Union Investment acquires Krisztina Palace development in Budapest

German investor Union Investment Real Estate has acquired the Krisztina Palace development in Budapest, Hungary for an investment of EUR 60mln. Union Investment purchased the development for its UniImmo: Global fund, which is making its first investment in Central and Eastern Europe with this transaction. The developer and vendor of the project is the Hungarian branch of European real estate developer Codic International in a joint venture with Blum Holding, a sister company of Germany’s Terrafinanz.

Real estate consultancies Cushman & Wakefield and Jones Lang LaSalle advised on the forward funding of the Krisztina Palace development on behalf of Codic Hungary Real Estate development. They are also co-exclusive leasing agents for the development.

The Krisztina Palace project is situated in a central location on the Buda side of the Danube River that divides Budapest in two. Scheduled to open in June 2009, the development will comprise some 18,000 m² of Class A rental space.

‘This is a significant deal not least being a forward funding structure for a sizeable office development concluded at the time of a considerable turmoil in the property markets,’ commented Charles Taylor, managing director at Cushman & Wakefield Budapest, Hungary. ‘It is also the first major deal concluded in Budapest this year. The development has strong investment credentials and is anticipated to lease quickly which clearly appealed to a long-term property investor such as Union Investment.’

Union Investment first entered the Hungarian market in 2005 by acquiring three minority stakes in office and logistics properties for another fund, its open-ended real estate fund UniImmo: Europa.