GTC acquires Duna Tower in Budapest
GTC has acquired Duna Tower, an iconic office building that dominates the skyline of Budapest’s Váci Corridor.
Inaugurated in 2006, the 60-meter-high office tower stands on the Pest side of Árpád Bridge. It has 16 floors and offers a total of 31,500 sqm of gross leasable area plus a 3-floor underground garage with nearly 400 parking spaces. The building, located close to the Danube bank, boasts a fantastic view to the historic City and the Margaret Island. Downtown Budapest is a five-minute car journey only.
“We are delighted to announce the acquisition of Duna Tower in Budapest. Following the successful completion of our capital increase, we are now ready to put our expertise and financial resources to work to pursue our growth strategy. The acquisition of Duna Tower marks the next significant milestone, after launching construction works on GTC’s own development projects of over 90,000 sqm GLA in Poland and Serbia this year,” said GTC CEO Thomas Kurzmann.
This purchase takes GTC Hungary’s total office portfolio up to 118,000 sqm gross leasable area and reinforces the company’s profile as leading investor and developer in the Region. GTC’s portfolio in Budapest includes major class A office buildings like Center Point, GTC Metro and Spirál.
“The purchase price reflects ca. 7 percent yield on current rent income with actual 80 percent occupancy. We will invest in upgrading the buildings specification and amenities to improve service and comfort level to new and existing tenants. Increased occupancy combined with increased lease terms will contribute to value appreciation,” said Mr. Kurzmann. “We believe that our strong local expertise and presence in Budapest supported by an improving office market environment will enable us to reach these goals quickly,” he added.
The Hungarian economy has been showing a strong momentum over the past year, with GDP growing year-on-year at 3.3 percent in Q1 2015 and an unemployment rate dropping from ca. 10 percent to below 7 percent in just two years. Currently, the vacancy rate in Budapest’s Class A office sector stands at 12.8 percent but is expected to drop further to ca. 10 percent over the next two to three years, mainly due to an increase in demand and lack of new Class A developments in the foreseeable future.