Hungary could kill masterplan of Lidl, Spar
Permission required for every new retail unit
We have inquired at Szabolcs Perlaki, Partner at OPL in charge of the real estate department about the planned changes. He thinks the amendment proposal to the ‘plaza ban’ regulations could introduce a new kind of permission procedure for refurbishments that do not require building permits and which result in the creation of a retail unit (e.g. food store from warehouse) or in the conversion of an existing retail unit due to a profile change (e.g. food store from shoe store).According to the bill submitted for the 2019 budget, a permission must be obtained for the conversion of the intended use if the commercial purpose of an establishment of gross 400 square metres or over is to be changed or if the commercial establishment is to be reconstructed in accordance with the legislation.
As of 1 January 2015, building, expanding or refurbishing stores and malls beyond specific floor area was not banned. All that was required during the planning permission procedure was a permit by the head of the Hajdú-Bihar County Government Office who made his call in consideration of the preliminary opinion of the plaza ban committee. Under this rule, a permit was obligatory only in the case of constructions and refurbishments that needed building permits. Reconstructions and changing the purpose of the establishment, however, did not require a building permit, hence opening a new store in an existing building did not need a ‘plaza ban permit’.This “loophole" is to be resolved now, as the cabinet would link every reconstruction subject to a permit if it creates a new retail unit. Although the definition of reconstruction is yet to be hammered out, it is likely to include any scenario where one retail chain replaces another one on any given location, the expert added.
They can make it difficult to circumvent the plaza ban
The thing is that you can partly go around the plaza ban via different methods. You can see that discount chain stores opened a lot of units recently. Refurbishing an existing store is no magic, and that is where they want to tighten rules now
, an expert with knowledge of the retail sector’s operation told Portfolio on condition of anonymity."They cannot prevent expansion as such, but they can sure make it more difficult and that is what they could try to achieve now. It is unclear how “tough" this regulation will be, but it will certainly not be possible to convert a car mechanic shop into a retail store without a permission to change the purpose of the unit. It remains to be seen what would be done in the case of two units serving a similar purpose," the source added.
If they made regulation overly rigorous and if it explicitly targeted multinationals with the goal of impeding their expansion, it could be in conflict with EU rules, as well. Brussels monitors if a law is discriminatory and if it finds it is, it may open a proceeding against Hungary. If the belt is tightened too much, there is a chance of that happening now. Brussels has not stepped up against the plaza ban so far, but it also could be a concern now
, said the expert.
