The Hungarian investor Torony Ingatlan Befektetési Alap (represented by Diófa Fund Management) has handed over the 12,700 sqm V17 office center in Váci út.
Diófa forward purchased the HUF 10 billion center last year and the successful preleasing, sourcing of debt finance, development, sustainability accreditation and selling onto an investor could be seen as a favorable reflection of the development strategy of Wing. Construction of V17 was undertaken when the office market was not in the best shape. The office component of the project is fully let with only one retail unit available according to Diófa.
Designed by Aspectus Architect Zrt., V17 has achieved BREEAM “Very Good” accreditation. The development provides around 900 sqm of green space in addition to parking for 95 bicycles with changing rooms and showers, in addition to an electric vehicle charging system. Other features at V17 include natural ventilation of the building, with natural sunlight maximized by large glazed surfaces that can be shaded as necessary. V17 was financed by K&H Bank and preleased to E.ON Hungary with 600 staff now working at the complex.
According to Diófa, sustainability is a must for newly built modern office buildings, as it is considered a basic requirement from the tenant’s side. “For us, V17 is not only a fantastic building, one of the most advanced and greenest office buildings in Budapest, but also a long-term sustainable investment,” said Gergely Biró, CEO of Diófa Fund Management. “In our investment making decisions, we take into account a number of criteria, and a certificated green building with long-term tenants offers significant added value for us.”
In its latest construction project Wing have commenced construction of the Ericsson research and design headquarters at the Nobel Prize Winners Research & Development Park located on the Buda side of the Rákóczi Bridge. The 24,000 sqm LEED Gold accredited complex has also been designed by Wing’s in-house architects, Aspectus. The HUF 20 bln project has been financed by a consortium of banks consisting of UniCredit Bank Hungary, UniCredit Bank Austria and K&H Bank. According to Noah Steinberg, CEO and chairman of Wing, the project will deliver at the end of 2017 with a further second phase of around 20,000 sqm planned. As with V17 he emphasizes the importance of a substantial prelease as part of Wing’s development strategy.
In another built-to-suit project in the neighboring ninth district, Wing is developing the 57,000 sqm Magyar Telekom headquarters. The project is designed by TIBA Építész Stúdió and due to complete in the second half of 2018. The consortium of banks financing the project consists of UniCredit Bank Hungary, UniCredit Bank Austria and K&H Bank.
There is an increasing trend for speculative office development in Budapest, due to rising demand, falling vacancy, the increasing availability of debt finance and the low supply of contiguous quality office space. Cushman & Wakefield estimate that 18 new office centers totaling 350,000 sqm of speculative and built-to-suit space will be delivered by the end of 2018 as vacancy currently stands at 11%.