Wing has purchased the 7,000 sqm Liget Center Office, a protected Hungarian building as an example of Hungarian modernist functional architecture, located on Dózsa Győrgy út at the edge of the Városliget (City Park), from the U.K.-based investor and asset manager, M7 Real Estate.
The building was originally delivered in 1950 and was at one time the headquarters of the Magyar Építőipari Munkások Országos Szövetsége (National Association of Hungarian Construction Workers) trade union. ING Real Estate bought the building and undertook its complete renovation and redevelopment of the building in 2002, to the designs of the renowned Dutch architect Erik van Egeraat.
The redevelopment was considered an achievement, giving a long-term function as a class “A” commercial office building to what had been a run-down protected building.
The property now consists of 7,000 sqm of fully let offices and a 3,800 sqm auditorium connected by a corridor to the office area. The offices are fully let, although the large auditorium has been vacant for years and Wing says it aims to find an appropriate function for the area.
M7 undertook preparatory works for the redevelopment in order to make the project more attractive to potential investors while Tomlin, a multi-disciplinary Hungarian engineering and management services firm, acted as technical consultants for Wing on the deal.
“We consider it our mission to preserve the Hungarian architectural heritage that defines Budapest, while finding new purposes for vacant properties. Its clean lines, spatial arrangement and architectural quality made this building one of the best office buildings in Budapest both when it was constructed, and to this day,” says Noah Steinberg, chairman & CEO of Wing.
“Moreover, the purchase of Liget Center perfectly fits into Wing’s long-term strategy to expand our property portfolio not only through development projects, but though the acquisition of buildings with huge potential and value as well. The location of the Liget Center complex is excellent, and the redevelopment of the Városliget will further boost the value of its location,” Steinberg explains.
M7 Real Estate purchased the Liget Center in 2017 on behalf of the Central European Real Estate Fund 1 and has maintained 100% occupancy at the project.
“Within an efficient timeframe, we have executed our business plan for the Liget Center and sold the asset to a high-quality buyer. Following initial works at the former auditorium, we have also created the potential for a new development at the scheme,” comments Balázs Magyar, managing director for Hungary at M7.
The office sector is generally regarded as the investment destination of choice in Budapest, given the background of a limited supply of investment grade office assets and increasing demand. The acquisition reflects the attraction not only of new office projects, but also redevelopments; more investment transactions are being concluded for earlier generation office complexes such as Liget Center with value-add potential.
“We are both developers and investors as we hold a large portfolio of properties, both assets that we have developed ourselves and properties that we have found in the market. We have found a niche in the market with investment projects that are too Hungarian for some institutional investors but too complex for some local investors and we are able to add value,” Steinberg adds.