Munich-based GLL Real Estate Partners is buying prime Budapest properties for its €1bn Accession Fund.
It is paying around €85m for Park Atrium, an office building owned by RREEF. The deal reflects a yield of between 6% and 6.25%.
GLL buys up Budapest properties for €1bn vehicle
The vendor has enjoyed yield compression in the Hungarian capital, having acquired the 26,000 m² asset for €61m in September 2004, when the price reflected an initial yield of about 7.5%. The property is let to ING bank.
GLL is also understood to have bought Rockspring Property Investment Management’s Bank Center in Budapest. The vendor has been asking €150m for the prime 40,000 m2 office asset. If achieved, the price would reflect a net yield of 5.5%.
German fund manager Degi dropped out of the race for Bank Center last December as a bidding war broke out. Bids for the property reflected pre-credit squeeze prices.
GLL has also paid developer Skanska Property Hungary €72.2m for the Nepliget Center, another prime office project in the city.
Only a small portion of the scheme is leased out. Skanska is responsible for leasing the project for two years after completion. The final price depends on the rent achieved at letting.
The project comprises a total of 26,000 m2 and will be constructed in three phases. It be completed this year and next.
GLL is a joint venture between Lend Lease Real Estate Investments and European insurance company Assicurazioni Generali that raises funds for commingled property investment.
GLL completed the first closing of the Accession Fund, raising €200m of equity, in August 2004.
It has more than €1bn to spend on real estate in Hungary, Poland, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Romania and Bulgaria.
