More than EUR 1 bn transacted on the commercial real estate market
The total commercial real estate investment transaction volume in Q3 reached EUR 505 million in Hungary, pushing the 2017 year-to-date volume to nearly EUR 1.3 billion, according to JLL Hungary’s latest statistics.
Although only one retail transaction has been recorded between July and September, the asset class in this period generated the largest share of the volumes with 54%, followed by offices (38%) and logistics (4%), while the remaining balance was made of assets purchased for future development purposes, according to a press release sent to Budapest Business Journal.
The largest transaction of the period was the sale of the 66,000 sqm Aréna Plaza shopping mall purchased by a new market entrant, NEPI Rockcastle, for a reported EUR 275 million. The South-African investor is a well-known CEE market player, with a retail portfolio in Poland, Slovakia, Romania and Croatia.
NEPI Rockcastle also purchased the 2.2 hectare development plot adjacent to Aréna Plaza for a potential future extension. Another notable deal was the sale of the monument protected Eiffel Palace office building by the Hungarian Central Bank to the German-based asset manager, Corpus Sireo, who carried out its first acquisition in the country in 2016 when it acquired the Park Átrium office building.
According to JLLʼs latest market research, the prime yields stand at 6% for offices (50 bps compression, quarter-on-quarter), 6% for shopping centers (flat) and 7.5% for logistics (25 bps compression q-o-q).
Benjamin Perez-Ellischewitz, regional director and head of capital markets at JLL Hungary said: "2016 was a very busy year in the Hungarian real estate capital market. We recorded the disposal of more than 100 buildings and the annual transactional volume reached almost EUR 1.7 billion. 2017 is in line but compared to last year, we see a lower number of transactions but a higher average lot size. Although the core German buyers, like Corpus Sireo and KGAL, are actively looking at acquisition opportunities and expanding their portfolios, the Hungarian funds remain the main drivers, as reflected by their market share of 41% within the Q1-Q3 volumes."
Associate director Rita Tuza added: "Based on our forecasts, the 2017 annual investment volume will be similar to the 2016 levels, but a slight incline is also possible, provided the closing of the pipeline transactions isnʼt drawn out. Among others, by the end of the year we expect a large industrial portfolio, a leading 5-star hotel and several office buildings to transact. Further yield compression is unlikely by the end of the year."
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