CA Immo is purchasing the Millennium Towers office complex in Budapest from Trigranit and Heitman for €175 mln.
The Class-A office complex, which is fully let with an occupancy level of 99.7%, hosts tenants including Vodafone, Morgan Stanley and Lexmark. It generates around €12 mln in rental per annum.
'What we see at the moment is an extremely positive dynamic in the Budapest real estate market, which is one of the core markets for the CA Immo Group. We are confident that this is a good time in the real estate cycle to make long-term investments in this region. Expanding our Hungarian property portfolio by acquiring this modern office complex with a strong cash-flow will make an important contribution to the recurring earnings of CA Immo,' said Frank Nickel, CEO of CA Immo.
'The acquisition will further strengthen our income-producing portfolio which already has a high occupancy rate of 92% and is a perfect addition to our high-growth development activities in Germany,' he added.
The Millennium Towers were developed by Trigranit between 2006-2011 on a former brownfield site. In 2011 an affiliate of Heitman LLC acquired a 74% share in the portfolio, with TriGranit remaining co-owner and property manager of the four-tower complex.
'Heitman is one of the early institutional investors in Hungry and made this investment in late 2011 when there was limited capital being invested into the Budapest market. Through active asset management, the property has achieved full stabilization and has generated strong results for our investors,' said Gordon Black, senior managing director - European private equity at Heitman.
CA Immo said that the purchase would be funded by existing liquidity and makes Hungary its third most important market after Germany and Austria in terms of portfolio weighting. The transaction is expected to close in the next few weeks, thus contributing to CA Immo's recurring earnings (FFO) in the fourth quarter.
Law firm CHSH acted as advisor to the buyer.
