M7 Real Estate has invested €12.4m to buy a multi-tenanted office asset in Budapest, Hungary for its M7 CEREF II fund and has also agreed a €56.7m loan facility for the office and logistics fund.

The acquired 7,066sqm property is 91% let to nine tenants, M7 said, adding that the deal is the second acquisition made for the fund which is now 30% invested. The fund bought a 12,672sqm multi-tenanted office building in Poland in July.

M7 CEREF II targets value-add and core-plus properties in key Central European markets, including Croatia, Hungary and Poland. 

The manager said there is a secure pipeline of potential acquisitions, with further completions expected in the first quarter of 2021 moving the fund towards its €100m capital deployment target.

M7 said M7 CEREF II fund’s €56.7m loan facility was agreed on a five-year term with Erste Group.

Hugh Fraser, CEO M7 Capital said: “We have been developing our relationship with Erste Group over a number of years and we’re pleased to have concluded our first major financing with them, which we hope marks the formal start of a long term partnership across the region.”

Balazs Magyar, managing director, Hungary at M7 said: “Given the challenging market backdrop of the pandemic, we’re very pleased to have concluded this transaction efficiently which is testament to our relationships on the ground in Budapest.

“This is a strong addition to the M7 CEREF II portfolio and, with a healthy 8% office vacancy in the Hungarian capital, we are confident of being able to improve the rental profile and rent income of the building through a tailored asset management plan – in the same way as we did with the assets in our first fund, M7 CEREF I.”

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