Budapest Business Region

At the beginning of March of this year, as in every year, the world’s real estate market players had their eyes on the Cannes Riviera. Here, the world’s premier real estate market summit, the MIPIM, serves as an annual pinnacle point of reference and market indicator for the sector. It was no different at this year’s MIPIM and we can safely say that it has perhaps never been this important for the industry players to come together and cooperate to seek out the answers to the enormous uncertainties hovering over the global markets and further to determine, even to a minor degree, which way the real estate markets will go in this still rather uncertain financial and economic environment.

 

MIPIM, the world’s largest real estate market fair celebrated its 20th birthday this year. However, the mood at the show, with the ghosts of the global financial and economic crisis looming in the background, was more gloomy than celebratory. The event, seen as representing a cross-section of the global real estate market, could hardly deny that the industry it represents is now wrestling with one of the biggest challenges in its history.

MIPIM exhibitor and visitor numbers have been hitting record highs, buoyed by the previous years’ real estate market euphoria and despite the dark clouds gathering over the European real estate markets. The show’s 29,000 visitors broke attendance records last March. However, it appears that, just like the sector itself, MIPIM is also experiencing a spectacular change in trends this year. A mere 18,000 visitors registered for the March 2009 event (instead of the previously estimated 29,000). In the end, the total area of the fair had to be reduced by 4,000 sqm, compared to what was originally planned.

One of the most notable phenomena from the trade show was the decline in the presence of Russian and Near Eastern participants, despite these areas’ dynamic growth in the past. At the same time, we must note that Moscow, Sochi, various other Russian regions, and a dizzying volume of Near Eastern projects were all still strongly represented by the most spectacular, impressive stands, in accordance with their global real estate market weight. Although walking around at the trade show, visitors couldn’t help bumping into promotions for Moscow; just imagine, an entire Russian Village pavilion was actually removed by the organizers from the trade show’s original floor plan. It was not only Russian representation that shrank significantly. As a surprise to all, the City of Bucharest, still present on the exhibitors list a mere two weeks ago, also disappeared without a trace. In its place, organizers set up an ad hoc stand at the last moment. In contrast, regional capitals such as Prague, Warsaw, and Bratislava (and, even more importantly, a lot of secondary cities and regions) showed up at the fair in good numbers, with prominent and good-looking stands, as well a couple of extra activities too.

At the same time, developers and international real estate consultancies - the largest players on the European real estate markets - all drastically reduced the number of their delegates and their participation was much more low key. Overall, this world-class event bore witness to trimmed budgets everywhere and, this year, work and business truly did get the spotlight, as opposed to previous years’ proclivity towards fancy shows and festivities.

This year’s MIPIM will probably not be remembered by most international players as the most productive or pleasant. However, we will undoubtedly be able to consider it a milestone for Hungary and Budapest. Budapest represented itself at this year’s fair with a stand three times bigger than in previous years (150 sqm) and with a much more intensified and unified overall appearance than ever before. For the first time this year, the Budapest stand was the result of a large-scale cooperative effort between the city of Budapest, the government, and the Budapest Business Region (BBR) cluster (which now boasts 20 members). Working together, they provided our capital and country with a world-class appearance at the world’s largest real estate market trade show.

The focus of this year’s Budapest stand was “innovation,” emphasizing both that the headquarters for the European Union Innovation and Technology Institute is being built in the Hungarian capital and the fact that 2009 is the Year of Creativity and Innovation in Europe. In addition to innovation, the stand emphasized the strategic location of Budapest as a region, the unique opportunities offered by the Danube, and Hungary’s highly-skilled human resources. Under the auspices of the Budapest Business region, DunaCity, Talentis Group, TóPARK, Duna Spirit, B&V Group, Martinsa Fadesa, as well as BBR’s cluster management company, AERA Property Marketing, all exhibited at the stand. BBR represents a further 12 cluster members, who did not appear at the event as separate exhibitors. The city of Budapest was represented by Studio Metropolitana and the Hungarian state by ITD Hungary.

This year, Budapest offered a number of programs, several panel discussions, and press conferences at the summit as well as intensifying its presence with a number of extra events - such as an article in MIPIM’s official publication and promotional activities featured on the fairgrounds. For the representation of Budapest and Hungary, the most significant part of this year’s MIPIM event was, undoubtedly, the End User Lunch held on Thursday. The event, organized for the first time in MIPIM’s history, hosted strategic decision-makers from the world’s 80 most significant companies (including, among others, Microsoft, Google and UPS). As the exclusive sponsor of the lunch, Budapest secured a singular opportunity to extol the virtues of the Budapest region in a seven minute presentation about the benefits of expansion into Central and Eastern Europe. Gordon Bajnai, Hungary’s minister of national development and economy, gave a presentation at this lunch in which he summarized the strongest arguments in favor of the region. As the first concrete result of the event, three world-class companies – Alstom, 3M and Christian Dior – have already expressed their definite intention to set up office centers in Budapest.

The Budapest cooperative exhibit and the country’s unified communication efforts have not escaped international notice: “Despite Hungary’s present, exceedingly negative reputation, the message at this year’s Budapest stand was incredibly positive. Everyone is talking about the Budapest stand and no one would miss [the opportunity to see] it,” John Duckworth, regional director at Jones Lang LaSalle, told REsource.

The exhibitors representing Budapest considered the cooperation between the city of Budapest, the Hungarian state, and developers to be the greatest result at this year’s MIPIM. “This crisis showed that something has to be done differently than before. A paradigm shift is necessary and that’s exactly what we’re doing here,” said Péter Gauder, president of Studio Metropolitana, summarizing the moral of this year’s trade show.