Hungary News

Check back regularly to get all the latest and most up-to-date news on property and investment opportunities in Hungary and Budapest.

Budapest Airport to become regional centre

Thursday, June 21, 2007

Hochtief Airport (HTA), new owner of Budapest Airport, has ambitious plans to transform Ferihegy into the most successful airport in the Central-Eastern European region as Hungary Tourism reported. Budapest has  been a focus of HTA`s expansion plans, as the German consortia also participated in the first privatization tender for the airport in 2005, where it came in second after BAA, the company which has just sold them the property.

HTA, operator of 6 airports around the world (Athens, Dusseldorf, Hamburg, Sydney, Tirana and now Budapest), will spend more than 261 million on Ferihegy`s development until 2011, and it will comply with all obligations laid down in the privatization contracts.

Budapest Airport will increase the capacity of Ferihegy and will improve customer services, check-in and security search processes by significantly developing T2 and T1. A unified terminal will be built by fusing T2A and T2B, including an Airside Plaza connecting the transit areas of T2A and T2B, which will introduce international brands and high international retail standards. To serve the airport and Budapest cargo businesses, BA will also build a new cargo base near T2, in Vecses.

BA will be developed as a self-contained "Airport City" with a 4-star hotel and conference facilities, car parking, a business and trade park. Traffic at Budapest Airport has been growing at a rate of 11% annually, and though this sort of increase cannot expect to be repeated, HTA is still predicting a 5-6% annual growth rate in the short term.

OECD Sees Hungarian Rates At 6% By End-2008 Vs Current 8%

May 22 2007.
Source: http://www.djnewswires.com/eu

OECD Sees Hungarian Rates At 6% By End-2008 Vs Current 8%

BUDAPEST -(Dow Jones)- The Organization for Economic Cooperation and Development expects Hungarian interest rates to come down sharply over the next few quarters, and to hit 6% at the end of 2008 compared with the current 8%, OECD Deputy Director Andrew Dean said Tuesday.

"The fall in inflation will allow the central bank to reduce interest rates in the longer term," Dean said at a press conference following the publication of a country survey on Hungary.

ACE Europe Opens Offices in Hungary and Czech Republic

May 21st 2007

The ACE European Group has opened two new offices in Budapest, Hungary and Prague, Czech Republic, as part of its expansion plan for Central and Eastern Europe.

Peter Dudas will head ACE's Hungarian operation as General Manager for the country. He joins ACE from Genworth Financial where he was the Country Manager for Hungary.

Jiri Schneller has been appointed as General Manager to run ACE's Czech Republic operation, and will also be responsible for the company's activity in Slovakia. He joins ACE from Winterthur Life Insurance Company where he was Head of External Service.

Both of the new managers will report to ACE's Regional Director for Central and Eastern Europe - Andras Koppanyi. He commented: "Our new operations in the Czech Republic and Hungary will complement our existing CEE offices in Poland and Russia, enabling ACE to capitalize on strategic opportunities as the region continues to develop."

David Furby, ACE's President of Continental Europe and the CEE, called the expansion "a very exciting time for ACE as we extend our operations across Europe." ACE now operates in 19 European countries.

"Peter and Jiri will provide both operational and strategic leadership in their respective countries," Furby continued. "They will be responsible for the launch of both property and casualty and accident and health business lines in Hungary, Czech Republic and Slovakia and will work to explore other potential opportunities."

Crytek Thinks Outside of the FPS

May19th 2007 By Kris Graft

Crysis creators Crytek announced today a new studio in Budapest, Hungary, which will be working on a non-FPS title. Next-Gen spoke with Crytek about the flexibility of CryENGINE 2 and Eastern European development.Frankfurt, Germany-based Crytek is mostly known for triple-A first-person shooters, but that could change to an extent in the near future. The studio created the highly-acclaimed FPS Far Cry (now an Ubisoft property) and is currently developing Crysis, one of the most-anticipated titles for PC.

But with the establishment of a new Budapest studio, Crytek is looking to expand beyond the FPS genre. “We think that there are a lot of other interesting opportunities out there,” said Crytek engine business manager Harald Seely in a phone interview. “We haven’t really scratched the surface of CryENGINE can do. We want to explore those opportunities…”

The establishment of the Budapest studio is the second major announcement coming out of Crytek in the last two weeks. Earlier this month, Crytek announced that its Kiev location had been upgraded to full development studio status and is working on a new original property.

But why found a brand new studio in Budapest? Eastern Europe has mostly been known as an area where Western companies can outsource work to curb development costs, not as a hotbed of full-blown triple-A title development. Seeley said that nevertheless, there is an impressive talent pool in Budapest and it’s an attractive location.

He said Crytek in the past had recruited a number of people from Budapest who were very capable and experienced developers. Some of these employees suggested setting up a studio in Hungary’s capital, and Sealy said it “just made sense” because of the reasonable cost of living and diverse population.

“It’s one of those cities where you feel at home very quickly,” Sealy said. The attractiveness of Budapest could also be used by Crytek to convince future employees to relocate if necessary, so there’s the recruitment aspect that’s taken into consideration as well.

“Eastern Europe as a source of game development has already proven itself,” he explained. “It’s already growing very quickly, a lot of companies have put studios in the East. A lot of them aren’t really publicized. A lot of the work is in the mode of outsourcing. But I think as they become more and more experienced with the tools we have today, there’s going to be a lot of original ideas coming out of there as well.”

As for that PS3 project, Seeley’s lips are sealed, so Crytek fans can speculate away. “How’s our PlayStation 3 project coming? I wasn’t aware we announced any PlayStation 3 project yet,” he said.

Vodafone 'invites' UK staff to new centre in Budapest

Source: Telegraph.co.uk By Josephine Moulds
12th May 2007
Vodafone is "inviting" some of its staff to move to Hungary after the mobile phone giant decided to base a service centre in the low-cost country to handle the group's financial processes and transactions world-wide. It will not handle telephone customers' bills. A spokesman said: "We're saying that some jobs may move to the [shared service] centre. But we will give employees a chance, where possible we will ensure employees have adequate time to plan their future." The centre will be based in Budapest and will employ about 700 people by 2009.

Vodafone hopes to fill as many of those posts as possible from internal staff. The company said the natural reduction in the work force while setting the centre up should reduce the number it invites to move. The total cost of the centre is about 9bn forints (£24m). The Hungarian government is supporting Vodafone with tax breaks and an incentive grant for its investment. The size of the grant will be disclosed in 60 days. Hungarian economy and transport minister Janos Koka said: "We are signing a deal that is really worth it for the Hungarian state."

The move is part of a three-year restructuring plan aimed at integrating human resources, finance and supply chain operations across Vodafone's majority-owned businesses in order to cut costs. The centre will handle simple business transactions such as business-to-business billing, which Vodafone says will enable existing employees "to focus more on business analysis and strategy".

Vodafone said it picked Hungary for its central geographic location, supply of qualified labour, its communications network, and the government's active support. It joins a host of companies that have moved their service centres to the Hungarian capital, including IBM, Morgan Stanley, Citi and BT.

Vegas-style resort for eastern Europe

London hedge fund managers are being asked to consider striking it lucky by investing in a multi-billion pound Hungarian casino development alongside Australian media magnate James Packer and the philanthropic Guggenheim family. Investment bank Credit Suisse is raising €137.5m (£93.8m) from hedge funds and other institutions to fund EuroVegas in Hungary. It is understood to be the first time a financing of this kind has been carried out in Europe.

EuroVegas will be a Las Vegas in the heart of eastern Europe, with five super casinos to be located close to the town of Bezenye, currently home to 1,650 people, in the Gyor-Moson-Sopron region in north-west Hungary, close to the Austrian and Slovakian borders. As well as the casinos, the project will include a series of hotels, as well as a giant amusement arcade centre. The hope is that the development will attract wealthy Russians to what will be Europe's largest casino resort.

Credit Suisse is sole arranger of the syndication, which is for a term loan to back the acquisition of an 80pc controlling position in the land and gaming licenses for EuroVegas. The three firms putting up the equity are Mr Packer's Publishing & Broadcasting, Guggenheim Partners, the wealth and investment management firm with links to the philanthropic family of the same name, and Eighth Wonder Capital, controlled by casino developers Mark Advent and Mark Vlassopulos.

The remaining 20pc will be controlled by the Asamer Group, which is selling the 80pc stake and will be the local partner for the development. The hedge funds' money will be used to back the acquisition of the greenfield land site and to start development. Work is expected to begin in April 2008 on the 240-hectare plot.

A change to the country's Gambling Law made possible super casinos. The deal follows a number involving the various investment partners working together to build new casinos.

Mr Packer's PBL teamed up with Eighth Wonder to bid for Singapore's second casino resort in October 2006. Earlier this month, PBL made its first foray into the US casino market, buying a 19.6pc stake in Fontainebleau Resorts which is developing a new casino resort on the Las Vegas strip.

Suzuki profits

Suzuki Hungary: €1.48bn in 2006.

ACCORDING to a statement issued by Suzuki, the Japanese carmaker expects €1.48 billion in revenues from its Hungarian unit in 2006, business portal Figyelô reports.

€100 million medical investment

MEDICAL products supplier Coloplast Magyarorszag is to invest €100 million in a unit in northeast Hungary, business daily Világgazdaság reports.

Creating 1,000 jobs, the investment will be supported by the government, the daily said, citing unnamed sources.

Economics Minister János Kóka said he would neither confirm nor deny Világgazdaság's claims, though he did say that, since 2004, the government had provided funding to the tune of 10% of total investment as an incentive package to foreign companies investing in Hungary. In 2004 the government introduced a support system for foreign businesses investing in Hungary, and since that time has aided 34 projects worth €2 billion, creating some 16,000 jobs, state news agency MTI reported.

Some of the largest investors benefiting from the government's support scheme have included Korea's Hankook Tire, GE Money Bank and German appliance producer Bosch.

Tesco to embark on massive expansion in Hungary

April 26, 2006. 

British supermarket giant Tesco is planning to expand massively in Hungary this year, opening 25 new stores and 17 petrol stations, which would create 2,500 new jobs after the 2,200 positions it established in 2005.

Manufacturers Turn to Central and Eastern Europe for Expansions.

Companies like L.G. Philips, Hewlett-Packard find lower costs of doing business in this growing region.

China is turning mature nations on end. But for Western Europe, the continually emerging economies of Central and Eastern Europe are giving countries like Germany, France, the UK and the Netherlands a run for their money.

The United Nations Conference on Trade and Development (UNCTAD) maintains that Asia and Eastern Europe offer the most positive foreign direct investment (FDI) prospects through 2008.

Supachai Panitchpakdi, secretary-general of UNCTAD, said the findings suggest that countries need to seize the investment opportunities but must also pay attention to the quality of FDI, given the fierce competition for investment.

“Central and Eastern Europe is a dynamically growing market and our business is expanding faster than in Western Europe or the U.S.,” said Jan Zadak, vice president and managing director for the ISE Region for Hewlett-Packard.

HP has collaborated with local technical universities to train potential job candidates in the months leading up to the opening of the facility.

Expansions in Hungary.

Hungary is drawing an impressive share of high-end business thanks to the government’s investment promotion strategy to focus on higher-value-added manufacturing and R&D activities in areas such as automotive, aerospace/aviation, IT and high tech.

Late last year, Dayton, Ohio-based NCR Corp. began production at its new automated teller machine manufacturing plant in Budapest. The plant provides additional capacity to the expanding Eastern Europe and Russian markets. The plant complements existing manufacturing activity at NCR’s facility in Dundee, Scotland.

“Our regional manufacturing strategy plays an important role in enabling NCR to get our product to the customer faster and more efficiently,” said Keith Taylor, senior vice president of NCR’s Financial Solutions Division. “We needed a new facility physically closer to Eastern Europe markets to meet and manage additional demand and, at the same time, lower our shipping costs.”An advantage for the operation is Hungary’s excellent transport links and infrastructure.

“The country also provides good access to suppliers for our manufacturing operations,” Taylor pointed out.

Logistics is a natural fit for Hungary, thanks largely to its central geographic location and the number of Fortune 100 multinational companies there.

INVESCO Buys Two Assets in Central Europe for $114M

INVESCO Real Estate has committed €90 million (U.S.$114 million) to purchase the first two properties for its new Central Europe II fund. For €63 million (U.S.$80 million) it acquired the Raiffeisen Business Center building in central Warsaw from Raiffeisen Property Management. For €27 million (U.S $34 million) it bought the Auchan Logistics Centre near Budapest from Auchan, the hypermarket chain.

The 37,500-square-meter Auchan Logistics Centre is fully let to Auchan Magyar as a hypermarket distribution center.

“Central Europe is a strong logistics hub,” Maudling said. “Companies are moving many of their distribution facilities there to take advantage of lower labor costs.”

Paul Kennedy, head of research in Europe for INVESCO, noted, “Recent upward pricing in Central Europe has enhanced the importance of having expertise on the ground. You’re not going to be rescued by the rising tide of prices anymore. You need to ensure that you can deliver the returns without as much yield shift.”

Hungary gets further development

Hungary is to get further development, increasing its already healthy property portfolio for potential investors.

Real estate property investment firm Pacont announced that it has taken ownership of the prime Vaci ut corridor in Budapest. "Vaci ut is an obvious first choice for many property development projects," said Benny Iggland, head of Pacont. "One good reason for this is the excellent position and infrastructure." His comments come as the prime area undergoes a massive investment in road building and planning initiatives.

This will create even more investment opportunities in Budapest and Mr Iggland said that demand was such that prices were already rising.

Good returns are also being offered, with Mr Iggland expecting an annual return of at least six per cent on the Vaci ut development alone.