South Korean REIT JR AMC has purchased an office building in Budapest, Hungary, for €41 mln from Skanska.
Called Nordic Light Trio, the asset is located by the river Danube in the Hungarian capital and is still under construction. It will comprise a leasable area of around 14,000 m2, across seven stories, when it is completed in the second quarter of 2020. The property is 98% pre-leased.
The acquisition is the first by JR AMC in the CEE region. It is also the maiden transaction with a South Korean investor by Skanska’s commercial development business unit in CEE.
Welcoming the purchase, Hyon Suk Jang, executive managing director of foreign investment at JR AMC, said: ‘With yields in Western Europe breaking historic records, our interest is to constantly explore new markets whereby we can achieve high yields, simultaneously minimizing any trade-off in building quality or macro risk profile.
‘We strongly believe the CEE market is in favour compared to other markets. In the case of Budapest, Hungary, we have been following the market for the past year and a half with high interest. Considering both macro/micro economic figures and also the trend of the real estate market in Hungary, we are convinced of the significant potential for further growth and establishment.’
Adrian Karczewicz, head of divestments at Skanska CEE, said: ‘This is further proof that Asian investors have a positive sentiment towards Europe and actively search for new investment opportunities on our continent.
‘On the one hand, they find CEE countries attractive thanks to the political and economic stability that they offer, which is additionally guaranteed by being part of the European Union. And on the other, prospects for the region are also promising with return on investment being higher than in Western Europe.’
In 2017 and 2018, Asian capital investment in CEE hit €2.6 bn, focused mainly on the industrial, retail and office sectors, according to research by Colliers International.
