeCargo and Silkway.

10-12

cargo apron, where it can service two Boeing 747-8F Jumbo aircraft simultaneously.

“This is the most important development and the good news is that if the market demands, we can continue doubling this estimated 200,000 tonnes/year capacity within one year,” Hardy says.

While it is difficult to tell what the upcoming decade holds in terms of cargo operations, the overcrowding of other European hubs certainly favors Hungary.

“Major European cargo hubs like Frankfurt and Amsterdam have already reached their maximum capacity or are quite near to them,” Hardy explains. “We believe that Budapest Airport has everything cargo operators may need, we are working very hard to have new flights and we try to expand our relationship with our Chinese partners,” he adds.

The airport operator says it also enjoys the “very active support of the Ministry of Foreign Affairs and Trade, including the full personal backing by Minister Péter Szijjártó,” Hardy stresses.

“Our aim is to turn Budapest into a real cargo hub in the region; we think everything is now given to achieve this goal. Hungary has an excellent road and rail network: we have also expanded the rail links at the airport; should any cargo partner need rail and road container terminals at the airport, the infrastructure is already there.”

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Special Report

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Budapest Business Journal | March 29 – April 11, 2019

Low Availability Limits Market Growth

for

2019

The low availability of contiguous industrial space in the Budapest area and rising demand has resulted in record low vacancy rates of 2.4% in a market with a total stock of 2.18 million sqm according to Cushman & Wakefield.

looks similarly conservative [to 2018] in terms of volume, albeit with signs of increased willingness to undertake speculative projects, which would mark a turning point in the development cycle,” adds Baka.

With these low vacancy rates, very limited availability and the high proportion of preleased pipeline, some leading developers are moving towards the speculative development option in established logistics parks, often as an addition to a the built-to-suit (BTS) project. At the same time BTS activity

CTPark Bucharest.

GARY J. MORRELL

Despite rising demand, further development of the Budapest industrial market is continuing to be impeded by a limited supply of space; take-up for 2018 was 378,00 sqm according to the real estate services company. This was dominated by renewals, primarily due to the low availability of contiguous modern logistics space. Six new schemes representing 120,000 sqm were handed over in 2018.

CBRE estimates that modern industrial stock across Hungary totaled a little more than nine million sqm as of the end of 2018, of which 3.16 million was developer-led and generally operates on a lease basis, while the rest was owneroccupied stock. The majority of the

Cushman & Wakefield says it has traced an industrial pipeline of 130,000 sqm, most of which is located in the greater Budapest area. “Looking ahead, the pipeline

developer-led stock (or 2.18 million sqm) is located in the Budapest area.

“Last year brought the highest completion volume in a decade with 127,000 sqm of new space handed over,

up

8%

year-on-year. However, in terms of absolute volume, as well as the nature of the delivered supply, this must still be considered rather conservative in the current market environment,” comments Gergely Baka, head of industrial & logistics at CBRE. In the largest recent transaction, the international industrial park operator and developer, Goodman delivered a logistics center for Auchan Retail Hungary at the Üllő Airport Logistics Center. The logistics park is owned

and operated by Goodman itself, which will manage the new facility.

Largest Yet

The 87,000 sqm center is the largest of its kind yet built in Hungary according to Auchan and will handle Auchan Retail Hungary’s food and non-food logistics while also supporting the company’s on-line commerce in Hungary.

“Goodman’s own develop and manage business model has proven to be successful in delivering a high-quality logistics facility,” said István Kerekes, country manager of Goodman Hungary. The Goodman Group business model provides what it describes as integrated “own & develop & manage” customer service.

Goodman’s current portfolio in Hungary comprises warehouse and office space in two locations: Gyál and Üllő.

“Last year brought the highest completion volume in a decade with 127,000 sqm of new space handed over, up 8% year-onyear. However, in terms of absolute volume, as well as the nature of the delivered supply, this must still be considered rather conservative in the current market environment.” is expected to accelerate from tenants looking to secure space for both market entry and expansion.

Prologis has commenced construction of a 10,600 sqm speculative facility at Prologis Harbor Park. The company has a Hungarian portfolio of 580,000 sqm with close to 100% occupancy. László Kemenes sees possible development in the Budapest market in the growth of urban or city

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Budapest Business Journal | March 29 – April 11, 2019

Special Report | 17

INSIDE VIEW

Taxation that follows postings Senior advisor, Partner LeitnerLeitner

Goodman Üllő Airport Logistics Centre. logistics, following market trends in some of the larger European cities.

Speculative Build

The leading CEE logistics park operator, CTP, plans to go ahead with a 32,000 sqm speculative development at CTPark Budapest West, a significant proportion of which is already let, according to the company. With regard to supply and development, CTP has hit the five million sqm mark in Central Europe.

“We have been working on buying strategically located land in the five capitals of the countries in which we operate. I am excited about the latest acquisitions in Budapest and we are now able to offer warehouse properties all around the city,” says Remon Vos, CEO of CTP. The lack of available warehouse space and the rising cost of construction has put upward pressure on rents, which has resulted in

about

13%

year-on-year growth according to Cushman & Wakefield. The company estimates prime logistics rents of EUR 4.25 per sqm per month as of the turn of the year. CBRE put headline rents for speculative new developments in greater Budapest at EUR 4.4-4.8 per sqm per month and for BTS schemes at EUR 4.55. Rents at the low supply of city logistics center are EUR 4.75-5.5.

In contrast to its Central European neighbors, a developer-led industrial market has not emerged beyond the capital, with only a handful of such projects

built outside the greater Budapest area.

However, demand for industrial space from automotive and related companies is increasing in some areas. Kecskemét, for example, 92 km southeast of Budapest, is looking to become a new hotspot as developers are planning to exploit their landbanks on the back of the expected supplier influx around the second Mercedes plant there.

“Moving forward, the market is expected to remain BTS dominated. In response to the increased cost of new development, developers are showing an increased interest in land banking, even in subprime Budapest locations, and are in a ‘wait and see’ position, assessing their speculative build options.”

“Moving forward, the market is expected to remain BTS dominated. In response to the increased cost of new development, developers are showing an increased interest in land banking, even in subprime Budapest locations, and are in a ‘wait and see’ position, assessing their speculative build options,” concludes Cushman & Wakefield.

Employment posting questions emerge in both short- and long-term relations.

In practice, long term-postings are usually handled by the HR department; however, short-term business trips and trainings that may get a lower emphasize also require due care from a taxation and administration perspective.

In addition, the logistics sector also has some special treatments.

Long-term postings: the most complex implications.

Salaries, wages and similar remuneration may be taxed in the receiving or the posting country.

Taxation depends firstly on whether the private person keeps his or her tax residency during the period away from the home country. A change of tax residency may incur if the whole family travels and moves out of Hungary for a longer period together; thus the personal relations of the individuals are significantly and permanently changed.

If the work is physically carried out in the receiving country and the tax residency of the persons has also moved, then taxation rights go exclusively to the receiving country.

Otherwise, if tax residency remains at home, the taxation of salaries will depend on the physical place of work, the duration of stay and the disburser of the money. In such cases, income taxation may goes to the receiving or the posting country or to both.

Social security legislation is based on a different logic, meaning that it is not always in harmony with the taxation. To find our which country should provide coverage, and thus be entitled to the contributions, the length of the posting, and single or parallel working relations in the affected countries should all be investigated.

In terms of labor relations, the receiving and posting countries’ legislation should be jointly applied in terms of minimum wages, maximum working times, minimum rest periods, health and safety, protection of female and youngsters, equal treatment and lack of discrimination.

Short-term difficulties in taxation CTPark Budapest East.

Cafeteria elements were deregulated in 2019, although this does not affected the treatment of business

trips and short-term delegations from a tax point of view. For such short trips, the employer may provide its employees with a daily allowance fee, which is at least partially exempt from taxation. The thresholds for this tax exemption depend on the destination: domestic allowances may be granted tax free up to HUF 500 per day normally, and HUF 3,000 per day in the logistic sector; while allowances concerning delegations abroad are always taxable partially, as 30% only, up to EUR 15 per day, can be granted without taxation. Logistic sector is special with EUR 60 tax free daily allowance. Travel and accommodation expenses may be provided without taxation; always on the condition that the proper invoice is issued for the name of the company.

If no daily allowance is provided, the employee may be entitled to hand in invoices, again for the name of the company only, for the food he/she buys during the trip. Such reimbursements are taxable, but taxes to be paid by the employer at 15% personal income tax and 19.5% social tax over an income multiplied by 1.18%; so the total effective tax rate is 40.7%. Similar tax implications need to be considered for representation costs, if the employee during its business trip invites others to a business meal.

Special attention should be made, however, on the legal aspects as well; the wording of the employment contract can result in different interpretations about postings. If no place of work is regulated in the contract, or the workplace is varying, the definition of postings could be difficult to fulfil in practice. This leads to additional taxation for business trips and car utilization.

Short-term postings, business trips and training, therefore, fall under even more complicated taxation implications. This, based on our practical experiences, is usually overlooked or treated improperly within organizations. It is not bad thing to accept the helping hand of external advisors and payroll specialists in employment posting matters both in short- and long-term cases, whether domestic or cross-border situations.

LeitnerLeitner is one of the most influential tax consulting, accounting and auditing companies in Central Europe. We have comprehensive knowledge on the legal and tax environment of countries in the region. With the help of our other experts we can provide high quality advise on taxation aspects of posting for our Clients.

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Judit Jancsa-Pék

18 | 3

Special Report

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Budapest Business Journal | March 29 – April 11, 2019

Industrial Demand in Central Europe Continues to Rise The Central European industrial and logistics market is continuing to record high demand, reflecting the indicators in the wider European industrial markets; take-up in Poland, for example, was over 4 million in 2018.

Michelangelo: Male Nude © Teylers Museum, Haarlem

GARY J. MORRELL

Triumph of The Body 06 04 – 30 06 2019

Total Central European industrial stock has surpassed the 27 million sqm threshold and the CEE region (Czech Republic, Hungary, Poland, Romania, and Slovakia) there is low vacancy at 5% or lower (in all markets apart from Slovakia).

Hungary for example has circa 2.4% vacancy and Romania 3%, according to Cushman & Wakefield.

Tenants now have to plan in the long-term in order to source space. At the same time, developers are now committed to delivering higher specified and sustainability accredited space in response to tenant demand.

Poland and Czech Republic continue to be the dominant markets: supply for the two for 2018 was around 2.2 million sqm and 735,000 sqm respectively, compared to

127,000 sqm for Hungary,

according to Cushman & Wakefield.

The Budapest industrial market is going through a resurgence but suffers from limited development. Romania’s industrial market is attracting

significant development, on the other hand, with an estimated 435,000 sqm of new supply for 2018.

Poland passed a new milestone last year, as industrial stock stood at close to 16 million sqm across Warsaw and several provincial logistics hotspots, compared to 2.2 million sqm in Hungary.

“Poland is emerging as the core logistics hub in the CEE region as it benefits from its strategic, central location in Europe, enabling efficient, cross-border distribution operations,” said Cushman & Wakefield Poland.

New Supply

New supply has taken industrial stock across Czech Republic to the 7.7 million sqm mark. In Prague, Prologis has delivered an additional 38,000 sqm of space at Prologis Park Prague-Airport, 27,000 sqm of which is built-to-suit and 11,000 sqm is

and Sixteenth-Century italian draughtSmanShip

mfab.hu Lead Sponsor:

Corporate Partners:

Partner:

Prologis Park Pilsen in Czech Republic.

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Budapest Business Journal | March 29 – April 11, 2019

CTPark Nitra. speculative space. Prologis has purchased a further six development plots in Czech Republic.

Its total Central European Prologis portfolio (taking in Czech Republic, Hungary, Poland, Slovakia) consists of four million sqm of logistics and industrial space with an overall occupancy rate of circa 95% as of the turn of the year.

Its most notable activity was in Poland, where the portfolio consisted of 1.8 million sqm and leasing activity

reached

723,000 sqm

in 2018. Prologis started the development of nine speculative buildings and four BTS facilities totaling 250,000 sqm of space in 2018.

The company is developing a 10,600 sqm speculative facility at Prologis Harbor Park in greater Budapest, and has also undertaken development of a 40,000 sqm speculative facility at Prologis Park Brno in Czech Republic in what the company describes as a “disciplined increase in speculative building” across its European portfolio.

“Our strongest markets include Germany, the Netherlands, Czech, Italy, Spain. Hungary and Sweden in order of net operating income,” commented Ben Bannatyne, president of Prologis Europe.

In the current market environment with high demand and low availability, companies requiring space need to plan far ahead. Further, in the current landlord favorable market, the majority of development is undertaken on a BTS basis as developers are quickly able to conclude BTS deals for available development space.

“Poland is emerging as the core logistics hub in the CEE region as it benefits from its strategic, central location in Europe, enabling efficient, cross-border distribution operations.”

“The difference between BTS and speculative is a bit misleading nowadays, as most of the delivery is taken by tenants at the planning stage or during the construction phase. So there is not as much typical speculative construction as there was in the past,” commented Ferdinand Hlobil, head of CE industrial at Cushman & Wakefield.

Budapest-centric

In contrast to Czech Republic, Poland, Romania and Slovakia, a functioning commercial industrial market has not developed outside the capital in Hungary and companies establishing light industrial facilities have tended to develop their own facilities.

Romania with its network of large regional cities, is now undergoing

sustained industrial development.

CTP is extending the 400,000 sqm CTPark Bucharest West and plans to make it one of the largest business parks in Central Europe.

The company currently has as much as one million sqm of industrial and logistics space in Romania in

13 parks

with 300,000 sqm completed in 2018.

“We have doubled the size of our CE portfolio since 2014, with five million under roof and a landbank to develop anther three million,” commented Remon Vos, CEO of CTP. The established CEE industrial park operators and developers have been reluctant to enter the SEE markets and therefore there is a very limited provision of modern, speculative industrial and logistics space.

Most tenants do not want to sign long-term leases and developers have not, therefore, developed speculative projects in the view of Andrew Peirson, managing director of SEE at CBRE. However, CTP is extending its logistics park network to Serbia with a EUR 75 million investment. Its first development under construction is the 14,000 sqm CTPark Belgrade West on a 2.5 hectare site and the 23,000 sqm CTPark Novi Sad on a six hectare site close to the Hungarian border.

CTPark Belgrade North has the potential for 65,000 sqm of space on a 15 hectare site with the 25,000 sqm first phase currently under construction. The company aims to deliver 70,000 sqm of space by the end of the year and says it is looking to source further developments sites.

Special Report | 19

20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Labor Shortage Hindering Logistics Sector The logistics sector in Hungary suffers from a serious labor shortage, which is not a novelty but rather a tendency of the past few years. With talent with the appropriate skills missing from the market, wages are hitting stellar heights. Budapest Business Journal discusses the market sentiment with industry insiders.

CHRISTIAN KESZTHELYI

The labor shortage is not unique to the logistics sector, nor to Hungary. The lack of talent puts immense pressure on sectors all around the country, as well as in the European Union.

Industry insiders, more often than not, mention that once the hardship of recruiting good talent is tackled, a company must work hard on keeping their employees, who can be poached by competitors at any time.

The Hungarian logistics sector is one of those trying to march forward in these scarce times.

“The labor shortage is a two-tothree-years-old topic and the tendency remains the same. The logistics sector struggles with both blue collar and white collar shortage,” Tamás Tanárki, CEO of Yusen Logistics (Hungary) Kft. tells the BBJ. “I can confirm that there is a severe shortage of labor in the freight forwarding industry in Hungary,” Endre Gál , deputy CEO of Airmax Cargo Budapest Zrt., confirms.

“We find it very hard to recruit qualified personnel for our customer service positions. Airmax Cargo has multiple job openings that have not been filled for more than a year. This is especially true in case of personnel needed to provide specialized services like

24/7

time-critical

shipping, which comes with an outof-hours work schedule, or sea freight; since we are a landlocked country this is wrongly considered by the general public as exotic, decreasing the potential labor pool,” Gál adds.

This lack of talent puts immense pressure on market players, in terms of salaries and a battle to keep their staff.

Skyrocketing Wages

“Wages have skyrocketed in the last two years, squeezing the profitability of forwarders. Employees are regularly hunted down and many times there is an actual bidding war between competing freight forwarders to hire experienced customer service personnel,” Gál explains.

impact on service quality, and hampers freight forwarders’ growth, Gál explains.

Last but not least, it can cause mental health and social problems for employees.

Due to the market being highly international, employees who already speak foreign languages well are often ready to move beyond Hungary’s borders in search of better conditions.

“Freight forwarding operators are highly mobile and susceptible to moving abroad as they are already working in a multinational environment day-to-day and are proficient in at least the English language,” Gál explains.

Tanárki of Yusen confirms this: “On the top of European general tendency, Hungary and the CEE countries have an additional pressure due to a migration tendency towards the West.”

“Market players try to identify talents already in the schools and/or provide training themselves to Generation Gap upgrade the knowledge of The truck driver segment is also seeing hard new employees. Logistics times. A generation gap now appears to scar the profession, which is chiefly caused education in our schools by a sharp decline in the general attraction and universities seems to be of the profession, which shows itself in a behind European standards: greatly reduced influx of new talent.

Factors contributing to the perceived closer cooperation between lack of attraction of the truck driver’s career are plenty. “Decreased social industry and academia is status of the jobs due to vanishing more than welcome.” borders, vastly increased traffic in Europe, At the same time, the labor shortage in the sector cuts into operations deeply.

It can result in lost business due to inadequate response times, has a negative

changing preferences concerning working hours and changing labor market trends resulting in the appearance of other, more attractive jobs” are just a few of the challenges that the sector faces, according to Gál of Airmax Cargo.

“As the market for truck drivers is changing into an overbought market, drivers are cherry-picking between assignments and will only accept freight that suits their preferences; timely payment, good customer relations, reliable, steady flow of assignments for a longer period of time, etc.,” the Airmax Cargo deputy CEO says.

“We find it very hard to recruit qualified personnel. […] This is especially true in case of personnel needed to provide specialized services like 24/7 time-critical shipping, which comes with an out-of-hours work schedule, or sea freight; since we are a landlocked country this is wrongly considered by the general public as exotic, decreasing the potential labor pool.”

Businesses operating in the logistics sector therefore need to strike early reach out to talent before they would even enter the labor market.

“Market players try to identify talents already in the schools and/or provide training themselves to upgrade the knowledge of new employees. Logistics education in our schools and universities seems to be behind European standards: closer cooperation between industry and academia is more than welcome,” Yusen CEO Tanárki adds.

3

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Foxpost Says Will Turn Profitable Within Months as E-commerce Grows Hungary’s largest automated parcel terminal operator Foxpost is set to turn profitable in a few months’ time, the company’s CEO and founder Ádám Bengyel said in an interview with the Budapest Business Journal.

Achieving a bottom line in the black would come parallel to the expansion of the online retail sector in Hungary.

VERONIKA GULYÁS

“E-commerce currently takes up about 4.5% of total retail in Hungary. This compares to 10-15% in Czech Republic, which indicates the massive growth potential here,” Bengyel says.

The company has been profitable at an operating level for the past two years, he says, but it has been reinvesting into expansion and development. It also acquired its peer Webox Hungary in 2016. This, in addition to organic growth, has given Foxpost a network of more than 100 terminals across the country, with 11,500 lockers altogether.

Foxpost is the leader on the parcel terminal market, with the logistics service provider of the incumbent Magyar Posta operating 49 terminals, and GLS, part of the United Kingdom’s Royal Mail, only 15. On the clients-to-clients market, such

Special Report | 21 Foxpost now operates terminals in

103 locations

across the country, and offers one-day delivery between them. Prices range from HUF 990 to HUF 2,190 apiece depending on the size of the parcel, but registering in the Foxpost system cuts the prices to up to HUF 690.

IT Development

as buying goods on a classified ads site, Foxpost has a market share of

around

15%

or 600,000 parcels annually.

On the businesses-to-clients market, or purchase and delivery from a webshop, Foxpost has a share of only about 1.7% in terms of the number of parcels. There is more potential in this area, Bengyel says: the goal is to boost the share to a double-digit ratio by 2022. This could be fueled by several factors, including the growing popularity of major international e-retailers in Hungary, and a hopeful change in locals’ approach to delivery.

Game Changer

“The game changer would be when Hungarians start to consider the

delivery of their items to a parcel terminal – where they can decide on the optimal time of the pickup – superior to home delivery, which usually means staying at home half the day, to say the least,” Bengyel says.

Another potential area for growth is partnership with businesses for returning goods. “We offer the opportunity of delivering items to the seller that were not delivered

by Foxpost in the first place,” Bengyel explains.

The lion’s share of investments at the firm are still channeled into the growing network. Within the country, Foxpost is focusing on locations “where GDP is made”, including shopping centers, or other landmark social meeting points in the proximity of workplaces, offices.

Besides expansion in Hungary, Bengyel says he plans to seek possibilities past its borders, too.

“Hungary is a very small market.

A company only has a future if it ventures outside the country,” he confirms.

Besides expansion, the company is also investing in IT development, using Estonian Cleveron’s original software as a basis but tailoring it to meet local needs.

Unlike its competitors, the company is operating on a non-outsourcing basis.

Since it considers quality of primary importance, Foxpost runs its own fleet of delivery vans and organizes warehousing at its own space.

“This is the only way we can take full responsibility for our service,” Bengyel says. “And this is why independent market research firm GKI has chosen Foxpost as the best quality provider among the so-called pick-up-anddrop-off networks, or PUDOs, for three consecutive years.”

The firm boasts the most advanced fleet in the industry by running

EURO 6 engines

only, to leave the smallest possible carbon footprint. It also manages to save fuel since there are no secondor third-time delivery attempts if someone is not at home.

According to publicly available data, besides private individuals, the owners of Foxpost are venture capital funds Finext Startup and Perion, the latter part of Wallis Group. While they have been enthusiastic about investing further into Foxpost upon occasion, Bengyel expects an eventual exit sometime in the future.

“Venture capital sooner or later wants to exit and make money on its investment,” Bengyel notes. “If there are partners we could imagine an exit with, we’re open to opportunities.”

PRESENTED CONTENT

Airport City Logistic Park – new phase succes

András Bodahelyi, leasing manager, CPI Hungary The E-F hall is the newest “big-box” building of CPI Property Group’s Airport City Logistics Park, completion of which will be finished by April 2019, with 4,000 sqm leased area already.

Upon the development’s completion, the park, currently 95% let, will offer a total of 55,000 sqm of warehouse and

office space, says András Bodahelyi, leasing manager at CPI Hungary.

The work on the 13,000 sqm facility began in the summer of 2018. The new hall features an interior height of 11 meters, industrial gates, high-quality groundworks, and carefully tailored dimensions.

“CPI also built a new road right next to the park in 2017, at a cost of HUF 100 million.

The aim was to service the increasing needs of Airport City’s tenants in a professional way, and achieve easy access for both cyclists and pedestrians”, he added.

CPI Hungary manages a wide-ranging portfolio with a total value of EUR 514 mln and a total floor space of almost 315,000 sqm, and is active in the office, retail, logistics and hospitality segments.

Airport City Logistic Xxxxxxxxxxxxxx Park in Vecsés.

22 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Logistics Sector Sluggish in Adopting High-Tech Solutions As much as technological innovations take all sectors by the storm, disrupting how we think about processes down to their cores, the logistics industry appears to be a generally slow adopter of digital solutions. That said, novelties currently in development — such as autonomous driving, for instance — could easily turn the market upside down, although, it will not happen tomorrow.

The Budapest Business Journal asked industry professionals about the latest trends.

solution is considered by small-, medium-, and large-sized players as a state-of-theart solution. Big data and AI-backed data analysis should, in theory, greatly add to optimization efforts in the future; however, there are no widespread solutions currently applicable today,” Gál says.

CHRISTIAN KESZTHELYI

At the beginning of January, the European Commission put forward a European approach to artificial intelligence (AI) and robotics, to boost both research and the industrial capacity of the European Union.

Hungary, along with a list of other countries, signed up to this approach.

Legislators already appear to be aware of how AI solutions can complement technological innovations to make them more sophisticated and help operations across all the industries.

While we see connectivity popping up in every sector, restructuring the way of work, the logistics sector is still heavily dependent on manual inputs and has been relatively sluggish to adopt new technologies.

“The freight forwarding industry is slow to adopt new IT tools and is still largely dependent on human interaction and contact.

There have also been spectacular failures.

Some large multinational forwarders and carriers have turned into a dead-end street by adopting the wrong IT tools, having to shoulder 100 millions of euros worth of damages and disrupting global supply chains,” Endre Gál, deputy CEO of Airmax Cargo Budapest Zrt., tells the BBJ. He adds that the industry is chiefly focusing on the integration of various transport management systems (known to the logistics world as TMS) to guarantee smoother data flow all across the supply chain.

“A very successful company to look at more closely is WiseTech; its CargoWise TMS

Pain Points

Logistics operations are almost by definition international, depending on a myriad of connections at different hubs all around the world. The number of intersections at which mistakes could occur is vast.

Utilizing technological solutions in order to track loads can ease the mind of all market players. Yet, what could be a blessing, could just as easily be a curse if it does not operate properly. Therefore, once a logistics firm decides to adopt a tech solution, it must make sure it works impeccably.

“We concentrate on solution design by connecting ocean, air and road transport, warehousing products. The biggest challenge for us is to find the best possible trace and tracking systems to provide our customers with full visibility of cargo movement and stock status,” says Tamás Tanárki, CEO of Yusen Logistics Hungary, which does not run its own trucking fleet.

“The goal is to provide a single viewpoint across multiple modes, regions and routes so we always know where customer’s shipments are. In the near future, the biggest challenge – and chance to improve efficiency – we will have is in the field of warehouse automatization,” Tanárki adds.

Access to accurate and real-time data enables a logistics firm to make informed strategic decisions about freight movements.

The logistics sector is seeing truly busy times. The rapid expansion of e-commerce is boosting the loads to be handled and increases traffic. European air cargo hubs are filling up, while Budapest Airport is building momentum (see “Budapest Airport Continues to Build Double Digit Cargo Growth”, page 15).

At the same time, the talent pool in the logistics sector is shrinking, which increases the pressure in the sector (see “Labor Shortage Hindering Logistics Sector” on page 20). The career of truck driver is especially in trouble, with its attractiveness falling.

Eager, yet Skeptical

Dialogue about autonomous driving is becoming ever more meaningful. Elon Musk of Tesla made headlines as early

as

2017

by talking about bringing autonomous driving to big rigs. While Tesla is currently working on its self-driving truck, Daimler announced in January it is be looking into its own project — albeit diesel-powered as compared to Tesla’s fully electric concept — outfitted with semi-autonomous technology. Logistics companies appear to be eager, and somewhat skeptical, about such technologies.

“Self-driving trucks seem to be a very interesting area and definitely will be the future,” Gál tells the BBJ.

“This would be an excellent solution to the problem of missing truck drivers, but I think that this is still a long way off as there are serious safety issues to solve. The market demand is definitely there, the question is rather the technical background.”

“I do, however, think that the transportation industry will be last to adopt.

The cost pressure is very high on the industry, and customers are only paying lip service to emission reduction by including fancy statements in their procurement policies.”

The utilization of electric vehicles and autonomous driving trucks appear to be the most obvious options to roll with, especially at a time when there are increasing calls to reduce CO2 emissions and challenges in recruiting more drivers, respectively.

“I do, however, think that the transportation industry will be last to adopt. The cost pressure is very high on the industry, and customers are only paying lip service to emission reduction by including fancy statements in their procurement policies,” Gál says.

“In reality, it’s all about cutting costs to the bone and robbing the last penny, no matter what the consequences are for the environment. There will not be any change without intense regulatory pressure,” the Airmax Cargo CEO concludes.

Special Report | 23

3

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Tenants Demand Higher Specs, Sustainable Logistics Facilities Logistics developers are building increasingly sophisticated industrial projects in reaction to developing tenant demands, such as automated warehouses and a growing concern with the working environment in tight labor markets.

10.5 meters

CTPark Budapest West. the building is air-tight and they are not leaking heat,” he continues.

GARY J. MORRELL

As with other commercial real estate sectors, the major industrial park developers and operators are seeking third-party sustainability accreditation such as BREEAM and LEED as tenants look to save on utility costs and developers need to comply with international environmental regulations.

Rising construction and labor costs are putting upward pressure on rents, increasing the need for ever more efficient logistics facilities and property management systems.

“Unemployment remains at a historic low, pushing the economy to its limits and industrial operations are working at maximum capacity. This encourages innovation and automation of warehouse operations,” comments Cushman & Wakefield.

“We see that Central Europe is as strong as Western Europe,” says Ian Worboys, CEO of P3 Logistic Parks. The company operates in Central Europe and has been considering market entry into Hungary for some time.

“In Europe about 25% of our occupiers are in some way involved with e-commerce. With, for example, a 25,000 sqm requirement in Central Europe, we could build this within five months.

BTS means the customer gets exactly what it wants. We only build class ‘A’ warehouses with top quality insulation as we are very conscious of ensuring that the costs of operators are as low as possible. This means that

logistics facilities, which require a much more diverse workforce than historical norms. We believe that the logistics market is on the verge of transforming the labor market. Automation/robotics impacts labor demand. This is expected to reduce some pressure for lower qualified employees, but the need for higher qualified employees will only increase. As seen in other sectors, automation/robotics does not necessarily lead to a reduced need for staff; it leads to a changing composition of the employee skillset,” Prologis adds.

Developers are competing by designing highly specified projects in reaction to changing tenant demands. CTP is now committed to developing BREEAM buildings. Two buildings at CTPark Plzeň in Czech have already received BREEAM “Very Good” certification.

The company retains responsibility for property management activities and all new BREEAM accredited buildings include in-house facility management, grid sizes of 12 by 24 meters, with

Being Responsible

“We are trying to make sure our buildings have all the green features and are ready for electric cars with electrical points.

We are part of the UN Global Compact (UNGC), which is the world’s largest corporate sustainability initiative, and we are the first logistics developer to be part of this. This shows we are being responsible but, at the end of the day, logistics is all about saving your customer money on, for example, lighting and electricity,” Worboys adds.

Prologis has commenced construction of a 10,600 sqm speculative facility at Prologis Harbor Park. The complex will be submitted for BREEAM “Very Good” accreditation; accreditation to a third party green organization is becoming the norm for regional industrial developers and industrial park operators.

Prologis describes the complex as the first Building Information Modeling designed logistics center in CEE. The system is a 3-D model-based process that gives architectural, engineering and construction professionals the tools to more efficiently plan, design, construct and manage buildings and infrastructure.

According to Prologis, sustainable features of the development will include high graded insulated wall panels and roof systems that, together with high performance gas fired heaters, can cut heating costs

costs by 40% compared to the latest lighting standard. Smart metering will also optimize water, gas and electricity consumption in the complex.

“The importance of labor in warehouses has risen in the last decade. Access to qualified labor in the 12 European countries where Prologis operates is a key rerquirement for real estate selection. More than 150,000 people work under Prologis roofs in Europe and their environment has never been more important,” explains Prologis Research.

Diverse Workforce

“A warehouse is no longer just a place for only storing goods. Higher value-added and complex activities now take place in

clear height and LED lighting, according to the developer. The usual construction period is around nine months.

Another European logistics park developer and operator, Panattoni Europe, is constructing a 45,000 sqm e-commerce logistics center for Amazon in Łódź in Poland. Panattoni is applying for BREEAM “Very Good” accreditation for the project that will include an intelligent building management system, LED lighting with motion sensors, enhanced wall and roof insulation and systems limiting water consumption.

With regard to locational issues, large land plots with access to labor markets at key public and road transportation hubs are becoming more difficult and expensive to source. A current trend in large European cities that could become evident in Hungary is the requirement for smaller urban logistics centers located within cities that facilitate shorter delivery periods.

“Access to labor is essential and availability is shaping location strategies.

It has become one of the most important themes in today’s logistics markets.

Logistics real estate has an opportunity to address these need by offering wellequipped warehouses in assessible locations,” said Prologis.

by

30%.

Further, energy efficient LED lighting and large skylights reduce electricity

Prologis Park Budapest-Harbor BIM building.

24 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

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1982 95

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gábor márta, andrea olár Edit Bokori –

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Budapest Business Journal | March 29 – April 11, 2019

addRess pHone email

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1989 70

Sped-Invest Team Kft. (100) –

istván sevecsek Judit Tankovics –

1138 Budapest, Szekszárdi utca 14.

(1) 450-9000 eurosped@eurosped.hu

– Raben Group N.V. (100)

Csaba árvai Noémi Szűcs Edit Rozmis

2330 Dunaharaszti, Jedlik Ányos utca 31.

(24) 502-000 hungary.info@ raben-group.com

Anita Bíró Karmazinné (100) –

gabriella szécsi László Pálmai Attila Katkics

5000 Szolnok, Városmajor út 23.

(56) 524-050 info@bi-ka.hu

– Rail Cargo Terminal-Praha s.r.o. (100)

viktor lippai Gyula Garai –

1239 Budapest, Európa utca 4.

(1) 289-6000 info.rct.bilk@railcargo.com

7,630

Ÿ

40,000

✓

✓

–

✓

✓

✓

✓

✓

✓

✓

✓

✓

Ÿ

1989 290

1991 165

www.raben-group.com

15

bi-ka logisZtika kFt.

6,965

Ÿ

40,000

✓

✓

✓

✓

✓

–

✓

✓

✓

✓

✓

✓

Ÿ

16

Rail CaRgo teRminal bilk ZRt.

2,704

Ÿ

Ÿ

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Ÿ

17

áti depo köZRaktáRoZási ZRt.

2,339

2,019

153,000

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

–

✓

Ÿ

1996 143

Z.I. Logisztikai Zrt. (100) –

józsef Földházi Mária Frühwirth Szabóné Györgyi Szabó Kovácsné

1136 Budapest, Pannónia utca 11.

(1) 305-2200 mail@atidepo.hu

18

veRsteijnen logistiCs kFt.

2,185

2,183

10,000

✓

✓

–

✓

✓

✓

✓

✓

✓

✓

✓

✓

Ÿ

1995 57

– Versteijnen Logistics Group B.V. (100)

sándor voller Zoltán Jobb –

9600 Sárvár, Ikervári út 42.

(95) 325-777 info.hu@versteijnen.com

19

masped logisZtika kFt.

1,937 (2017)

Ÿ

50,000

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Ÿ

2007

Masped Zrt. (100) –

marcell kovács István Ortó Péter Zoltai

1211 Budapest, Szikratávíró utca 17–21.

(1) 278-0951 logisztika@masped.hu

20

plimsoll ZRt.

1992 12

Individuals (49) TTS S.A. (51)

botond szalma Eszter Kassányi Vogl –

1139 Budapest, Frangepán utca 7.

(1) 210-9800 plimsoll@plimsoll.hu

21

Fluvius kFt.

www.bikalogisztika.hu

www.railcargobilk.hu

www.atidepo.hu

www.versteijnen.nl

www.masped.hu

2001

Ÿ

Ÿ

1,625

1,625

6,000

✓

–

✓

✓

–

–

–

–

–

–

✓

–

Dunaferr, Bunge, Cargill, Glencore, Péti Nitrogánművek, UBM

www.fluvius.hu

1,385 (2017)

Ÿ

Ÿ

–

–

–

✓

–

–

–

–

–

–

✓

–

Ÿ

2001 7

PLIMSOLL Zrt. (100) –

botond szalma – –

1139 Budapest, Frangepán utca 7.

(1) 237-1100 fluvius@fluvius.hu

22

inteRCaRgo HungaRy kFt.

973 (2017)

Ÿ

Ÿ

✓

–

–

✓

–

✓

✓

✓

✓

✓

✓

–

Ÿ

1993 8

CG Invest Kft. (100) –

Csilla gömze – –

1117 Budapest, Hauszmann Alajos utca 3/B (1) 425-2240 info@intercargo.hu

23

autókeR logisZtikai kFt.

Zoltán szabó – –

2360 Gyál, Heltai Jenő utca 73.

(29) 544-690 info@businesspark.hu

24

25

www.plimsoll.hu

www.intercargo.hu

www.businesspark.hu

euRo mini stoRage HungáRia kFt.

www.euroministorage.com

bajai oRsZágos köZFoRgalmú KiKötőműKödtető Kft.

344 (2017)

Ÿ

Ÿ

✓

–

✓

–

✓

–

–

–

✓

–

–

✓

Ÿ

1989 20

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt. (100) –

2006 6

– Euroministorage Investments (Cyprus) Ltd. (100)

danu m. temelie – –

1097 Budapest, Gyáli út 50.

(1) 333-8888 info@euroministorage.com

MNV Zrt. (33.33) Baja Municipality (33.33), ÁTI Depo Zrt. (33.33) –

lászló nagy – –

6500 Baja, Szentjánosi utca 12.

(79) 422-502 info@portofbaja.hu

250

225

7,500

✓

–

–

✓

✓

–

–

–

✓

–

–

–

Kempinski Hotel Budapest Zrt., Charity Hungary Közhasznú – profit Kft., Diatron Medicinai Instrumentumok Zrt., Magyar Jégkorong Szövetség, AGS BUDAPEST Kft.

98

Ÿ

Ÿ

✓

✓

✓

✓

✓

✓

–

–

✓

✓

✓

✓

Ÿ

www.portofbaja.hu

Ÿwould not disclose, NR not ranked, NA not applicable

1999

Ÿ

This list was compiled from responses to questionnaires received by March 27, 2019 and publicly available data. Data is based on companies’ own data revelations. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest,, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

NOTES: (1) Aggregate revenue figures of Eurosped Vámlogisztikai Zrt. and Eurosped Zrt. The two companies were separated on December 31, 2018.

26 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

Logistics parks

Where the routes meet +36 1 225 66 00 www.airportcity.hu

Ranked by total net warehouse space used for logistics warehousing (sqm)

opeRating Company name, addRess, phone, Website

WaRehouse logistiCs

Rail logistiCs

aCCessibility to tRuCks

aCCCessible via WateR

domestiC WaRehousing

building management

distRibution

Customs seRviCe

yeaR established

Company Website

net WaRehouse spaCe used foR logsitiCs WaRehousing (sqm)

Rank

seRviCes

oWneRship (%) hungaRian non-hungaRian

228,000

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2016

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

2051 Biatorbágy, Verebély László utca 2.

(30) 694-1001 david.huszlicska@ctp.eu

✓

✓

✓

–

✓

–

–

✓

1978

(100) –

béla mescsán – –

2045 Törökbálint, Hosszúrét (23) 338-044 titkarsag@depologisztika.hu

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone email

1

CtpaRk West

2

depo inteRmodális táRsas logisztikai központ kft.

215,000

depo intermodális társas logisztikai központ kft., 2045 Törökbáélint, Hosszúrét, (23) 338-044, www.depologisztika.hu

3

pRologis paRk budapestsziget

202,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, www.prologiscee.eu

–

–

✓

–

–

✓

–

–

2008

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tęsiorowska

2310 Szigetszentmiklós, Leshegy utca 30.

(1) 577-7700 info-hu@prologis.com

4

áti depo közRaktáRozási zRt.

153,000

áti depo közraktározási zrt., 1136 Budapest, Pannónia u. 11., (1) 305-2200, www.atidepo.hu

✓

✓

✓

✓

✓

–

✓

✓

1996

Z.I. Logisztikai Zrt. (100) –

József földházi Mária Frühwirth Szabóné Györgyi Szabó Kovácsné

1136 Budapest, Pannónia utca 11.

(1) 305-2200 mail@atidepo.hu

5

pRologis paRk budapestgyál

152,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, www.prologiscee.eu

–

–

✓

–

–

✓

–

–

2002

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tęsiorowska

2360 Gyál, Gorcsev Iván utca 7.

(1) 577-7700 info-hu@prologis.com

6

pRologis paRk budapesthaRboR

141,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, www.prologiscee.eu

–

✓

✓

–

–

✓

–

✓

2001

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

1225 Budapest, Campona utca 1.

(1) 577-7700 info–hu@prologis.com

7

Goodman Üllő airport logisztikai központ

131,730

goodman hungary kft., 1123 Budapest, Alkotás u. 53., (1) 336-2270, www.goodman.com/hu

✓

–

✓

–

✓

✓

–

–

2009

Ÿ Ÿ

istván kerekes – –

2225 Üllő, Zsaróka út 8.

(1) 336-2270 info-hu@goodman.com

8

mahaRt ContaineR CenteR kft.

104,000

mahaRt Container Center kft., 1211 Budapest, Weiss Manfréd út 5-7., (1) 278-3178, www.containercenter.hu

–

✓

✓

✓

✓

–

–

–

1997

High Yield Zrt. (50) WINTCO Kft. (50) –

zoltán fábián Etelka Pongor Siposné István Hajdú

1211 Budapest, Weiss Manfréd út 5–7.

(1) 278-3178 mail@containercenter.hu

9

CtpaRk east

102,500

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2016

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

2225 Üllő, Ipari Park (30) 694-1001 david.huszlicska@ctp.eu

10

east gate business paRk

102,000

Wing zrt., 1095 Budapest, Máriassy u. 7., (1) 451-4760, www.wing.hu

–

–

✓

–

✓

✓

–

–

2006

(100) –

– – –

2151 Fót, Akácos (1) 451-4760 egbp@wing.hu

11

Rail CaRgo teRminal bilk zRt.

95,000

Rail Cargo terminal - bilk zrt., 1239 Budaoest, Európa u. 4., (1) 289-6000, www.railcargobilk.hu

✓

✓

✓

–

–

–

–

✓

2001

– Rail Cargo TerminalPraha s.r.o. (100)

viktor lippai Gyula Garai –

1239 Budapest, Európa utca 4.

(1) 289-6000 info.rct.bilk@railcargo.com

12

login business paRk

75,000

Wing zrt., 1095 Budapest, Máriassy u. 7., (1) 451-4760, www.wing.hu

–

–

✓

–

✓

✓

–

–

Ÿ

(100) –

– – –

1044 Budapest, Ezred utca 2.

(1) 451-4760 ipari@wing.hu

www.ctp.eu

www.depologisztika.hu

www.prologissziget.com

www.atidepo.hu

www.prologisgyal.com

www.prologisharbor.com

http://hu.goodman.com/ingatlanok/kiadoingatlanok/ullo-airport-logistics-centre

www.containercenter.hu

www.ctp.eu

www.egbp.hu

www.railcargobilk.hu

www.loginbusinesspark.hu

Special Report | 27

3

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

opeRating Company name, addRess, phone, Website

WaRehouse logistiCs

Rail logistiCs

aCCessibility to tRuCks

aCCCessible via WateR

domestiC WaRehousing

building management

distRibution

Customs seRviCe

yeaR established

oWneRship (%) hungaRian non-hungaRian

67,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, www.prologiscee.eu

–

–

✓

–

–

✓

–

–

2000

Real estate funds (Ÿ) Real estate funds (Ÿ)

lászló kemenes – Marta Tesiorowska

2071 Páty, Szent József út 4.

(1) 577-7700 info-hu@prologis.com

m5-gyál business paRk

60,000

autóker logisztika kft., 2360 Gyál, Heltai Jenő u. 73., (29) 544-690, www.businesspark.hu

✓

✓

✓

–

✓

✓

✓

–

1989

X Ingatlanfejlesztő és Ingatlanhasznosító Zrt. (100) –

zoltán szabó – –

2360 Gyál, Heltai Jenő utca 73.

(29) 544-690 info@businesspark.hu

15

debReCeni logisztikai központ és ipaRi paRk

54,300

delog kft., 4020 Debrecen, Vámraktár u. 3., (52) 510-100, www.delog.hu

✓

✓

✓

–

✓

–

✓

✓

1990

(100) –

zsolt fülöp Julianna László Zsuzsa Szilágyi

4030 Debrecen, Vámraktár utca 3.

(52) 510-100 info@delog.hu

16

masped poRt logisztikai központ

50,000

masped logisztika kft., 1211 Budapest, Szikratávíró u. 17-21., (1) 278-0951, www.masped.hu

✓

✓

✓

✓

✓

✓

✓

✓

2001

Ÿ Ÿ

marcell kovács István Ortó Péter Zoltai

1211 Budapest, Szikratávíró út 17–21.

(1) 278-0951 logisztika@masped.hu

17

paRk22

45,000

White star Real estate kft., 1117 Budapest, Budafoki út 91-93., (1) 382-5100, www.whitestar-realestate.com

✓

–

✓

–

✓

✓

✓

–

2018

– (100)

– – –

1223 Budapest, Növény utca 7.

(1) 382-5100 info@park22.hu

18

CtpaRk tatabánya

40,500

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2017

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

2800 Tatabánya (30) 694-1001 david.huszlicska@ctp.eu

35,548

Cpi hungary kft.

1138 Budapest, Dunavirág u. 2-6., (1) 225-6600, www.airportcity.hu, www.cpigroup.hu

✓

–

✓

–

–

✓

✓

✓

2008

– CPI Property Group (100)

mátyás gereben Tamás Pók Bea Déri

2200 Vecsés, Üllői út 807.

(1) 225-6600 hungary@cpipg.com

34,000

diófa ingatlankezelő Kft., 1013 Budapest, Krisztina tér 2., (1) 888-4120, www.diofaalapkezelo.hu

✓

–

✓

–

✓

✓

✓

–

2004

Ÿ Ÿ

– – –

1097 Budapest, Táblás utca 36-38.

(1) 888-4120 alapkezelo@ diofaalapkezelo.hu

33,500

áti -sziget kft., 2313 Szigetszentmiklós, Pf. 18., (24) 406-120, (24) 406-110, www.atisziget.hu

✓

–

✓

–

✓

✓

–

–

2001

Z.I. Logistics Zrt. (100) –

gábor kovács-f.

Andrea Tornyossy –

2313 Szigetszentmiklós (24) 406-120 director@atisziget.hu

32,844

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

1990

– (100)

Roman skowronski, bartosz michal mierzwiak – –

2040 Budaörs, Akron utca 1.

(1) 382-5100 info@whitestar-realestate.hu

✓

–

✓

–

✓

✓

–

–

Ÿ

– (100)

Roman skowronski, bartosz michal mierzwiak – –

2051 Biatorbágy, Huber utca 5.

(1) 382-5100 info@whitestar-realestate.hu

Rank

net WaRehouse spaCe used foR logsitiCs WaRehousing (sqm)

seRviCes

Company Website

13

pRologis paRk budapest-m1

14

www.prologiscee.eu

www.businesspark.hu

www.delog.hu

www.masped.hu

www.park22.hu

www.ctp.eu

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone email

aiRpoRt City logisztikai paRk www.airportcity.hu, www.cpigroup.hu 19

20

dél-pesti Üzleti paRk

21

áti-sziget ipaRi paRk

22

www.diofaalapkezelo.hu

www.atisziget.hu

Camel paRk www.logicor.eu

✓

–

✓

–

✓

✓

–

–

23

tulipán paRk

28,252

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

24

pRologis paRk budapestbudaöRs

28,000

prologis hungary, 1095 Budapest, Lechner Ödön fasor 7., (1) 577-7700, www.prologiscee.eu

–

–

✓

–

–

–

–

–

2005

Real estate funds (Ÿ) Real estate funds (Ÿ)

kemenes lászló – Marta Tesiorowska

2040 Budaörs, Seregély utca 8.

(1) 577-7700 info-hu@prologis.com

25

CtparK Győr

26,000

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2018

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

9000 Győr, Ipari Park (30) 694-1001 david.huszlicska@ctp.eu

25

CtpaRk székesfehéRváR

26,000

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2018

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

8000 Székesfehérvár, Holland fasor (30) 694-1001 david.huszlicska@ctp.eu

www.logicor.eu

www.prologiscee.eu

www.ctp.eu

www.ctp.eu

28 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

aCCCessible via WateR

domestiC WaRehousing

building management

distRibution

Customs seRviCe

yeaR established

www.ctp.eu

aCCessibility to tRuCks

28

CtpaRk south

www.citypoint.hu

Rail logistiCs

27

City point 9 váRosi logisztikai központ

opeRating Company name, addRess, phone, Website

WaRehouse logistiCs

Company Website

net WaRehouse spaCe used foR logsitiCs WaRehousing (sqm)

Rank

seRviCes

oWneRship (%) hungaRian non-hungaRian

23,200

otp ingatlan befektetési alapkezelő Zrt., 1011 Budapest, Pálya u. 4–6., (1) 224-7790, www.otpingatlanalap.hu

✓

✓

✓

–

✓

✓

✓

–

2010

OTP Ingatlanbefektetési Alap (100) –

– – –

1097 Budapest, Gubacsi út 24.

(1) 336-0900 alapkezelo@otpingatlanalap.hu

23,100

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2019

– CTP Invest, spol. s r.o. (100)

Rudolf nemes – –

2330 Dunaharaszti, Ipari park (30) 694-1001 david.huszlicska@ctp.eu

✓

–

✓

–

✓

✓

–

–

Ÿ

– (100)

Roman skowronski, bartosz michal mierzwiak – –

2040 Budaörs, Vasút utca 11.

(1) 382-5100 info@whitestar-realestate.hu

✓

–

✓

–

✓

✓

–

–

2007

Ÿ Ÿ

– – –

2360 Gyál, Hrsz. 7000/15 (1) 336-2270 info-hu@goodman.com

Roman skowronski, bartosz michal mierzwiak – –

9027 Győr, Platánfa utca 1.

(1) 382-5100 info@whitestar-realestate.hu

top loCal exeCutive Cfo maRketing diReCtoR

addRess phone email

29

shaRk paRk

22,463

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

30

goodman gyál logisztikai központ

22,200

goodman hungary kft., 1123 Budapest, Alkotás u. 53., (1) 336-2270, www.goodman.com/hu

31

loGiCor Győr

19,509

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

✓

–

✓

–

✓

✓

–

–

Ÿ

– (100)

32

CtpaRk szombathely

19,300

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

✓

–

✓

–

✓

✓

✓

–

2016

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

9700 Szombathely, Puskás Tivadar utca (30) 694-1001 david.huszlicska@ctp.eu

33

innove business paRk

19,060

diófa ingatlankezelő Kft., 1013 Budapest, Krisztina tér 2., (1) 888-4120, www.diofaalapkezelo.hu

2006

Ÿ Ÿ

– – –

1097 Budapest, Táblás utca 36–38.

(1) 888-4120 alapkezelo@ diofaalapkezelo.hu

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– (100)

Roman skowronski, bartosz michal mierzwiak – –

2045 Törökbálint, Tópark utca 9.

(1) 382-5100 info@whitestar-realestate.hu

www.logicor.eu

http://hu.goodman.com/ingatlanok/kiadoingatlanok/gyali-logistics-centre

www.logicor.eu

www.ctp.eu

www.diofaalapkezelo.hu

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West gate business paRk

17,737

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

35

CtpaRk komáRom

14,400

Ctp management hungary kft., 2051 Biatorbágy, Verebély László u. 2., (30) 694-1001, www.ctp.eu

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2017

– CTP Invest, spol. s.r.o. (100)

Rudolf nemes – –

2900 Komárom, belterület (30) 694-1001 david.huszlicska@ctp.eu

13,300

masped logisztika kft., 1211 Budapest, Szikratávíró őt 19-21., (1) 278-0951, www.maspedlogisztika.hu

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2001

Ÿ Ÿ

marcell kovács – Péter Zoltai

2151 Fót, Keleti Márton utca 12.

(1) 278-0951 logisztika@masped.hu

13,069

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

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– (100)

Roman skowronski, bartosz michal mierzwiak – –

1097 Budapest, Fehérakác utca 3.

(1) 382-5100 info@whitestar-realestate.hu

12,499

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

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– (100)

Roman skowronski, bartosz michal mierzwiak – –

2230 Dunaharaszti, 51. út 017/70 (1) 382-5100 info@whitestar-realestate.hu

9,875

White star Real estate kft., 1111 Budapest, Budafoki út 91–93., (1) 382-5100, www.whitestar-realestate.hu

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Roman skowronski, bartosz michal mierzwiak – –

2040 Budaörs, Vasút utca 13.

(1) 382-5100 info@whitestar-realestate.hu

3,200

masped logisztika kft., 1211 Budapest, Szikratávíró őt 19-21., (1) 278-0951, www.maspedlogisztika.hu

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2001

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marcell kovács – Péter Zoltai

2120 Dunakeszi, Alagi major (1) 278-0951 logisztika@masped.hu

36

www.whitestar-realestate.hu

www.ctp.eu

masped észak-pesti logisztikai központ “b” teRminál www.maspedlogisztika.hu

37

38

39

40

logiCoR budapest www.logicor.eu

logiCoR dunahaRaszti www.logicor.eu

phaRma paRk www.logicor.eu

masped észak-pesti logisztikai központ “a” teRminál www.maspedlogisztika.hu

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www.bbj.hu

Budapest Business Journal | March 29 – April 11, 2019

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Budapest Business Journal | March 29 – April 11, 2019

Socialite

A significant number of the Brodyites actually provide content at some point in exchange for enjoying membership. BrodyLand says this is how it curates an open, progressive and artistic community.

BrodyLand is affiliated with 34 other clubs in

Walking Through Budapest’s ‘Doorway to a Higher Mind’ David Holzer overcomes his reservations to investigate what makes the BrodyLand concept work in Budapest.

14

people

and is popular with film crews. The Living Quarters provides furnished apartments in the city center.

One of these is London’s Groucho. I was, of course, reminded of my initial resistance to the entire BrodyLand thing.

I had intended my meeting with Csonth to be short and sweet, allowing me to poke my head round the door of The Workshop and get a quick feel for the place. As it turned out, it was so convivial that I spent an hour or so chatting and thoroughly enjoyed myself.

‘Plain Vanilla’

DAVID HOLZER

I didn’t want to like Budapest’s BrodyLand.

The whole concept felt a little too calculated and nice. Also, I’m with Groucho Marx, who famously said, “I refuse to join any club that would have me as a member.” But I was intrigued so I arranged to meet BrodyLand PR and marketing person Julia Csonth at The Workshop, its downtown club space.

Including The Workshop, BrodyLand spans five venues in the city and describes itself as “…a doorway to a higher mind and a creative spirit…”

Brody House is an award-winning boutique hotel. “The Hotel Guru” website called it: “The coolest place in the city”.

The Studios offers spaces that can be used for events from parties to formal corporate bunfights. Located in the Buda hills, The Writer’s Villa is a restored 19th-century house that accommodates groups of up to

19

countries.

As the group’s website puts it, “The Brody community, aka ‘Brodyites’ or citizens of BrodyLand includes a wide range of creatives, Hollywood types, entrepreneurs and anyone trying to earn an honest crust in Budapest that is drawn to BrodyLand’s convivial and private environment.”

The Workshop has clearly been designed for a funky, unpretentious vibe but it isn’t “quirky”. The beer pumps aren’t branded and don’t light up like giant alien fingers.

My host at The Workshop was Csonth, but we were also joined by Matthew

Csonth put me in touch with Peter Grundberg, co-founder and director of BrodyLand with William Clothier. Both men are in their early 40s. Grundberg’s answers have been edited purely because of space considerations.

Grundberg and Clothier got their start in Budapest developing properties. “We worked on what one might describe as our own ‘plain vanilla’ apartment renovations, bought and flipped a few units then set up an investment fund,” Grundberg told me.

“After the tumult of Lehmans in 2008, we elected to rewrite our game plan rather than return to London licking our wounds. Stubbornness, a belief in the city of Budapest and seeing a gap in the hotel market encouraged us to give our ‘fresh’ ideas a go. This outlook gave us an identity and, dare I say, some charm.”

What’s the origin of “Brody”? “We Quiz night for club members. doff our cap to Alexander Brody – the Hungarian writer – after whom the street on which Brody House, our first hospitality Sanderson, who works as a cultural venue, is sited. It wasn’t long before our and marketing consultant for ‘house on Brody Sandor Street’ became the group. They were friendly, shortened to Brody House. The name stuck charming and open. so there was no need for us to engage a branding consultant!”

Life in BrodyLand I was most curious as to how Hungarian I gathered that BrodyLand started around creatives benefitted from BrodyLand. “We ten years ago. Members are aged from hope to feed creativity in Budapest in all 18 to 70. Most are based in Budapest but sort of ways,” Grundberg wrote. they’re equally likely to come from Vienna “Our contribution has come in the form or the United Kingdom. of rent-free studio space, showcasing BrodyLand’s social calendar is filled talent, purchasing artworks and with events that include parties with DJs, generally promoting people through the English language stand-up comedy nights BrodyLand platform both locally and and an open mic Story Slam. I liked the internationally. An artist called Ludovic idea that being a citizen of BrodyLand Thiriez who started his painting career gave me somewhere to go in Budapest at in Brody House ten years ago won the night that wasn’t a bar, restaurant or music Luxembourg Art Prize in venue where it was impossible to sit down or talk at a normal volume.

At first, I couldn’t figure out why We were delighted for him and his BrodyLand was so successful. The dedication in his recent catalogue thanking artistic types I’ve gotten to know in us for the support over the years was the city are always talking about how deeply touching.” tough it is to make a living here. I And what about the future? “We would couldn’t see them forking out for club like to expand the BrodyLand format membership. But when Csonth explained both in Budapest and potentially further that BrodyLand works closely with the afield. We’re putting in some late nights film industry, I began to get the picture. to make it happen. Fingers crossed and The Writer’s Villa is apparently a favorite stay tuned!” location and, as “Daily News Hungary” As a convert to the BrodyLand concept, put it, “offers privacy for even the most I wish Grundberg and Clothier all the reclusive movie stars”. best. I walked away from The Workshop If Hollywood and international business with a “Scribe Visa” that gives me a money is helping BrodyLand to offer a year’s membership of BrodyLand. I have safe haven for artists in these challenging to say I’m delighted. times, I’m all for it.

2018.

Bar and drink consultant Dez O’Connell gives regular cocktail workshops at Brody.

4

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Budapest Business Journal | March 29 – April 11, 2019

Furmint Frenzy Spreading to British Isles, Kabar Catching on at Home The locally famous Furmint grape, in its dry guise, appears to be gaining more traction on foreign markets as the impact of communication campaigns kicks in, twinned with ever-improving quality.

ROBERT SMYTH

In a February article in The Guardian newspaper, Kate Hawkings asks whether Furmint is “the tastiest grape you’ve never heard of?” and declares: “Of all the grapes in all the wines in all the world, Furmint is probably my favorite.”

It looks a very good idea to have put Furmint on Pall Mall, at number 67 Pall Mall to be precise, at a trade and press tasting on January 30; hats off to organizers, Wines of Hungary UK. An article in The Irish Times dated February 25, urges readers to: “Try something different: Furmint grape makes delicious, dry white wines.” The wine featured in the article is Taste the Difference Dry Furmint, Tokaji 2017, which is made by Royal Tokaji. This British-owned winery made a sumptuous splash in the wine trade earlier this month when it launched what it claims is the world’s most expensive wine: a

1.5 liter

bottle of 2008 Essencia that costs a mere USD 40,000 a pop.

Made only from the ultra-intense freerun juice of botrytized (mainly Furmint) Aszú grapes – which are picked individually, noble-rot berry by berry in several sweeps

of the vineyard – Essencia steps out of the usual wine spectrum with its very low level of alcohol (4% tops) and remarkable amount of residual sugar (in excess of 400 g/l).

Some 181 kg of botrytized grapes have gone into each of the 1.5 liter decanters, making it even more intense than most Essencias. The alcohol is so low because the yeast dies off sharply in such a sugar rich environment when fermenting in glass demijohns. Just 18 magnums have been made of this wine, which is often served in a dessert spoon rather than a glass, with one already destined for Beijing.

Dominant Grape

Back in Budapest, Furmint unsurprisingly dominated the dry top ten ranking of Winelovers’ Tokaji Március event; around two-thirds of the Tokaj region is planted with this grape. This list, compiled from the results of a blind tasting involving a number of experts (as a regular participant in such Winelovers’ tastings, I can vouch for its professional approach) involving wines generally available at the big public tasting, was topped by the upcoming Erdőbénye-based Préselő Pincészet’s Omlás Selection Tokaji Furmint 2015.

Note to self and all wine lovers: do turn up early to tastings like the Grand Tasting of Tokaji Március if you want to taste the top-rated wine! This spontaneously-

fermented wine was in fine shape – complex, waxy, concentrated yet lively – at the main Furmint February tasting and reflects owner/winemaker Zsolt Nagy’s oak approach of using the “the barrel for micro-oxygenation, not for oak influence.”

This wine has run out by now on the market and at the cellar, but for something well outside the box, try Préselő’s fruity yet suitably restrained and elegant rosé (HUF 1,800 from the cellar), a blend of Cabernet Sauvignon, Kékfrankos and Merlot. It cannot be sold as Tokaj due to the grapes not being among the permitted varieties, so is marketed as Zempléni.

Like Préselő, Tokaj Sanzon also has a plot in Erdőbénye’s exciting Rány vineyard, whose wines often exude exhilarating acidity and a Chablis-like, cool-climate chillingly fresh factor. Sanzon’s Rány Furmint 2016 (HUF 6,290 from Onlinebor. hu) took third place.

While this wine has the vineyard’s trademark firm acidity (the temperature here is usually a few degrees colder than Mád, for example), it is also really elegant with lots of soft fruitiness to take the edge off the acidic bite. It was made only in the tank, which helps seal in the considerable zesty freshness, but it doesn’t miss the body or texture that many believe can only come from vinifying in oak.

Nuanced Tastes

Sanzon also claimed sixth spot with its Classic Furmint 2016. Furmint is prized by vintners for its ability to capture the nuances of the very different vineyards that

Socialite | 31

exist across the plethora of mixed volcanic soils, as well as loess, and is therefore just the ticket for single vineyard bottlings.

However, it can also work very well as an estate blend encompassing several plots as the balanced and quincy Sanzon Classic 2016, which sees a few months of ageing in oak, shows. Incidentally, the 2015 version was top dry white in last year’s ranking.

Kabar, one of the permitted grapes for Tokaj

since

2006

and a crossing of Hárslevelű and Bouvier, continues to perform well, taking two of the top ten places in an otherwise Furmint-dominated hit list.

Kabar can possess seductive fruitiness that can make it stand out and last year propelled it past the rest of the pack with the upcoming Péter Pincészet’s Tokaji Kabar 2016 claiming top spot last year. The fledgling Tokajtown based cellar’s 2017 bottling followed up nicely this year by coming in fourth.

Füleky Pincészet’s Kabar 2017 (HUF 4,480 from borbazis.hu) was the runner-up in this year’s top ten. It has a citrusy nose and a soft, caressing palate of fruit salad notes, but with zesty acidity to hold it together.

Rózsa Pincészet is the new name in this year’s hit-list with two entries in the top ten.

It’s “Együtt” Tokaji Furmint 2017 is an absolute bargain at HUF 2,500, available from the cellar in Tállya.

This year, perhaps surprisingly, Kabar’s parent grape of Hárslevelű, which can sometimes outperform the steelier Furmint with its often more seductive aromas and texture, only made the list partnering with Furmint in a blend, but not as a single varietal.

Grapes displaying the much prized noble rot.

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