OTP Group sets up Hungarian agency

In one sense, its foray into real estate agency is not particularly surprising as the bank is, through its subsidiaries, already involved in activities as diverse as fund management and car leasing. The real estate agency arm of OTP Ingatlanpont was officially established in December 2011. Led by György Kosztolánczy, the subsidiary intends to become one of the three biggest property brokers in terms of transaction numbers by the first half of 2013. How does it intend to achieve this? Well, part of the answer is that it is going to pay for it. "We want to build aggressively and fast. We are prepared to pay for expansion in the beginning," explains Ivan Tettamanti, the head of sales of residential projects. "As a new player we know we have to pay an attractive package to attract people," but he also stresses that "we are not just paying whatever it costs." Not only is the company prepared to pay slightly more to attract the people it needs, but it is also prepared to pay for their professional training and qualifications. The reasons for OTP's move into real estate were twofold: firstly the bank set up the division in order to support OTP Ingatlan, its development unit, but secondly the move can also be understood as a reaction to the credit crunch. OTP was one of the largest mortgage lenders, issuing a significant percentage of the residential mortgages in Hungary. "With its new service OTP offers a huge help to those owners who, due to financial concerns, decide to sell their apartments. We can sell the property at the market price and everyone can close the book in a better way," explains Mr Tettamanti. Both of these factors also result in OTP Ingatlanpont having exclusivity on the properties that it sells, which it sees as a key advantage.
In Hungary, real estate brokerage tends to be a fragmented market dominated by franchise operations. Many operators are afraid of advertising the properties in their portfolios, knowing that they may easily be cut out of the transaction. OTP Ingatlanpont is different. It is a centralised operation with centralised marketing. Because it holds exclusive rights to its portfolio, it can advertise its properties with the exact addresses and photographs, safe in the knowledge that no one can steal them from it. Currently OTP Ingatlanpont has 20 offices across the country (and hopes to open more as soon as possible), but it can also make contact with potential clients through OTP's 400 bank branches (OTP Bank also has around 3 mln customers). The opportunities for cross-selling are obvious. Customers are not only offered new homes but also mortgages. Whereas properties that come into the portfolio can receive an immediate valuation (which the bank will accept as valid for a period of one year) and may immediately be issued with an energy consumption certificate (a requirement for properties being bought, sold or leased in Hungary). However, the very fact that a large proportion of the properties in OTP Ingatlanpont's offer comprise the homes of those unable to continue paying mortgage instalments is indicative of the fact that the Hungarian residential market is in a poor state. However: "The market is not expected to go any lower," claims Mr Tettamanti, who then points out that in parts of Budapest prices have even started to rise slightly. The company's ambitions do not end with residential properties. Within the next six months the company hopes to move into the commercial market too.