Orco sells historic Budapest HQ

Orco Property Group has sold its historic head office in Budapest to Stena Realty for an undisclosed price. The Andrassy 70 office building is located on Andrassy Avenue. Dating back to 1880, the property was originally constructed as a private mansion but was converted and extensively refurbished to Class-A offices more recently.

The building forms part of the urban area of the city protected by Unesco World Heritage. The nearly 3, 000-m² office building includes Orco, CIB Bank and the traditional Lukacs Café as its main tenants.

Colliers International represented Orco, while Jones Lang LaSalle acted for Stena Realty. In a market showing restricted investment activity during 2008, the transaction demonstrates that during these turbulent financial times, a flight to prime typifies existing buyer sentiment, the brokers said.

Orco is a listed investor, developer and asset manager in the Central European real estate and hospitality market. It manages assets of EUR 2.5 bn. The company has suffered over the last year from market volatility. In June this year, Orco reported a net loss of EUR13 mln in the first quarter compared to a profit of EUR400,000 in the year-earlier period due to lower revenues.

Last month Orco asked its shareholders to make sure the shares they hold are not used to short sell the company shortly after trading its shares in Prague was halted temporarily when its shares slumped more than 20% from opening levels. Orco's share price stood at EUR 10.18 in early trading in Prague, down 14.77% on the previous day. A month earlier the share price was as high as EUR 21.73.

Stena Realty is the Netherlands-registered property arm of Stena Group, the Swedish family owned conglomerate active in ferry routes, shipping, offshore drilling and property.