One of the worldʼs largest real estate investment managers, AEW has announced its first acquisition in Hungary, a retail-led asset at Vörösmarty tér 3 in Budapest on behalf of the Europe City Retail Fund for around EUR 18 million, according to a press release sent to the Budapest Business Journal.
The property in question, with 3,163 square meters in total and providing 3,072 sqm of retail and office space, is the former Luxus department store, giving AEW ownership of a key retail site in the heart of the capital.
The seven-story propertyʼs ground and first floors are anchored by Budapestʼs recently renovated Bershka flagship clothing store, as well as a unit of the Italian-style restaurant chain Vapiano. The second floor is vacant and will be renovated and let as office space, the company says. The remainder of the property is residential.
The building itself, located in the middle of Budapest’s pedestrianized shopping district and directly on Vörösmarty tér, serves as home to a number of well-known brands in the adjacent streets including Zara, Nike and Moncler, and also comprises multiple hotels and high-end residential and office assets.
"This is one of the best retail assets in Hungary, reflecting our highly selective acquisition strategy that, in the CEE region, will focus predominantly on Hungary, Poland and the Czech Republic," said Nikos Koulouras, co-head of investments for private equity funds at AEW. "These core regional economies have benefited from high GDP growth, with falling unemployment and strong retail sales, underpinning our decision to broaden the portfolio into these geographies," he added.
"We continue to leverage AEW’s extensive network to identify prime assets that are supported by positive fundamentals across Europe’s major cities, as we work to assemble a high-quality portfolio that will deliver value to our investors," added Christina Ofschonka, fund manager for Europe City Retail at AEW.
AEW was advised by Dentons and JLL, and the vendor - which state news wire MTI named as the National Bank of Hungaryʼs Pallas Athéné Foundations - by DLA.