Budapest Obuda island resort development to create major tourist and yachting centre

The Budapest Sun Online this week reported proof of Hungary’s ever growing stature as a tourist destination, with the news of four new airlines operating routes into Hungary. Atlanta-based Delta Airlines, will fly five times a week between Budapest Zrt and JFK Airport, New York, whilst Irish budget airline Ryanair has started three weekly flights to FlyBalaton airport at Sármellék, close to Lake Balaton and expects to carry some 40,000 passengers on the route in the first year of operations. May 1 saw Finnish scheduled airline Blue1 (owned by SAS Scandinavian Airlines) launch a thrice-weekly seasonal connection with Helsinki to Ferihegy. Finally, Czech airline Smart Wings, the republic’s first low cost airline, announced that it was planning flights from Budapest to Paris (seven times a week) and Rome, Milan and Prague (six times a week) however there is no fixed start date.

Tourism has been a major force in Hungary’s economy since 1990, 36.6 million people travelled to or via Hungary in 2004 when tourism revenues from international tourism increased fourfold to 961 million euros. Major tourist attractions include Budapest, the impressive River Danube, ancient cities and the holiday resorts and beaches of Lake Balaton (the largest lake in Central Europe) Hungary is also home over a thousand natural hot thermal springs, 150 of which have been tapped as hot-water spas offering thermal and therapeutic treatments. Hungary’s national parks also attract visitors offering a chance to see endangered species of flora and fauna.

Increased air travel to Budapest serves only to increase interest in Hungarian property investment opportunities which seem to get bigger and bolder. The Budapest city council recently gave its approval to a Ft 400 billion real estate development project on the southern tip of Óbudai Island, currently the home for an annual summer music festival. The pedestrian-only zone plans for this island in the centre of the Danube, include 8-10 hotels with 6,000 rooms and the development of 4 apart-hotel blocks to be complemented by recreation centres, a casino, concert halls and opera house, a 3,500-capacity convention centre, a yacht port and about 40,000 square meters of commercial space. The ambitious tourism venture is the brainchild of real estate entrepreneur Moti Zisser, who’s company, Elbit Medical Imaging owns 30% of the rights to the project through its subsidiary Dream Island 2004 Real Property Development Ltd. Purchased 3 years ago for just 9 million euros, the scheme will involve significant public works to strengthening embankments and excavating the palace of Roman Emperor Hadrian in the heart of Budapest’s 3rd district. Formal approval is expected to be granted, by the end of May 2006 and construction will start in 2007 with a project completion date of within five to seven years.

Acting through its Dutch subsidiary Plaza Centers (Europe) BV, the Group has become the leading developer of over 70 western style commercial and entertainment centres in central and eastern Europe. The Group’s activities in this arena commenced in Hungary, while several similar projects are under development in Poland, the Czech Republic, Romania, Greece, Slovakia and Slovenia.

British supermarket giant Tesco is planning massive expansion into Hungary, opening 25 new stores and 17 petrol stations creating over 2,500 new jobs. The Financial Times reported the number one Japanese investor in Hungary Suzuki is planning to increase it output to 300,00 units. In 2005, half of the 267,000 Suzukis sold in Europe were manufactured in Hungary (137,000 being Swift and Ignis models). The Auto firms continue to invest with two Japanese component makers moving into the industrial park west of Budapest.

All the signs are positive that Hungary and Budapest’s in particular, investment potential continues to grow in line with it’s imminent entry into euro in 2010.