Interview with Tomasz Lisiecki, CEO, TriGranit

12 Jun Interview with Tomasz Lisiecki, CEO, TriGranit

From your experience in Europe, how is the sector performing in Hungary? What are the major trends and growth opportunities?

We are based in Central Eastern Europe, with our HQ in Hungary, and we have worked in Poland, Romania and Croatia. Poland tends to attract the most attention due to its size and liquidity, often serving as the entry point for Western investors. Hungary, the Czech Republic and Slovakia are typically considered secondary. Interestingly, before COVID-19, we saw the reverse — Hungarian investors expanding into Poland, as we did in 2004. Today, real estate sentiment is improving across the region, helped by falling interest rates. Hungary, for example, saw around €400 million in transactions in 2024, with expectations of growth ahead. Poland’s real estate market is much larger — projected to reach €5 billion in 2025 — while Hungary is expected to climb toward €1 billion, a notable improvement.

Liquidity is improving, but major global investors like US private equity funds are still focused on Western Europe. Central Eastern Europe, including Hungary, is seen as more opportunistic mainly due to lower liquidity and a war at our doorstep — not political or legal risks. As a German investor once told me, our region is like Mexico to the US — a cost-effective base for Western companies. Interestingly, some of our strongest development years were during financial crises, when companies sought cost savings and expanded here as a result.

Can you share TriGranit’s history, growth, current structure and main priorities under new leadership?

We are a strong example of how a company can grow in an emerging market. TriGranit was founded in 1995 by Hungarian entrepreneur Sándor Demján and Canadian-Hungarian businessman Peter Munk, who brought North American expertise and capital. In the mid-1990s, the European Bank for Reconstruction and Development joined as a shareholder, adding institutional credibility and helping us partner with major Western banks. Their model was to support firms until they could stand on their own and here we are, 30 years later, still going strong and active across multiple countries.

We started by bringing the Canadian shopping center model to Eastern Europe, focusing on mixed-use developments anchored by malls near major transport hubs, like Westend City Center in Budapest. As markets matured and shopping center demand declined, we shifted toward standalone office and residential projects. In 2015, our founders sold the company to US-based TPG Real Estate, marking a major shift from family ownership to institutional private equity. That transition gave us valuable experience working with global investment structures.

Since then, we have continued evolving and today TriGranit is often approached for partnerships, acquisitions or joint ventures across Central Eastern Europe, making us a solid indicator of real estate trends in the region.

What are your current key objectives and priorities?

We are now owned by a Czech fund, marking a return to local ownership. In today’s geopolitical climate, especially with the war nearby, this is a significant advantage. Local capital is more comfortable investing in cities like Budapest or Warsaw, unlike more cautious investors from places like New York. For the first time in our history, we are focusing more on acquisitions than development. With high inflation, interest rates and weaker occupancy, development margins are tight. Instead, we are buying existing assets below replacement cost and using our expertise to upgrade and reposition them — something we have already done in Warsaw and are now exploring in Budapest. It’s a major strategic shift for us.

What are some of TriGranit’s most successful recent projects?

Our most meaningful and successful projects have been large-scale developments — shopping centers and mixed-use complexes that transform communities and take years to complete. One example is Bonarka in Krakow, which includes one of Poland’s largest malls, eight office buildings and residential areas. We developed it over 20 years and remain involved through leasing and refurbishment of the offices, even after selling the entire project.

Another highlight is Silesia City Center in Katowice — our first project in Poland. Now owned by NEPI Rockcastle, it remains one of the country’s top-performing malls, attracting both top investors and tenants. Seeing these assets continue to thrive is something we’re very proud of. Our latest project is the A+ category Millennium Gardens in Budapest, part of the extensive Millennium City Center district rehabilitation project which started in the early 2000s.  This last building was completed in two phases between 2022 and 2024. Millennium Gardens is owned by Revetas Capital, former owner of TriGranit, and a pioneer in CEE real estate investments.

Do you plan to expand your footprint in Central and Eastern Europe, geographically or by sector?

In a low-liquidity environment, it’s important to position yourself as attractive to investors. While markets like Germany or the UK are obvious targets, we have never been active there. Instead, we have chosen to continue focusing on Central Eastern Europe — our home market and nearby countries — where we now see more opportunities than ever. These markets may be less liquid but offer strong potential, especially compared to highly liquid regions like Germany at its peak.

We are now looking at Southern Europe, particularly the Balkans — places like Serbia, North Macedonia and Albania. Our success over the past 30 years came from being first movers, developing landmark projects with strong local partners. Instead of following the crowd, we are returning to that model. We are exploring project-driven opportunities, not speculative expansions. We have previously built a major mall and a sports arena in Zagreb and are reactivating relationships there. In Belgrade, the residential market is strong and the office market has low vacancy, unlike Warsaw or Budapest. While exits to large funds may be limited, we’re comfortable holding assets longer, especially with local ownership.

How does your company approach ESG and digitalization trends?

That is a question we often ask ourselves without a clear answer. At real estate conferences, people debate how the industry will address airborne health threats. During COVID-19, some ideas were quite extreme like an elevator system that limited weight to control the number of passengers, which raised obvious practical issues. Similar unrealistic ideas pop up around AI, which is normal with new tech. However, there is growing consensus on AI’s impact on operational costs and energy efficiency — customized lighting and energy use can significantly reduce expenses. AI is also transforming design: it can detect clashes between electricians, plumbers and engineers, cutting design costs dramatically. For example, I can now generate concept designs in minutes using AI prompts, something that used to take architects days or weeks.

We are still figuring out how to integrate AI into daily operations. What it means for architects and engineers isn’t clear yet. It’s more than just ChatGPT; AI is having a big impact, but how it will affect design responsibility and legal liability remains uncertain. Architects are legally responsible for their designs — will they accept that if AI handles much of the work? On the tenant side, occupancy dropped after COVID-19 due to space and remote work concerns. Though the health fears have eased, occupancy hasn’t bounced back, partly because AI is changing work patterns and reducing jobs. We see this impact with our clients too.

What is your vision for the company’s growth over the next 3–5 years and what flagship projects will you focus on?

Central Eastern Europe, especially Hungary, is our home. We are committed to growing here as a platform for institutional investors focused on meaningful, sustainable developments that positively impact communities. This mission has driven our success for 30 years. Today’s environment is dynamic, shaped by AI, post-COVID-19 effects, geopolitics and the war nearby. For the first time in modern history, Eastern European countries like Poland, Czechia and Hungary have become net importers of people instead of exporters. We are seeing newcomers arriving, which is changing politics and creating new challenges for developers.

For the first time in years, Eastern Europe faces a housing shortage, not just quality issues. Historically, countries like Poland rebuilt after WWII with mass housing blocks, so shortage wasn’t a problem, just quality. Now, with immigration rising, partly due to the war nearby, this is changing. We are not primarily residential developers, but we are exploring opportunities in that area. What seemed temporary is proving more long-term, especially in safe, welcoming places like Hungary. Younger generations are renting more, shifting from a culture of ownership. This is creating a new institutional rental market, an asset class we want to enter.

The boom in logistics and manufacturing in Eastern Europe also opened new doors. We are developing our first logistics project in Poland near our offices, driven by tenant demand. Overall, political and social shifts once thought of as temporary are deeply impacting real estate. We want to be part of this evolving market.

Why is now the right time to invest in Hungary and why choose TriGranit as a partner?

We have a strong track record and an experienced local team — real estate is fundamentally local. While we currently have projects in two countries, we have developed across the region. Hungary, especially Budapest, has been a top location since the mid-90s and early 2000s, attracting many global companies before they expanded to Warsaw, Slovakia or Prague. Budapest’s location is ideal — just a 2.5-hour drive to Vienna — and it draws a diverse international workforce. Our developments like Millennium Towers and Gardens host people speaking 20-30 languages. Recruiting foreign talent is easy here. For example, Chinese company BYD is moving its European HQ to Budapest with plans for 5,000 employees. They confirm there is no recruitment issue. The key to business success today is access to talent, not just costs. Hungary offers that — both local and international talent — making it attractive for our global tenants.

Can you share your experiences and what gives you the most pride leading the company?

I have been with TriGranit for over 20 years. I started as an analyst in 2004 and gradually moved up through roles like project manager, development director, head of development and CEO. After a few years away working in the Nordics, I returned as CEO in 2019 at the request of new owners. In August 2024, the company was acquired by DRFG Investment Group.