“Our new concept makes sense because it’s based on three pillars that reinforce one another. If our office space has a high occupancy rate, then the retailers and food outlets are happy, just as they are when our parking facilities are full. The concept of many synergies is not just a possibility that sounds good in theory; it’s already working well in practice and going down well with our customers.” – Lurdy Ház Managing Director Stephan Szakal
After the change of regime Lurdy Ház was among the city’s most modern shopping centres. The German-owned mall is managed today by Stephan Szakal, a German, who is also in charge of the other four Hungarian activities of the Lurdy Group in Hungary. Lurdy Ház, which originally opened in autumn 1998 as a shopping centre and office building, today is also home to the city’s fourth-largest events centre.
What is distinctive about Lurdy Ház?
The combination of shopping centre, office building and conference centre makes us unique in Hungary. There is no other company that combines these three elements under one roof on this scale. We also offer excellent parking possibilities, both above ground and in our underground car park. Parking facilities are a real problem today for many office buildings. Either there are too few parking spaces or they are too expensive or, most frequently, both. The mix offered by us is particularly attractive to firms with a large number of employees and visitors who regularly require premises for training sessions and presentations. In addition Lurdy Ház houses a diverse food court and a wide range of services in the shopping area. From banks to a post office and copy shop, virtually all the external services can be found here that are needed for everyday office life. We also provide state-of-the-art IT infrastructure.
What about the location of Lurdy Ház?
Our location is also to our advantage. Liszt Ferenc Budapest Airport, Csepel free port and Budapest city centre can be accessed quickly from here, as can the M0, M5, M6 and M1/M7 motorways. We are also well situated in terms of public transport. We are just two tram stops away from the blue metro and we are located just a few minutes by foot from tramline 2, which goes to the city centre. It’s no coincidence that many commuters use our large above-ground car park, which is free, for park-and-ride purposes. We don’t mind because it’s likely that many of the people who park there drop into Lurdy Ház on the way home.
Was the business model based on these three pillars right from the start?
No, Lurdy Ház was originally a shopping centre primarily, with office space attached. Since there was a fairly considerable vacancy rate in the retail field over an extended period, the vacant space was bundled and alternative ways of using it were sought. The management, for example, experimented with using the vacant space for a poker club and a disco, as well as for trade events. Since the first such attempts in the events field were promising, a year and a half ago, when I began working for Lurdy Ház as managing director, the strategic decision was made to establish a modern conference centre there. At the same time we cleaned up our profile: the poker hall and the disco were closed for image reasons. The conference centre consisting of eight conference halls and a 4,000-square-metre exhibition space opened this spring. By the end of the year our events centre will gain an additional 700 square metres and will then occupy an area of almost 5,000 square metres. That will make us the fourth-largest events space provider in the city and capable of holding conferences for up to 3,000 people.
How is your office space doing?
It’s a sign of the success of our new strategy that we have managed to attract large customers such as the insurance firms Aegon and Astra and the IT company Externet. The German DIY store chain Obi has also decided to relocate its Hungarian head office to Lurdy Ház. All four of those clients chose Lurdy Ház not only because of our location and attractive square-metre prices of EUR 6 to 8, but also the excellent parking. Astra has also taken advantage of what Lurdy Ház has to offer by opening a service centre for its customers in the shopping area.
How high is your occupancy rate for office space?
Leaving out of consideration the space that is still being used by the Hungarian airline Malév until the end of the year while it is being wound up, currently around 62 per cent of our office space is occupied. Given our advantages I’m confident that we will continue to have an acceptable occupancy rate even after Malév has vacated. Essentially we come into consideration for all companies requiring space of at least 100 square metres. We’re in the fortunate situation of belonging to a foundation and not having to service any bank loans. That takes the pressure off us when looking for tenants.
Our tenants also benefit in the form of more favourable conditions. I’m confident that we can increasingly improve our occupancy rate in this field. It’s true that there’s considerable vacant space on the Budapest property market but there’s also an increasing number of cost-sensitive customers. That’s an opportunity for us. We offer not only an attractive range of facilities but also competitive square-metre prices. We’re interested in particular in customers whose rental agreements elsewhere are on the point of expiring and who are now looking for something similar under more favourable price conditions. Many customers are aware that if they don’t take advantage of the current low prices, then it will be too late because the prices will rise again. In that regard the current rather difficult economic times are grist to the mill for us.
How is the events field shaping up?
Things are also going well in this field. In total we have arranged almost 5,000 events so far. Recently a cat exhibition, an oldtimer show and a mineral water exhibition have been held at Lurdy Ház. Even now periods can be foreseen when we will be fully booked out, such as at the end of the year.
What is the ratio between the three pillars in terms of space?
We have 22,000 square metres of office space and roughly the same amount of retail space. Our conference centre will have an area of almost 5,000 square metres after we have added the former poker hall by the end of the year.
Do you have any plans to change that ratio?
No, not in the foreseeable future. Our success so far confirms that our new strategy involving a new distribution of the space is the right one. Our new concept makes sense because it’s based on three pillars that reinforce one another. If our office space has a high occupancy rate, then the retailers and food outlets are happy, just as they are when our parking facilities are full. The concept of many synergies is not just a possibility that sounds good in theory; it’s already working well in practice and going down well with our customers. Another reason why we don’t plan to make major changes to the current distribution of space is that the arrangement suits the layout of our building complex.
How high is the occupancy rate in the retail section?
Here we have a rate of around 90 to 95 per cent. Our marketing efforts are now aimed at achieving the same in the other two pillars.
What other activities is the Lurdy Group engaged in in Hungary?
We have two logistics centres, one in Soroksár and one in Albertfalva, as well as the “Berlin” and “Frankfurt” hotels in Budapest. Here too we benefit from certain synergies. Since both hotels are not far from Lurdy Ház, they can be used for the accommodation of external guests, enabling us to make our events packages even more attractive.
Where does the name Lurdy come from?
Lurdy is a made-up name. It would be interesting at some point to launch a competition to find out what visitors associate with the name.
The person
Stephan Szakal, 48, was born in Cologne. After graduating in business studies in Bielefeld, he earned his doctorate at Budapest University of Technology and Economics. He began his professional career at the German-Hungarian Chamber of Industry and Commerce, which he led as its second managing director from 1991 to 1997. He went on to work in executive positions for the Hungarian subsidiaries of the companies Zollner, Precision Controls, FAG and Floyd. Since the beginning of 2011 he has been managing director of Lurdy Ház and director of the Lurdy Group in Hungary. In the same year he married his Hungarian girlfriend after a decade together. Although his father was a Hungarian refugee following the 1956 Uprising, Szakal grew up speaking only German. He has since acquired an excellent command of Hungarian.
