Wigan Acquisitions has completed the purchase of a multi-let office building in central Budapest, taking the total capital deployed on behalf of its family office and private equity partners to €135 mln.
Austria House comprises 3,400 m2 GLA over ground level and 8 upper floors. There are also 41 underground parking spaces. The asset is situated close to major public transport hubs in a downtown area of Budapest’s historic centre.
The tenants include a number of international companies and there is some upside potential from the re-gearing of expiring leases, according to Budapest-based Wigan Acquisitions.
There is high tenant demand for locations in Budapest's CBD and this is being reflected by historically low vacancy level compared to other periphery districts.
Patrick Wigan, managing director of Wigan Acquisitions, commented: 'Given the prevailing global economic and political uncertainty, we understand that principal investors are increasingly targeting direct real estate across the CEE region with the support of experienced local partners as opposed to investing in more common ‘blind-pool’ real estate fund structures.
'With the successful closing of Austria House, with the support of our local due diligence team (including Ernst & Young Budapest for tax, financial, legal; and Sentient for technical DD), we’re proud to have supported our committed overseas co-investors. Our interests remain fully aligned to building out a portfolio of city centre located capital value appreciating assets offering significantly higher return prospects compared to Western Europe.'
Asset management platform
The acquisition follows Wigan’s launch of 'Ceresa' in 2017 as a bespoke asset management platform for its principal equity partners looking to invest in real estate across the CEE region.
The asset management platform’s main focus remains city centre direct real estate investments in locations offering sustainable cash-on-cash returns with value-add potential through proactive asset management initiatives. Compared to Western Europe and particularly the UK’s more subdued GDP growth, the economies of CEE-6 region recorded growth rates of 3% up to to 6% year-on-year, Wigan said.
The March edition of PropertyEU includes a report on our Europe and CEE real estate investment briefing held in Budapest on 1 February. Click here for the video highlights
In addition, PropertyEU and Colliers International are hosting a CEE Capital Flows briefing at Mipim in Cannes. The free event takes places on the Colliers Boat on 13 march between 12.45 and 14.00. Click here to register