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M7 Expands Light Industrial Portfolio

The U.K.-based investor, M7 Real Estate has increased its presence in the Hungarian market through the acquisition of seven light industrial assets across the country. 

Aerozone logistics center.

The properties, which constitute part of a larger portfolio deal of around 210,000 sqm in 11 locations across Hungary and Czech Republic, were acquired from the Partners Group and Cromwell Property Group. This brings the M7 portfolio in Hungary to more 260,000 sqm.

The industrial sector is increasingly regarded as an attractive asset class despite the limited supply and availability of product. Acquiring older industrial assets is seen as a solution to this, as more investment capital is looking for a home. Prime industrial yields for Budapest currently stand at around 8%.

M7 has, to date, acquired 19 properties with a value of EUR 125.7 million for its M7 CEFEF 1 fund. “The portfolio provides M7 CEFEF 1 with both stable income from an existing tenant base, and also offers significant opportunities to create further value through the leasing of vacant units and targeted capital expenditure and lease extensions with existing tenants,” commented David Ebbrell, chief investment officer at M7.

Revitalized

“We believe that a revitalized asset management strategy for this portfolio will enable us to capitalize on current occupier conditions in the region. The equity we raised in April has been efficiently deployed as we continue to secure properties where significant capital and income upside can be achieved that will deliver strong returns for the fund,” he added.

“With nearly two-thirds of assets within M7’s Central European portfolio in Hungary, this is a further show of confidence in our market and is a demonstration of the comparative value that Hungary delivers,” commented Mike Edwards, head of Capital Markets at Cushman & Wakefield Hungary, who represented M7 on the deal.

The investor purchased the 62,000 sqm Aerozone logistics center, located close to the Liszt Ferenc airport earlier in the year. The target raise of EUR 60 mln of investor capital for the fund has now been reached and a EUR 68.5 mln debt facility has been concluded with Starwood European Real Estate Finance.