The recent portfolio acquisition in Budapest by a consortium led by Morgan Stanley Real Estate Investing was the largest commercial real estate transaction by investment volume in Hungary since the global financial crisis, according to JLL.
The recent portfolio acquisition in Budapest by a consortium led by Morgan Stanley Real Estate Investing was the largest commercial real estate transaction by investment volume in Hungary since the global financial crisis, according to JLL.
JLL, which advised the vendor AEW Europe on the deal, said it was a further sign that Hungarian real estate is once again a target for international investors after years of limited activity.
The market moved into the spotlight on 5 August when MSREI confirmed the acquisition of over 91,000 m2 of prime retail and office space across three properties in the Hungarian capital. MSREI was partnered in the deal by Hungarian developer-investor Wing and Austrian shopping centre specialist CC Real.
The two largest assets are located in the Buda district of the Hungarian capital: MOM Park, a 50,000 m2 prime shopping mall and office property and the West End Business Center Offices, which includes 27,400 m2 of office space. The third asset is EMKE, a 13,700 m2 office building on the Pest side of Budapest.
Top deal
The price for the portfolio was not disclosed but JLL said it represented the largest sale in Hungary since the 50% sale of Budapest’s Allee shopping centre to Allianz Real Estate Germany for around €100 mln in 2010.
Hungary was hit hard during the global financial crisis and struggled to regain momentum in the following years. The country’s total commercial real estate transaction volumes fell steeply from €2 bn in 2007 to a low of €146 mln in 2012. The pace picked up in 2014 with annual volumes of €580 mln and in H1 2015 total transaction volumes reached some €280 mln. Annual investment volumes in 2015 are expected to exceed 2014 volumes by 20-30%.
Benjamin Perez-Ellischewitz, head of capital markets, JLL Hungary commented: 'The sale of the AEW portfolio is of outstanding importance for the Budapest commercial real estate investment market as it is a clear sign of renewed interest from international investors, particularly from the US, for large deals and portfolio transactions. This transaction is a clear signal for the investment community of the return of international institutional equity, along with attractive debt terms to Hungary.'
Richard Bloxam, head of EMEA capital markets, JLL, added: 'The Hungarian market is recovering sharply off the back of improving national indicators and a good economic momentum and this deal is a milestone that further proves that the investment market is getting stronger. With its strong leasing market, the country’s real estate assets will no doubt continue to pique the interest of many international investors well into the second half of 2015.'