The partnership has since undertaken an extensive renovation of the historic building, bringing the complex to the standard required for Breeam, Well, Acccess4You and WiredScore accreditation (the latter being a first for the technology certificate in Hungary). Certification is ongoing.
The office interiors and common areas have been redeveloped to meet current tenant demands. ConvergenCE has emphasized the novelty value of the project’s sustainable and ESG-compliant space in a central business district location.
A notable development option in the Budapest office market is for the redevelopment and renovation of existing quality buildings, particularly in the CBD, where there is a scarcity of building plots, but there are listed buildings needing renovation. Despite this, the CBD sub-market has the lowest amount of office space under construction in Greater Budapest due to the difficulties of developing office projects.
Convergence and Europe Capital have been working together since 2005 with notable office developments such as the Eiffel Square, Kálvin Square, and B52 redevelopments. All these projects have successfully attracted buyers.
The Akadémia building was bought for the Europa Capital value-add Europa Fund V1, with project financing provided by Erste Bank. The building was originally constructed between 1861-63.
“With our investor partners, we buy under-positioned buildings in great locations, which we renovate and refurbish with state-of-the-art technology and services, then reposition and re-let,” says Csaba Zeley, managing director of ConvergenCE.
“We pay great attention to ensuring that all our properties have the highest environmental ratings. Obtaining certification is not just regulatory compliance, but also a cost-saving, value-added aspect, a crucial factor in sales and leasing,” he insists.
“ESG requirements are mainly tenant-lead; therefore, we designed our Academia project based on those principles in collaboration with BuildExt, an innovative Hungarian architectural company,” Zeley explains.
“In the CBD, there are very few developments and no newly built projects at all. To comply with sustainability initiatives, we do not build new buildings from the ground but focus on value-added developments of existing buildings that require refurbishment,” he says.
Zeley said although the building is now complete, a few operations are still ongoing, and certifications are in progress.
“I am proud to announce that Academia will soon become the first non-new construction Well ‘Platinum’ building in Hungary. Breeam certification is underway, and we are on the verge of obtaining the ‘BB’ energy certificate, a level even new office buildings in Budapest rarely achieve,” Zeley says.
Academia is a rare completion in a market with a low pipeline currently. CBRE estimates the total office completions in the Budapest office market to be 180,000 sqm by year-end. For 2024, it estimates 114,000 sqm of delivery, two-thirds already preleased. In the following year, 2025, just 67,000 sqm of space is expected to be delivered.
CBRE has also identified 15 projects where construction has not started, but planning is at an advanced stage. These have a combined volume of 311,000 sqm and could be completed by 2027.
This article was first published in the Budapest Business Journal print issue of October 6, 2023.
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