Hungarian developer Redwood Real Estate Holding has delivered the latest Budapest office complex, the 5,000 sqm Ecodome office, located in the Castle District.
Redwood originally bought the development plot in 2007 after a tender by the local municipality but the project was put on hold due to the economic downturn. It subsequently acquired modified development permits in 2011 for the project to meet the perceived changing demands of tenants in the market and the redesign was undertaken by the DVM group.
The complex is expected to be awarded LEED “Platinum” accreditation and includes energy technology, individual air and acoustic controls, bicycle parking, electric car recharging facilities and a green roof with restaurant facilities. The project provides 40% water savings, and 60% electricity savings according to Redwood Holding.
Ecodome is close to fully let and the tenants include Swietelsky, who acted as constructors on the project. The letting process for the boutique office project, a rare delivery in the Castle District area, lasted for a year according to Tamara Szántó, business manager of Cushman & Wakefield, who acted as leasing agents. The complex houses around 400 staff.
The Ecodome project has attracted firm bids from both domestic and international investors according to Bálint Erdei, founder and CEO of Redwood, and an investment transaction is under due diligence. The complex is valued at EUR 20 million and was developed on the basis of a 65% loan-to-value bank loan.
Ecodome is one of four buildings delivered in the Budapest office market in the third quarter of the year according to the Budapest Research Forum (consisting of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary), bringing the stock of modern office space to 3.58 million sqm. The other deliveries were the 58,000 sqm Telekom HQ by Wing, the 36,000 sqm Mill Park by Skanska and the 11,000 sqm Advance Tower by Futureal. The vacancy rate has decreased to 6.4%.
“We are looking for international partners to act as a joint venture partner for a larger 20,000 sqm office development,” says Erdei. “I think that we could provide the expertise as we have experience in the office, hotel and residential sectors. Redwood does not specialize in a particular area of real estate development and our current portfolio includes office, hotel and residential developments,” he added.
The company is working on a 140-room hotel development in central Pest, the redevelopment of a historical building that is due to be delivered in 2019. A further project is a 160 apartment residential development in Csillaghegy that is also scheduled to be delivered in 2019.