Budapest-based investment company Wigan Acquisitions has completed the acquisition of a multi-let office building in central Budapest, taking the total capital deployed on behalf of its family office and private equity partners to EUR135 million.
Austria House, a modern office building of 3,400 sq m GLA over ground level and eight upper floors with the benefit of 41 underground car parking spaces, as well as being close to major public transport hubs, is in a prime downtown location of Budapest’s historic centre.
The central business district of Budapest currently has a high demand from tenants as reflected in the historically low vacancy level compared to other periphery districts. The tenant profile is well diversified with a number of international companies and some upside potential from the potential re-gearing of expiring leases.
This acquisition follows Wigan’s launch of ‘CERESA’ in 2017 as a bespoke asset management platform for its principal equity partners looking to invest in real estate across Central and Eastern Europe. With average yields compressed to historic lows and the prospect of higher long-term interest rates starting to affect international property pricing returns, the platform’s main appeal being to investors preferring direct line of sight to real assets according to their specific criteria and customised risk-return profile.
CERESA offers its co-investors the opportunity to deploy capital through its regional platform, with greater control over deal sourcing and individual asset appraisal, stronger relations through the local partners, broader flexibility on the investment strategy, and full transparency through clearly aligned interests. The asset management platform’s main focus remains city centre direct real estate investments in best-in-class locations offering sustainable cash-on-cash returns with value-add potential through proactive asset management initiatives. Compared to Western Europe and particularly the UK’s more subdued GDP growth, the economies of CEE-6 region recorded growth rates of 3 per cent up to to 6 per cent year-on-year.
Patrick Wigan, Managing Director of Wigan Acquisitions, says: “Given the prevailing global economic and political uncertainty, we understand that principal investors are increasingly targeting direct real estate across the CEE region with the support of experienced local partners as opposed to investing in more common ‘blind-pool’ real estate fund structures. With the successful closing of Austria House, with the support of our local due diligence team (including Ernst & Young Budapest for tax, financial, legal; and Sentient for technical DD), we’re proud to have supported our committed overseas co-investors. Our interests remain fully aligned to building out a portfolio of city centre located capital value appreciating assets offering significantly higher return prospects compared to Western Europe”.