Plaza Centers created the first shopping centre in Hungary, and even though you have sold all of them - 12 to the French, four to the English - you have changed Hungarian consumers' habits and weekends for ever . Perhaps no city has as many shopping centres as Budapest, and almost every major provincial city can lay claim to one or two such 'refuges'. Did you realise that shopping malls would prove such a success?

It wasn't hard to predict. It was just a question of time and a new political system - the shopping centre approach is popular all around the world. Duna Plaza was the first shopping centre in eastern Europe 12 years ago, and then the others followed, in Budapest and in the provinces. We've built malls in Poland and the Czech Republic, and we are working on a vast shopping and entertaining centre in Bucharest called Casa Radio. We've broadened our activities to the new members states - Romania and Bulgaria, and at the same time we are pouring more resources into building hotels and homes.

An important reason for our success was that we tried to be first movers. Speed wasn't everything: it would have been easy to fleece a naive foreign investor if we hadn't done our homework properly. In the mid-1990s, interest rates stood at 16 per cent, there were piles of regulation and red tape, and there were barely any foreign brands in the marketplace. Under those conditions, you could only invest if you had thorough knowledge of local peculiarities and the ability to adapt swiftly. Things are different in Hungary nowadays - you have European conditions, things are easier for businessmen. Of course, with lower risk levels, yields get smaller too: back then we could get returns of 22 or 23 per cent, now we have to be satisfied with something like 8 per cent.

I can't really feel sorry for you. It's far more worrying to hear that the malls are driving the smaller shops out of business. Not just in Budapest, but in other cities as well, once busy high streets are empty and shops are closing throughout entire districts.

It's not just the malls that are to blame. For one thing, most shopping centres were built on decaying industrial sites that needed urgent rehabilitation. We've spruced up all kinds of neighbourhoods, pushed up residential property values, improved entire districts. The other thing is that city centres are changing all around the world. Who ever decided that certain streets are sacred and that they should be reserved exclusively for trade? We have to rethink the role of city centres - maybe arts and galleries could take the place of shops in the centres of our towns.

What other plans does Plaza Centers have in Hungary?

We're building central and eastern Europe's biggest ever shopping and entertainment centre on Kerepesi ut, and we hope to open the E200m project by the end of the year. The Arena Plaza Mall will have more than 200 shops, a huge hypermarket, a 1000-seat conference centre, restaurants, a gallery exhibiting the works of young artists that will resemble the bazaar of Istanbul. There will be a 22-screen cinema and Hungary's first 3D IMax screen.

We're starting work on a sports, entertainment and free-time centre on Hajogyari Island, with a budget of E1.5bn. We have a 30 per cent stake in this project. In place of the old shipyard, we will build Europe's largest entertainment centre, with theatres, a casino, more than 6000 hotel rooms and a covered aquapark. We'd like the island to mean for Europeans what Las Vegas or Hawaii do to Americans. We want them to book a flight and spend a few days in Budapest for this one reason. We've completed the basic planning and secured planning permission. We're now working on construction plans. I'd add that we're spending E50m on renovating the Ballet School opposite the Opera. We're turning it into a 210-room hotel which will work in cooperation with the Opera.

Zsuzsa Shiri / Jerusalem