German investment manager Warburg-HIH Invest Real Estate has acquired a new office building in Budapest for an open-ended fund on behalf of an institutional investor.
Called the White House, the 22,300 m2 property was completed by developer GTC Group in the summer of 2018 and holds LEED Platinum certification.
The parties to the deal agreed not to disclose the purchase price.
The property is fully occupied, the main tenants being investment fund manager BlackRock, Jaguar Land Rover and Dutch co-working provider Spaces.
‘With this acquisition, we transacted a property investment that is sustainable in every way,’ said Matthias Brodesser, head of Transaction Management International at Warburg-HIH Invest. ‘Since 2010, Hungary’s economic output has grown at a stable annual rate of 2.25 percent while wage increases combine with virtually full employment. In addition to the positive economic aspects, the high environmental compatibility of the property has been verified by its LEED certification.’
Brodesser said the deal illustrated how institutional investors from Germany are currently exploiting opportunities in order to boost overall portfolio returns. ‘At the moment, they are hunting for properties especially in Poland but also in Hungary,’ he noted. ‘Inversely, major international property developers are putting properties on the market. These companies, some of them listed, build on speculation and thereby create great options for buying into a given project as soon as its properties show a sufficient pre-let ratio.’
The GTC White House is located in the office submarket along the Váci Ut corridor in the 13th district of the Hungarian capital. ‘Due to its background as a 20th-century industrial centre and the convenient transport links to the inner city, the area has developed into a preferred location for office tenants,’ said Sebastian Pende, real estate manager at Warburg-HIH Invest Austria. ‘Average office rents in this area, which is marked by brisk building activity and robust take-up, are growing by 2.8% annually.’
Warburg-HIH Invest currently has €8.8 bn worth of assets under management on behalf of around 150 institutional clients.