– First of all, let me congratulate you on the new development of the GTC, the White House. As a citizen, I always glad to see such old and imposing buildings under reconstruction with up-to-date content like the 100-year-old Schlick elevator factory. Do you already have tenants?
– The first tenant is BlackRock, the world’s largest asset management company who will take their first occupancy in July 2018. BlackRock chose Hungary and GTC White House as a permanent home for their Innovation and Technology Centre in Budapest. GTC have agreed terms for a further two floors of the new offices and is currently engaging in serious negotiations for the remaining vacant space with world class tenants, which predicts the possibility that the building will be 100% occupied by Q3 2018.
– An earlier interviewee said that tenants had to make familiar with the 20 € /sqm rent fee, at least on Váci Road, which, in addition to increased demand, caused by rising construction costs. Do you agree?
– No. Even if the vacancy rate is very low the 20 € is economically not realistic, and I think the level of 15 and 15.5 € is down to earth.
– GTC Hungary has two other ongoing office real estate projects besides the Pillar at the corner of Dózsa György Road and Váci Road, you will have the building permit soon for the 90 meter high Twist tower. Actually what are they waiting for?
– We do not wait, in the next few weeks we plan to start to build the 23-story Twist building. We will hopefully get permission for the Pillar in July, and we will begin the construction of that building as well. We know the local regulations, and the district government has good experts, and is familiar with professional developers. We work together well. For example, the 13th District locale government expressed their opinion that a green solution would be welcome at White House. We built a roof garden that is watered by rainwater. So we found a solution that makes everyone satisfied. We stay in the area; our future plans are concentrating to this district.
– How long do you think the office market boom in Budapest lasts?
– Every market has its own cycle, we are on the top and I think we'll stay there for a couple of years. We are in a positive phase, not just GTC, but for the whole country. I'm optimistic but nothing lasts forever. The yield is still around 6%, which is a particularly favourable value.
– But it keeps decreasing...
– Yes, but it also means that the value of buildings is getting higher and higher.
– Who are the tenants, what drives the market?
- We have various tenants, shared service centers, innovation companies, IT businesses, product developers, etc. These are companies that employ young engineers, not necessarily Hungarians, but from all over the world, since Budapest is a great place to live. I've been living here for 20 years. The GTC has been present on the Hungarian market since 2000, White House is the 9th building I have been involved in, and six of them are office buildings. During the crisis, we maintained our existing buildings, and we maintained contact with tenants, as we always want to know what they want.
– And what do they really want?
– They like to be recognised important, they like to get the right services – new technologies, new types of office space – and served by their needs.
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