Fate of Hungary's plaza ban may be decided next year
The 'plaza ban' is a necessary and successful regulation. It has not impeded developments based on actual demand, while it did create an obstacle to uncontrolled investment projects, said Péter Cseresnyés, state secretary in charge of trade policy and consumer protection at the Ministry of Innovation and Technology.
In 2012, Hungary introduced a general ban on construction of all retail units with an area larger than 300 square metres, but a number of investors and business owners were given exemptions.
When justified, the committee in charge still stands behind new construction, expansion or refurbishment, which is attested by the fact that nine out of every application are approved. This regulation had to be put into effect due to the overbudgeted and unsustainable investment spree of the 2000's. The number of shopping malls rose to 114 from 45 between 2002 and 2010, while the portfolio was expanded by merely seven units in the eight years since then, added Cseresnyés.
He says that it is difficult to differentiate, even from a policy perspective, between investments that are really necessary and those that would lead to unused oversupply. The earliest possible date when the 'plaza ban' could be discussed, under the advisement of the affected parties, is next January.
