Skanska Completes Mill Park

Office Market

Skanska Development has officially handed over the 36,000 sqm Mill Park office complex. The eighth Budapest office development project by the developer, located in District IX, is 90% let and has been purchased by Erste Real Estate.

Mill Park courtyard.

A major prelease was concluded with IT Services Hungary, who have established their Hungarian headquarters at the complex. This reflects the ability of Skanska and other developers at the high end of the Budapest office market to successfully develop, let and sell a project on to investors.

The LEED Gold certified office complex, designed by M-Teampannon Architecture and Engineering Ltd., provides 36,000 sqm GLA of office space on seven levels with a further three levels of underground parking, totaling 538 spaces. The complex also provides direct tram and bus transportation links although, unlike the Váci Corridor, there is no direct metro link.

Marcin Łapiński, managing director of Skanska Property Hungary, sees office accommodation as a core element for companies in hiring and retaining staff in the current tight labor market. He sees one of the main elements of the project as the 5,500 sqm internal garden, which takes up around half of the total one hectare area of the site. This provides more relaxed meeting areas for staff in a different environment, in addition to which the green area also houses an outside gym and swings. The complex further provides space for 200 bicycles in addition to showers, changing facilities and service facilities.

Skanska completed the sale of Mill Park to Erste Real Estate Fund in August. This is the second deal between the Hungarian investment fund and Skanska in Budapest following the Nordic Light transaction in 2016.

Strong Demand

With demand in the market continuing to be strong, Skanska has also started construction of the 14,000 sqm Nordic Light Trio, the third phase of its Nordic Light office complex in Váci Corridor. The latest EUR 29 million addition is already 80% prelet. Designed by Paulinyi-Reith & Partners Zrt., it aims to meet the WELL Building Standard and will be the developer’s first Hungarian project to be so awarded.

“For us wellbeing is not only about soft features, but also about the technology that eases the life of our occupiers,” said Łapiński.

The complex will provide a 2,400 sqm landscaped garden, bicycle storage and electric car charging facilities, completion is scheduled for the second quarter of 2020. The first two phases, totaling 26,000 sqm, were delivered in 2016.

Skanska has acquired a further plot in District IX and will undertake development of a first 20,000 sqm phase of what it is calling Skandanavian Gardens once a prelease has been agreed. The building is located at the intersection of Könyves Kálmán körút and Üllői út, providing direct metro, road and tram access. Again, the complex is being designed to meet WELL sustainability accreditation standards.

Skanska has been operating in the Hungarian market for around 30 years and in Central Europe can also be found in Czech Republic, Poland and Romania. This year the Swedish developer has sold its Visionary office center in Prague and the first phase of Campus 6 in Bucharest to CA Immo, the transactions occurring within a two-month period. The Central Europe strategy of the company is to offer projects to the market shortly after completion, a policy that would seem to be working well for it in the strong office markets in Hungary and across the region.

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