The newly acquired property is located on the Robert Karoly Boulevard near the Vaci corridor, an office sub-market that is immediately to the north of Budapest’s CBD and adjacent to the capital’s inner ring road, with multiple transport links within a five-minute walk. It comprises 7,066 sqm lettable area across eight floors, with 89 underground parking spaces and various amenities including cycle storage, a cafe and a restaurant. The asset is 91% let to nine tenants, providing a diverse income profile and short to medium-term opportunities to improve asset value significantly.

This is the second acquisition undertaken on behalf of the Fund which is now 30% invested following the purchase in July of a 12,672 sqm multi-tenanted modern office building in the city of Katowice, Poland. There is a secure pipeline of potential acquisitions, with further completions expected in Q1 2021 moving the Fund towards its €100 million capital deployment target. 

Hugh Fraser, CEO M7 Capital commented: “We have been developing our relationship with Erste Group over a number of years and we’re pleased to have concluded our first major financing with them, which we hope marks the formal start of a long term partnership across the region.”

Balazs Magyar, Managing Director, Hungary at M7 said: “Given the challenging market backdrop of the pandemic, we’re very pleased to have concluded this transaction efficiently which is testament to our relationships on the ground in Budapest. This is a strong addition to the M7 CEREF II portfolio and, with a healthy 8% office vacancy in the Hungarian capital, we are confident of being able to improve the rental profile and rent income of the building through a tailored asset management plan – in the same way as we did with the assets in our first fund, M7 CEREF I.”