Wigan Acquisitions has started the new year with the completion on a multi-let office building in central Budapest, taking the total capital deployed on behalf of its family office and private equity partners to €135m. Austria House, a modern office building of 3,400 sqm GLA over ground level and 8 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 an 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% up to to 6% year-on-year.
“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,” commented Patrick Wigan, Managing Director of Wigan Acquisitions.