OTP Real Estate Fund has purchased the 26,000 sqm Class A Roosevelt Office Building on Széchenyi Square in Budapest from a fund managed by Munich-based real estate fund manager GLL Real Estate Partners (GLL), a member of Macquarie Group in one of the largest and most significant prime commercial real estate transactions in the CEE region.
OTP Real Estate Fund has carried out large-scale real estate acquisitions in recent years to invest the outstanding volume of inflowing investor capital into high-quality and yield-generating real estates, maintaining the yield level that has made the Fund exceptionally popular among investors. During the excessive acquisition process of recent years, the Fund has shifted its main focus to the office market, acquiring – among others – the West End Business Centre in 2017 and the Corvin 1-3 office buildings in 2018. By purchasing MOM Park last year, the Fund has carved out also a major slice of the retail segment as well. Now, after closing another successful transaction, this portfolio was further expanded with the prestigious Roosevelt Office Building located on Széchenyi Square.
Roosevelt Office Building was initially constructed in 1980, and underwent complete reconstruction in 2006 in line with quality Class A requirements of the institutional office market, and was significantly refurbished by the former owner in 2016, ensuring the premium nature of the property.
The building comprises 24,200 sqm of Class A office space on the upper floors, and 1,800 sqm of ground floor retail and amenity space, and is leased to a broad range of sector-diverse tenants at a current occupancy rate of over 95%. The offices offer spectacular views of Széchenyi Square, the Chain Bridge, and the Buda Castle.
In relation to the transaction, OTP Real Estate Fund Management Ltd. CEO Dr. Nándor Tóth said:
“While in recent years Hungarian real estate funds were in the grip of heightened acquisition pressure due to the intense inflow of capital, this year focus has shifted to regulatory changes and an increasingly tense yield competition. In my view, the acquisition of the premium-category Roosevelt Office Building holds great significance for our investors, as in the future this property will greatly contribute to maintaining and also increasing the yield of our Real Estate Fund, while also keeping it well-balanced.”
“This latest transaction is in line with the acquisition strategy set out in recent years, and accordingly not only is the location of the Roosevelt Office Building excellent, so are the quality of the services provided by it. It is operating with high occupancy, with a reliable mixture of Hungarian and international tenants. The office building has all the attributes to support the Real Estate Fund’s performance in the long-term as a successful portfolio component”, said Eszter Salamon, Director of the Special Deals and Transactions Unit at OTP Real Estate Fund.
The seller fund is managed by a Munich-based real estate fund manager GLL Real Estate Partners (GLL), a member of Macquarie Group.
GLL was represented by Cushman & Wakefield and Lakatos, Köves and Partners in the tender process and the acquisition procedure. GLL has global assets under management totalling approximately €7bn, and have been active in Central & Eastern Europe since 2004 where they currently manage in excess of €1.5bn of commercial real estate, including two other buildings in Budapest: Bank Centre and Váci 1.