Of particular interest in the Budapest property market right now is the 9^th district of the city. Development there has been quiet, yet constant, for several years but it really has exploded recently. In fact the hitherto semi-derelict area of the Danube riverside between the Lágymányosi Bridge and Petofi bridge is now beginning to finally fulfil its undisputed potential as a centre of premium residential and commercial Budapest property.

 

Walking through the 9th district recently, the main thing that struck me is the sheer pace of development, particularly around Boraross Square and alongside the Soroksári Út corridor that runs parallel to the Danube. Commercial and residential property is springing up at a mind-boggling rate in this area, and it looks like the government’s long-term plan of stimulating the area by building its new National Theatre and the Palace of Arts here in 2002 is now bearing fruit.

 

The Millennium City Centre is the most obvious example of the district’s regeneration. This huge development, which is being built by regional construction giant TriGránit, started with the construction of the Millennium Tower I in May 2006. This is 70% occupied by Vodafone, and is simply known to Budapesters as ‘the Vodafone building’ these days. Clearly, new residential developments nearby, and of course existing property near the office centre, are in increasing demand from Vodafone employees, meaning that a buoyant rental market is also developing in the 9^th.

 

Furthermore, by Spring of 2008, TriGránit will add even more premium office space to the Budapest property scene, with the construction of Millennium Tower II and III. Together, these developments will see the construction of 29, 000 square meters of brand new office space. In addition, construction of Millennium Gate is underway, which will become the new home of the prestigious Central European University’s (CEU) Business School, as well as offering a further 13,000 square meters of retail space.

 

Finally, the TriGránit is also constructing a residential project within the larger Millennium project. This will see an investment of over HUF 10 billion (EUR 40million) in brand new luxury residential Budapest property. In its sales pitch TriGránit claims that this is the last piece of undeveloped land on the Pest riverside that gives a view of Buda, the castle district and Gellert hill, and it is certainly not an empty claim.

 

So, what was once an area you would simply drive through and wonder why nothing was being built on such a central and well appointed area of the city has, in the space of five short years, become one of the most dynamically developing areas of the Budapest property market. International finance giants Morgan Stanley and AIG have joined Vodafone as tenants and factor in the simple fact that people increasingly choose to live near their place of work, in addition to the effect that the CEU business school will have on the area, means that the riverside of the 9^th district is looking like one of the most potentially profitable areas to invest in Budapest property. If you’d told me this in 1999, I would probably not have believed it, but it’s happening right now, and further proof that big business has massive faith in, and continues to invest heavily in, Budapest property

 

 

9^th district a prize pick for Budapest property investors [part II]  

 

 

In my last article on Budapest property, I focused on the regeneration of the Danube riverside in the city’s 9^th district as a potential hotspot for Budapest property investors. But, as I alluded to in that article, it’s not just the new builds and office developments lining the quayside that are of interest in this inner city area. Indeed, the whole of the 9^th district is ‘work in progress’ and as such offers superb value for money to investors looking for an affordable way in to the Budapest property market. 

The area of the 9^th district east of the Grand Boulevard running from Ferenc körút to the Lágymányosi Bridge, and running parallel with Ülloi út, one of the city’s main arterial roads and the expressway to Hungary’s main international airport, was for much of the 20^th century, dominated by industry.
As this sector slowly moved out of the city and the urban economy shifted towards the service sector, the result was that during the late 1980s and much of the 1990s this area of the 9^th was characterised by empty plots and small-disused factories lining deserted back streets.  

But, international and domestic property developers have been quick to realise the enormous potential of this district, not least as it is a stone’s throw from the CBD, and available at a marked discount to other more fashionable areas of the city. Stir in the fact that two of Budapest’s main universities are situated in the area – the world Famous Semmelweis Medical School, and the equally renowned Corvinus School of Economics – in addition to a forward thinking district council and mayor, and all the factors necessary for regeneration have come into rapid alignment in the 9^th district.  

So what does this mean for the Budapest property market? Simply that would be investors in Budapest property now have more choice, and affordable choice, in a hitherto neglected area of central Budapest. Indeed throughout the 9^th district, investment capital has piled in at a rapid rate. The most obvious beneficiary of this trend has been the area around Kálvin Square – currently a huge building site as the interchange for the new fourth metro line, scheduled for completion in 2010, is constructed – and the pedestrianised Ráday utca.  

Once a scruffy city centre street, snarled up with traffic, Ráday utca is now lined with new bars, shops and street cafes and restaurants, and practically all of its 19^th century buildings have been restored to their former glory. Less obvious to the casual Budapest property observer is the regeneration and gentrification further into the 9^th. Indeed, the area around Tüzoltó utca has been transformed from a blighted postindustrial landscape into one of the most bustling ‘new’ neighbourhoods in the city. New and restored residential property dominates, with pedestrianised walkways, newly constructed parks and squares, and it is an area of the city increasingly popular with young professionals and students.  

For investors in Budapest property, I believe the 9^th district represents some of the best value real estate in the city, whether as a place to live, or, owing to the increasing demand for housing in this area, an ideal place for the buy-to-let market. In addition, thanks to the universities, both of which have a very high number of foreign students, there is also a buoyant short term let market in the district. Furthermore, as a quick walk round the area will show any potential Budapest property investor, the development is far from over, with new builds and regeneration projects currently underway throughout the district.