Starting signal for a new Semmelweis research center in a D-location – opportunity for private investors?
Normally when someone offers us an apartment in the outer areas of the 8th district, we turn them away. The reputation may be worse than reality, but the proximity to social housing, visible poverty and a still above-average proportion of people who do not strive for social norms, neighborly consideration and mutual respect ensure that investors, tourists and students avoid these areas.
I recently spoke to a developer who has built a beautiful residential project in this area, but is now realizing from the occupancy data that the situation is 'poisoned' and that it could be a very long time before the situation and with it profitability improve. The experience seems to underline the need for accompanying (or preceding) urban-sponsored development.
Research center meets D location
This makes an upcoming project by Semmelweis University in collaboration with the city administration all the more exciting to us: a large research center that is being built in a district that we would previously describe as a D-location.
The project certainly has what it takes to significantly and sustainably improve the attractiveness of this location within a few years and to attract an interesting target group of students, employees and visitors to the research center. The need for rental apartments and accommodation would increase, and it could also give rise to new shops and meeting places such as cafes.
Starting signal after years of negotiations
Since 2020, the municipality of Józsefváros has been negotiating with Semmelweis University about the sale of the land bounded by Kőris utca – Diószegi utca – Dugonics utca – Kálvária utca and the use of the land by the university. Last year, Semmelweis University purchased the affected properties from the municipality as part of negotiations.
The partnership between the university and the community aims to promote scientific and innovative developments that will advance the health and biotechnology industries of the country and region. The development plan also includes the design of the surrounding public spaces, taking into account feedback from the public to make possible changes.
Participation of residents desired
The new development of Semmelweis University will influence life in the district and change the architectural environment and everyday life of residents. There is currently an opportunity to change plans based on public feedback.
To this end, the Municipality of Józsefváros opened a public consultation on the new Semmelweis University Research Center, which will take place from June 19 to July 10, 2024.
Investing in the slipstream of the research center?
Since the groundbreaking hasn't even taken place yet, it currently remains very speculative if you want to invest in housing construction or renovation here. The location remains uninteresting for tourists and business travelers due to the distance to the city's attractions and the metro, and it is still completely unclear when lecturers and research staff will appear as tenants. Until then, rental prices will be modest.
Nevertheless, due to the currently low prices per square meter, the bet on drastically rising prices within the next 5 years could pay off. You should definitely have an investment horizon of 5-10 years and not be fixated on immediate cash flow. This may already be the case, but a significant boost will only be noticed as the building nears completion.
And until that happens, a lot of water will still flow down the Danube.
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PS: If you are interested in investing in Budapest, get in touch here. We are not brokers, we advise buyers: we look for opportunities in the Budapest real estate market that fit your ideas and budget, and we ensure that you generate income without having to worry about it on site.
