Soon after its 2014 delivery, the 125-year-old Eiffel Palace building in Budapest was 100% leased to prestigious local and international companies under long-term contracts. With the second divestment transaction announced last week, Eiffel Palace has generated very high yields, claims a press release sent to the BBJ today.
The heritage-protected Eiffel Palace – originally built in 1893 – has been sold twice within the last three years, both times at the best yield on the Hungarian property market, asserts the press release from the buildingʼs developer, Horizon Development.
The National Bank of Hungary (MNB) purchased the building directly from the Horizon Development three years ago, in August 2014, at a price of EUR 45.3 million, with an approximate yield of 6.5%, reselling it in August 2017 to the Luxembourg-based Corpus Sireo Real Estate investment fund for EUR 53.8 million, at a yield of around 5%, thus generating an almost 20% profit on the deal.
The former headquarters of historic Hungarian daily newspaper Pesti Hírlap and the Légrády (later Zrínyi) Printshop has excelled in Central and Eastern Europe, and even globally, in the categories of heritage restoration, sustainability, real estate development, architecture and general construction, collecting 18 awards in total between 2013 and 2015, the press release notes.
“The formerly widely publicized, highly politicized and non-professional claims of the building being sold in 2014 for a sum above market price are now completely refuted,” asserts Attila Kovács, managing partner of Horizon Development, evaluating the projectʼs success over the past three years. “It is the perfect financial confirmation and professional feedback that the National Bank of Hungary managed to re-divest our prestigious office development with such high profit levels within three years of the original purchase.”
Kovács added that the transaction also carries a “strong message” to the Hungarian real estate market that Eiffel Palace is “a true global success story from a property development perspective, as well as a stable, secure, valuable form of investment, run at maximum capacity.”