Europa Capital Buys Akadémia Business Center

Office Market

The Akadémia Business Center building, purchased by Europa Property.

The pan-European real estate investment manager Europa Capital has acquired the 12,500 sqm Akadémia Business Center, located on the Pest bank of the Danube in the historical center of Budapest, in partnership with ConvergenCE. The acquisition has been completed on behalf of Europa Capital’s latest value-add fund, Europa Fund VI.

The classical Central European building, refurbished and redeveloped in 2000, served as the Raiffeisen Bank headquarters. The building is now vacant as Raiffeisen has moved to a new HQ at Agora Budapest. That provides an opportunity for refurbishment and repositioning in line with current tenant demands, sustainability and ESG investment standards.

“The objective is not only to create a building suitable for modern occupiers but also to transform the asset to a Net Zero Pathway, removing the reliance on greenhouse gases. The building will be targeting both BREEAM, Wiredscore and WELL certification,” said Europa Capital.

ConvergenCE, which has acted as a local partner to Europa Capital in Hungary since 2005, will be responsible for the local asset management of the project. Interior works are expected to start on completion of the acquisition and will involve an extensive internal renovation, the installation of new mechanical equipment and remodeling of common areas and office spaces.

“Akadémia Business Center is in a top location and is an asset with a lot of opportunity to undertake our usual high standard of refurbishment with a focus on NZC pathway, wellness and occupier requirements,” explains Robert Martin, partner and head of investments at Europa Capital.

“Prime office availability in the heart of Budapest is scarce, underpinning the business case for the investment. On completion, the property will be very attractive to those companies looking for a prestigious, downtown address with good wellness and sustainability credentials,” Martin adds.

Value-add Possibilities

Hungary is expected to attract more international investors, particularly to the office and industrial sectors. As activity in the office market is limited by a low supply of available investment-grade assets, in addition to a restrained development pipeline, investors are increasingly looking at value-add possibilities among earlier generation office stock and older historic buildings that require renovation.

“This investment demonstrates our conviction in a contrarian opportunity in the cycle for well-located office assets, as the market adjusts to the impact of the pandemic,” comments Jason Oram, partner and fund manager at Europa Capital.

“The addition of Akadémia Business Center to our office portfolio offers another great opportunity to add value through extensive high-quality refurbishment, which we are confident of delivering through our well-established partnership with ConvergenCE,” Oram insists.

Working on its Hungarian investment strategy in conjunction with ConvergenCE, Europa Capital is an excellent example of how international capital can partner with a local operator to take advantage of its knowledge of the local market conditions.

Europa Capital purchased the earlier generation 9,000 sqm Kálvin Square office complex in District VIII in 2015. The complex was refurbished and repositioned by ConvergenCE, who acted as property and asset manager, and the BREEAM accredited, fully let building was sold on to KGAL in 2017.

“We are pleased to be partnering with Europa Capital again following the successful development of a number of projects including Eiffel Square, Kálvin Square, B52 and CityZen, all of which have since been sold,” notes Csaba Zeley, managing director of ConvergenCE.

This article was first published in the Budapest Business Journal print issue of January 28, 2022.

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