M7 Real Estate has acquired a multi-tenanted office property in Budapest, Hungary on behalf of M7 CEREF II fund for €12.35 million.
M7 has also agreed a €56.7 million loan facility on a five year term for the fund with Erste Group.
The newly acquired property is located on the Róbert Károly Boulevard near the Váci corridor, an office sub-market that is immediately to the north of Budapest’s CBD and adjacent to the capital’s inner ring road, with multiple transport links within a five minute walk.
It comprises 7,066 sqm lettable area across eight floors, with 89 underground parking spaces and various amenities including cycle storage, a café and a restaurant.
The office property in Budapest is 91% let to nine tenants, providing a diverse income profile and short to medium term opportunities to improve asset value significantly.
This is the second acquisition undertaken on behalf of the Fund which is now 30% invested following the purchase in July of a 12,672 sqm multi-tenanted modern office building in the city of Katowice, Poland. There is a secure pipeline of potential acquisitions, with further completions expected in Q1 2021 moving the Fund towards its €100 million capital deployment target.
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“We have been developing our relationship with Erste Group over a number of years and we’re pleased to have concluded our first major financing with them, which we hope marks the formal start of a long term partnership across the region,” said Hugh Fraser, CEO M7 Capital.
“Given the challenging market backdrop of the pandemic, we’re very pleased to have concluded this transaction efficiently which is testament to our relationships on the ground in Budapest. This is a strong addition to the M7 CEREF II portfolio and, with a healthy 8% office vacancy in the Hungarian capital, we are confident of being able to improve the rental profile and rent income of the building through a tailored asset management plan – in the same way as we did with the assets in our first fund, M7 CEREF I,” said Balazs Magyar, Managing Director, Hungary at M7.
