Schoenherr Hungary’s Head of Real Estate Laszlo Krupl interviews HB Reavis Country Legal Director Viktor Fonth.
Krupl: Please tell us about your legal background leading to HB Reavis.
Fonth: I studied law at ELTE Law School in Budapest from 1993 to 1998. After an MBA in finance and management, my professional career started at PSZAF – the Hungarian Financial Supervisory Authority. Between 2000 and 2007, I was in-house counsel at Corvinus International Investment Ltd., a company directing the foreign capital investments of Hungarian companies. Since 2007, I have been the in-house legal counsel at HB Reavis, and, when the team expanded, I became responsible for leading the local legal team. Between 2014 and 2017, during the group’s planned expansion in Turkey, I was also responsible for the legal agenda of this country, mapping the local legal environment, supporting project preparation, and having regular contact with our local colleagues and Turkish legal advisors.
Krupl: What does HB Reavis do, and how large is the company in Hungary and around the world?
Fonth: There are over 700 HB Reavis employees across Europe. We are active in the CEE region, Germany, and the UK. Although we delivered more than 1.3 million square meters in several real estate subsectors, HB Reavis is not only a simple real estate developer but rather a creative and flexible workspace provider. With this approach, we believe we have been pioneers on the newest trends on the office market and provide our clients with a comprehensive service that helps them to adapt to the needs of their employees. We also offer an international co-working platform, flexible leases, and strategic workspace consultancy.
Krupl: Why did you decide to join HB Reavis?
Fonth: At Corvinus International Investment Ltd. we supported Hungarian companies in their investments outside Hungary and thus could work in an international environment and had insight into various asset classes. We invested as a minority owner in several projects with a buy-out obligation of our Hungarian partner, collectively being majority shareholders in the target companies. The most interesting investments were our hotel investments in Sovata, Romania, and Herceg Novi, Montenegro, but we also had a sawmill and a dairy factory in Slovakia and a bread factory in Bucharest. At that time real estate became more and more prestigious as an investment tool. This and the possibility to continue to work in an international environment were the reasons I joined HB Reavis in 2007.
Krupl: That was around 14 years ago and during the financial crisis in 2008 – 2009.
Fonth: At that time, we had more than 10 projects on our radar in Hungary at various preparatory stages, 2 projects just before or very close to signing. From the first signs of the financial crisis in 2009, the real estate industry and, of course, the whole world slowed down and, from that moment, unfortunately, there were no (new) projects for a while. Honestly, at that time, I felt that only a car dealership or hotel would be worse than working in the real estate sector. During the crisis, many real estate developers exited the Hungarian market. Luckily, HB Reavis was dedicated to continuing its operations in the country. In 2014 the Vaci Corner Offices project was sold off to Zeus Capital Management with very high occupancy. Since then, we have experienced a great level of uplift.
Krupl: Which one was the HB Reavis projects that you are proudest of?
Fonth: Besides our first real estate development project, the above-mentioned Vaci Corner Offices, the winner for me is undoubtedly our Agora Budapest project. This project (winning, alongside a number of other awards, the Planned Project of the Year - Commercial and Community Space of the Year awards at the Office of the Year 2017 competition, and designed as a WELL Gold, BREEAM Outstanding, and BREEAM Communities standard development) is a truly new business and lifestyle hub in the heart of the Vaci ut office corridor.
Size indeed matters, so my second candidate would be our unique project in central Warsaw –Varso Place – which is the tallest building in the EU.
London always had and has a special place in my heart so as a bronze medallist I would mention the One Waterloo building. This project is one of this amazing capital’s most important redevelopment projects and it is also the fourth and largest investment of our group in London to date.
Krupl: As a real estate developer, HB Reavis is active in the office and retail sectors. Do you see any new trends in these sectors?
Fonth: The COVID-19 pandemic undoubtedly affected the entire Hungarian real estate sector with significantly different consequences on the different products classes and market players. Currently, industrial and logistics properties seem to be more in the focus, as I see it there is a clearly increasing appetite for both “big boxes” and city logistics products.
Office space demand seems to be recovering with an increase in occupier activity, with flexibility and client-focus gaining importance in leasing decisions. The new ways or “standards” on hybrid working are still under formalization for most tenants.
By now most retail units have reopened under a regular regime, there is a big question mark in connection with fourth and potentially upcoming pandemic waves. In general, retailers are still trying to save and operate their pre-COVID business with lessors trying “to trim and not slaughter the sheep,” i.e. in selected cases with accepting reasonable (temporary) compromises on lease conditions vis-a-vis cooperative tenants.
Krupl: What are the pros and cons of going in-house rather than staying at an international law firm?
Fonth: Throughout my career, I worked with numerous attorneys from international law firms. An international law firm gives you a deep knowledge of the law and teaches you how to think systematically and work long hours. This attitude can be a great asset for working in-house. Still, I prefer in-house. Although you are not able to discuss each legal question internally, you are on the front lines and can't be any closer to the business.
Krupl: What are your roles both locally and on the group level? Describe your management style.
Fonth: Being in-house at HB Reavis I head a team of four. I think I've built up an effective collaboration within our local legal team as well as the other workstreams. Since I have been with the firm for over 14 years, this enables me to oversee its entire organization. The best thing about being in-house is the involvement in each development cycle.
Krupl: How did and does COVID-19 affect you in terms of workload and work-life balance?
Fonth: Workload? In a nutshell and without complaining: a significant increase. Besides the daily tasks related to the completion and commercialization of our two offices buildings (the Agora Tower and Agora Hub) especially during COVID-19-times, I was also trying to provide up-to-date and (on best effort basis) proactive help to the team in legal relations of the pandemic (legal updates on restrictions, legal reports, authority relations, compliance (GDPR), etc.). The increase was also partly due to the unexpected relationship management with (mostly) retail tenants (lease renegotiations, discount structures, partner correspondence, and eventual terminations) that was unthinkable before COVID-19.
In connection with work-life balance: it’s hard to imagine a greater boon for the usually introverted lawyers than a sublimely undistracted home office. However, if the employee does not interpret this as extra leave, after a year and a half working on average 20-30% longer hours per day without travel time and social contacts; also, even in a lucky situation (without the daily need of home practices related to digital education of one’s kids) was at the end very difficult to sustain.
Krupl: Who was most important in mentoring you in your career and what did you learn from that person?
Fonth: Unfortunately, or fortunately, throughout my career, I have had to work more as an independent lawyer, for a long time without a legal team and a real dedicated mentor. It has been a rewarding task to gain respect as a sole practitioner and to develop a smooth day-to-day workflow in workplaces where all my colleagues were and are business managers, engineers, construction specialists, finance experts, etc. Fortunately, as I mentioned above, I have had the opportunity to work with agile lawyers, partners in international law firms, and also heads of legal within the group where I have always had the opportunity to discuss legal issues at a high professional level.
Krupl: What are your other fields of interest besides law. What do you do outside work?
Fonth: To be honest, when I was at university, I wasn’t sure about becoming a lawyer as I had various other interests: writing poetry and prose, amateur filmmaking, acting in our university theatre group Biztos Bukas (in English: Certain Downfall). For a couple of years, I was the art director of the University Theater (in Hungarian: Egyetemi Szinpad). As to amateur filmmaking, we even won the main prize at the 42nd Hungarian Independent Video and Film Festival in 1995. I regularly published articles in the university journal and had a rap band (where, as one of the soloists, I was responsible for the lyrics and choreography as well) that performed some concerts at university.
Those all have now been partially replaced by parenting, reading, a never-ending love for films and theatre, and following political talk shows. When I am invited, I am happy to present or be a panelist in (legal) conferences partly in connection with the purpose and challenges related to an in-house position and AI in law. When traveling in the car – if I can – I listen to Hungarian and foreign stand-up performers.
