In recent years the most significant change in CPI Hungary’s retail business unit involved retail parks, as the acquisition of Immofinanz in 2022 added 14 STOP SHOP retail parks to the portfolio that had included the CityMarkets in Dunakeszi and Soroksár. Retail parks are highly successful, they have remained profitable despite the economic challenges, and the occupancy rate of the buildings is 100%.
Across the whole retail portfolio, the buildings have 200+ brands nearly 65 million visitors a year, and an occupancy rate of 97%. In the first half of 2023, the number of visitors did not change compared to the same period in the previous year.
The company's goal is to improve results, and for that property management companies must keep adapting to changes, monitor buyer behaviors, and make a shift to experience-based shopping, since nowadays shopping centers are more than just a cluster of stores, they are experience centers, CPI Hungary notes in a press release sent to the Budapest Business Journal.
Exceeding Expectations
Approaching Q4 2023, CPI Hungary a brighter outlook than what the company predicted at the beginning of the year. While CPI been impacted by the recession, with partners are biding their time before concluding contracts, property management has not slowed down when it comes to renovations and promotions that attract visitors.
Attila Madler, CPI Hungary’s asset management director discussed expectations about the future, “While the annual inflation rate is expected to be high (18-19%) and service charges keep increasing, we concluded 16 new lease agreements and 83 agreements were renewed in Q1-3 2023, for a total of approx. 53,000 sqm. It is mostly large, international tenants that keep expanding, these include Sinsay, House, Cropp, New Yorker, Sports Direct, Tedi, and Flying Tiger. Currently, negotiations are underway for new lease agreements for about 3,500 sqm.
"It’s true for the whole retail market that small tenants’ confidence has fallen in recent years, and there is very little new demand for retail units with an area of 50-150 square meters. As a result of all these, tenants are much more cautious and prudent when negotiating lease agreements and about agreed terms,” he added.
