Hungary's Green Real Estate Sector, the Challenges Facing Market Participants, and the Importance of Sustainability Consulting – An Interview with Gábor Szarvas, Outgoing President of HuGBC

One of the key messages of Greenbors Consulting's second business breakfast was that green real estate is no longer merely a technical or certification issue, but also a business, financing, and risk management consideration. Based on this, how do you assess the Hungarian market?

Today, there are several different approaches to defining what constitutes a green building. International certification schemes coexist with the EU Taxonomy, while energy performance certificates, climate-focused assessment frameworks, and benchmarking solutions have also become increasingly important.

However, these assessment systems do not measure the same aspects of sustainability. This clearly demonstrates that the green real estate sector itself is continuously evolving. Within commercial real estate—particularly premium office buildings, shopping centres, and large-scale logistics developments—sustainability certification has become a fundamental expectation. Nevertheless, compared to Hungary's overall building stock, these properties still represent only a relatively small segment. In the residential sector, energy performance certification is by far the most common tool, while higher sustainability standards remain largely limited to new developments.

Does this make it more difficult to gain an accurate picture of the market?

Absolutely. One of the greatest challenges today is the lack of reliable data. Hungary has approximately 4–5 million buildings (although even this figure is uncertain), yet only around 500 have obtained some form of sustainability certification. This is far from sufficient to accurately assess the overall condition of the market.

We know considerably more about buildings certified under international schemes because these systems maintain publicly accessible databases containing information on certified assets and certification levels. By contrast, data on national energy performance ratings remain incomplete. This is particularly problematic in the context of the EU Taxonomy, where one of the key eligibility criteria for existing buildings is whether the asset belongs to the top 15% of the national building stock in terms of energy performance. Determining this requires comprehensive knowledge of the entire building stock.

Greater transparency regarding the quality of the building stock would be valuable in itself. The more reliable data are available, the better informed decisions can be made regarding development, renovation, financing, and portfolio strategy.

Many people still equate a green building with obtaining a certification. Should this perception change?

Yes—and fortunately, it already is. A building does not become green simply because it has received a certification. Rather, it becomes green by continuously striving for higher levels of sustainability performance and by consistently improving its operational results.

This is why, within certification schemes such as BREEAM and LEED, achieving the highest rating levels has become increasingly important if a building is to be considered genuinely sustainable.

Furthermore, for newly constructed buildings, it is essential to recognise that the building's life cycle continues long after construction has been completed. Sustainability certification at project completion marks only the beginning of one of the most important phases from a sustainability perspective: building operation.

It is during day-to-day operation that a building's actual energy and water consumption become evident, emissions can be measured, necessary interventions identified, and operational performance continuously optimised. Certification remains an important milestone, but it cannot replace ongoing monitoring and improvement. This is why international tenants and investors increasingly seek not simply certified buildings, but high-performing assets whose sustainability performance is continuously documented and independently verified.

What are the main drivers shaping the market today?

Several factors are working simultaneously. EU regulations—including the EU Taxonomy and the Energy Performance of Buildings Directive (EPBD), with its objective of achieving a zero-emission building stock—are all pushing the market toward measurable and verifiable improvements in sustainability performance.

At the same time, tenants, investors, and lenders are becoming increasingly influential. Large corporations' ESG targets, carbon reduction commitments, and reporting obligations directly influence the types of buildings they choose to occupy. As a result, sustainability performance has become a matter of business competitiveness.

Financial institutions are also playing an increasingly significant role. Banks, investors, and insurers are paying closer attention to the long-term risks associated with buildings, including energy efficiency, regulatory compliance, and long-term economic viability.

What role does a consultancy such as Greenbors Consulting play in these market developments?

The primary role of a sustainability consultant is to make these expectations, risks, and opportunities understandable and manageable. Our objective is not to create alarming future scenarios but to help clients identify, at an early stage, the issues that deserve their attention.

For developers, owners, and investors, sustainability becomes truly relevant when its impact on asset value, leasing potential, financing opportunities, and operational costs becomes tangible. This is where we provide support through certification services, operational performance assessments, portfolio-level strategies, risk identification, and practical recommendations for improvement.

What kind of mindset shift is still needed?

Sustainability needs to be more closely connected to business value. Buildings with superior energy performance, efficient operations, and transparent documentation are fundamentally more competitive in the leasing market, more attractive to investors, and better prepared for future market and regulatory changes.

Predictability is equally important. Developers and property owners make decisions with long investment horizons, making stable and transparent regulatory, financing, and market conditions essential.

Education also remains a critical factor. Sustainability is no longer solely the responsibility of sustainability professionals—it now affects development, operations, financing, leasing, and corporate decision-making alike.

What has your presidency at HuGBC meant to you personally?

It has been an extremely valuable professional experience. It provided an opportunity to represent the cause of green building within a much broader professional and market environment. HuGBC brings together developers, consultants, designers, contractors, facility managers, manufacturers, and many other industry stakeholders, demonstrating just how multidisciplinary this field has become.

The continued development of the green real estate market requires a shared language, common standards, and continuous dialogue. This experience reinforced my belief that education, knowledge sharing, and professional collaboration will continue to play a vital role. Now that my presidential term has concluded, I intend to focus even more strongly on practical professional work—both as a sustainability consultant and as a member of HuGBC's working groups.

What would be your key message to the Hungarian real estate market for the coming years?

The organisations that will gain a competitive advantage are those that treat certification, data, building operations, and long-term performance as integral components of a single strategic process. We are already seeing pioneering organisations emerge within the Hungarian market, and their example is becoming one of the strongest driving forces behind the continued growth and maturity of the country's green real estate sector.