M7 Real Estate has also agreed a EUR 56.7 million loan facility on a five-year term for the M7 CEREF II fund with Erste Group, one of the largest financial services providers in Central and Eastern Europe, establishing a new banking relationship in the region.
The newly acquired property is located on the Róbert Károly körút near the Váci Corridor, an office sub-market in the immediate vicinity of Budapest’s CBD and adjacent to the capital’s inner ring road, with multiple transport links within a five-minute walk. The recently acquired Laki Center office building 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 asset is 91% let to nine tenants, the press release notes.
This is the second acquisition undertaken by M7 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 EUR 100 million capital deployment target.
M7 Capital CEO Hugh Fraser commented, "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."
Balázs Magyar, managing director, Hungary at M7 said, "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."
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