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Mill Park, Budapest, Hungary

CATEGORY
Investment Deal of the Year, CEE
Mill Park offers over 36,000 sqm GLA. It is located in the 9th district of Budapest – an established office location within the Central Pest submarket, and in close proximity to some of the city’s a cultural and academic institutions. The property is already 90% leased to IT Services Hungary, Immochan Magyarorszag, Regus and International Flavors and Fregrances. Mill Park was completed in Q3 2018 and is expected to receive LEED Gold certification. Mill Park offers a 5,500 sqm multifunctional garden with a spacious green area, an outside gym, table tennis and table football as well as outdoor workspaces with plug-ins and WiFi, communal areas and restaurants. All these solutions focus on the wellbeing and working environment of the tenants and their guests. Mill Park is aimed to function as a vibrant meeting point that enhances creativity and collaboration.
Name of the deal
Mill Park, Budapest, Hungary
The date of closing the deal
Q3 2018
Value of the transaction (in EUR)
EUR 100m
Yield
confidential
Seller, plus brief information about the company
Skanska is one of the leading development and construction companies in Europe. Outside the Nordics, the company has European operations in building construction and civil engineering in Poland, Czech Republic & Slovakia, and the UK. Skanska develops commercial properties in select home markets in Poland, Czech Republic, Romania, and Hungary, while the residential development is active in Prague and Warsaw. In 2017, Skanska had sales of SEK 37 billion and about 16,000 employees in its European operations. With the largest presence in CEE among office developers (10 markets within the region), the company enjoys the trust of tenants and investors, who are willing to continue working together, expanding their businesses in Skanska’s other office buildings. The company provides futureproof flexible offices tailored to the needs of modern companies, meeting the highest requirements for sustainable development, which is confirmed by their LEED certification.
Consultancy which advised Seller
Cushman & Wakefield. Dentons was the legal adviser.
Purchaser, plus brief information about the company
Erste Asset Management Ltd (www.erstealapkezelo.hu) offers investment fund management, portfolio management, investment advisory, security lending and asset management for private pension funds in Hungary. Erste Asset Management Ltd was the second largest company in the Hungarian investment fund market in Q2 2018 with a market share of 16.4%. The Company is 100% owned by Erste Asset Management GmbH. Erste Asset Management GmbH (www.erste-am.at ) coordinates, and is responsible for, the asset management activities (asset management based on investment funds and portfolio solutions) within Erste Group Bank AG. At its locations in Austria, Germany, Croatia, Romania, Slovakia, the Czech Republic, and Hungary, it manages assets of about EUR 63.3bn (as of December 2017).
Consultancy which advised Purchaser
NGYL Partners
Financing institution
confidential
Current occupancy level
90%
Please say why this deal should be considered for the award
Skanska sold Mill Park, a two-building office project in Budapest, to the real estate fund of Erste Alapkezelő Zrt. – one of the subsidiaries of Erste Asset Management GmbH. This is Skanska biggest transaction on the Budapest office market in terms of single asset acquisition. This is also the second acquisition from Skanska in Budapest that the purchaser has made following the Nordic Light transaction in 2016. Such long-term cooperation with a trustworthy partner is of a great importance to the developer. Mill Park is an eighth office project developed by Skanska in Budapest. As with Budapest and other cities, Skanska responds to specific local office demands by building, leasing and selling offices. The acquisition of Mill Park is in line with purchasers desire to increase the Fund’s real estate portfolio with newly built “A” category office buildings. This transaction provides a defensive, long term sustainable income for the Fund so it serves well the interests of its investors.