Local services
Debrecen has become the new economic centre of Hungary and Central Europe in the past 10 years.
This process has transformed the city’s real estate market and housing conditions, requiring both the local government and the city administration to take a proactive approach.
The city administration of Debrecen coordinates urban development processes along well-considered, long-term strategies. That is why they have launched planning for the comprehensive transport and water infrastructure development of the city’s eastern part, established new kindergartens and nurseries in the affected parts of the city, and are implementing large-scale transport developments. They also support real estate developments with regulatory tools, thanks to which housing construction occurs in many parts of the city.
One condition for a positive change in the housing market processes in Debrecen is the significant strengthening of the supply side. This is one of the most important tasks now, simply because the steady economic growth of the past 10 years, due to the pandemic, the energy crisis, and high interest rates caused by inflation, has not been followed by a corresponding increase in the number of new homes.
Therefore, based on the commitment made at the beginning of the 2024-2029 municipal term, the local government, together with Debreceni Vagyonkezelő Zrt. (Debrecen Asset Management Ltd., DV for short), is announcing a large-scale housing construction programme, thus opening a new era in home creation.
I.
TÓCÓVÖLGY REAL ESTATE DEVELOPMENT
A critical decision point in this programme is whether the local government and Vagyonkezelő can implement such a programme independently, with their investment. Given the current financial and economic trends, the answer is that this is impossible, except by involving entrepreneurial capital.
To achieve the desired goals, DV is announcing a public sales tender for constructing the prepared Tócóvölgy residential park. To prepare the investment to be implemented in Tócóvölgy, DV has developed a 10-hectare development area consisting of 7 plots.
The building intensity of the Tócóvölgy development is lower than the current building intensity in Tócóvölgy. The apartments are being built near an 11-hectare park, with an independent transport system independent of Tócóvölgy. In this way, they provide a modern, livable, green environment for those who intend to settle here, based on, among other things, the existing, excellent institutional infrastructure, such as the new Tócóvölgy kindergarten and nursery school.
In recent years, Debrecen’s housing construction market has been characterised by balance, and with the current investment, it strengthens its regional leading position in real estate development.
An essential feature of the tender is that the winning bidder must make a significant public development contribution. On the one hand, it must construct the collector road and the internal road network of the development area. It can also contribute to the construction costs of the park on the development area’s southern side. The collector road, the section within the development area, must be given to the local government for use free of charge after its completion, which is part of the new access road connecting Kishegyesi Street with Vincellér Street. This means that the new Tócóvölgy real estate development will not burden the existing Tócóvölgy residential area and Tócóskert in terms of transport. DV and Tócóvölgy Fejlesztő Kft. (Tócóvölgy Development Ltd.) are announcing a two-round tender for the sale of the properties and the related plans. The Holding is primarily expecting applications from large investors for the sales tender, as the total development requires a value of more than HUF 10 billion.
Main aspects of the tender process:
1. Open, two-round procedure: In the first round, bidders submit their tenders, after which the list of participants in the second (bid) round is determined. The minimum purchase price is HUF 5.9 billion.
2. Online bidding: In the second round, online bidding will use special software. The planned duration of the bid is one hour, but it will be automatically extended if certain conditions are met.
3. Evaluation criteria: The financial stability of the bidders, offers above the minimum purchase price, and the amount of public development contribution that the municipality will use for the construction of the public park within the framework of the Tócóvölgy environmental renewal programme are taken into account during the tender evaluation.
4. Commitments: The developer will have three calendar years to begin construction, and as a commitment, the city administration also requires the construction of the main road and associated utilities in the development area by June 30, 2028. As security for this commitment, the bidder must provide a bank guarantee.
5. Timeline of the tender: DV is waiting for the bidders’ applications and the acceptance of the prescribed sales criteria until June 30, 2025. The bid is expected to take place on July 8. DV will announce the bidders’ orders.
6. Contract conclusion: DV and Tócóvölgy Kft. will conclude a purchase and sale contract with the winning bidder to transfer ownership of the properties and plans. The planned conclusion date is September 15, 2025.
II.
ECOPARK
The Tócóvölgy real estate development is being created in a truly green environment, next to an 11-hectare eco-park along the Tócó stream. The central element of the development area, which also achieves ecological goals, is a 3-hectare lake system with a rainwater reservoir function but a continuous water supply via the Tócó stream, complemented by 8 hectares of green space and leisure and recreational developments. The development is part of the water ring around the city and is implemented within the framework of Civaqua II.
III.
DERÉK STREET REAL ESTATE DEVELOPMENT
DV will use part of the revenue from selling real estate in Tócóvölgy for its operations, and the other for residential real estate development.
On Derék Street, DV plans to develop an apartment building with approximately 200 apartments on a 1.1-hectare site with the involvement of professional and financial investors. DV intends to use 80-100 apartments from the development to improve the city’s housing stock quality through Cívis Ház Zrt. These will be made available to young people working in Debrecen through the Főnix Housing Programme, supported by the municipality.
The Derék Street development could be a pilot project for DV, which is owned by the municipality. DV still has several development areas where the number of rental apartments remaining in municipal ownership can be further increased.
Source and photo credit:debrecen.hu
