In two days, property holding company Appeninn has announced the purchase of 18 commercial properties currently leased by supermarket chain Spar and a class A office building in central Budapest, according to reports by state news agency MTI.
Appeninn will buy the 18 properties from Erste Real Estate Fund and Erste Euro Real Estate Fund for EUR 14.5 million. The properties are located outside of the capital and are leased by supermarket chain Spar, according to MTI.
The properties will generate an annual yield of 12.73%, Appeninn said. The holdingʼs share price rose sharply after the disclosure was posted on the website of the Budapest Stock Exchange. The shares traded at HUF 620, up 8.89%, at 1 p.m. Thursday, rising to HUF 660 by close of trading.
The properties have a combined gross commercial area of more than 18,000 square meters and a few more than 1,200 parking spaces, Appeninnʼs PR agent said in a separate statement.
Last year Lidl and Spar took over several stores from local supermarket chain CBA, while the Hungarian government has put great efforts into strengthening local supermarket chains. The majority owner of Appeninn is Lőrinc Mészáros, a close ally of prime minister Viktor Orbán.
On Friday, Appeninn announced another new acquisition, the class A office building Dávid House, located on Budapestʼs Andrássy út, for EUR 7 million. The holding acquired the 2,400 sqm building, converted from the former Neo-Renaissance Andrássy Palace in 2001, by purchasing 100% of Plaza House Kft.
Appeninn will utilize the building by leasing it, from which the management hopes to realize an annual yield of more than 7%. To help finance the EUR 7 mln purchase, holding company Konzum - which announced it would acquire a majority in Appeninn in December - is providing a EUR 2 mln loan.
Appeninn will settle the claim arising from the loan transaction by issuing new shares through a private placement. The companyʼs board has set the issue value of the new shares at HUF 660, the closing price of Appeninn shares on Thursday.
The transaction is the next step in Appeninnʼs earlier announced growth strategy to expand its portfolio with premium-category, high-yield office and commercial property, noted Appeninnʼs PR agent in a statement.