Skanska sells Mill Park office project in Hungary to Erste Real Estate Fund for EUR 100 million
Skanska has 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 the second acquisition from Skanska in Budapest that the purchaser has made following the Nordic Light transaction in 2016.
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 80 percent leased to multiple tenants, including IT Services Hungary. Mill Park will be completed in Q3 2018 and is expected to receive LEED Gold certification.
"This is our second office deal with Erste in Budapest in two years. Such long term cooperation with a trustworthy partner is of a great importance to us. Mill Park is an eighth office project developed by Skanska in Budapest. As with Budapest and other cities, we respond to specific local office demands by building, leasing and selling offices," commented Adrian Karczewicz at Skanska.
"The acquisition of Mill Park is in line with our 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 our investors," said Balazs Pazmany at Erste Asset Managment.
Mill Park will offer 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.
During the sales process, Skanska was advised by Cushman&WakefieldLegal advisers for the transaction were NGYL Partners for the purchaser, and Dentons for the seller.
According to Cushman & Wakefield, Budapest’s metropolitan area of 3.3m represents 34% of Hungary’s 9.9 million population. The city has a GDP per capita of EUR 25,510 (nominal) and accounts for around 40% of Hungary’s GDP. Budapest has recently seen an influx of business services centers with many leading international brands relocating operations to the city: GE, Morgan Stanley, ExxonMobil, BlackRock, AVIS Budget Group, BT, BP and IBM – to name just a few of the largest brands. Q2 2018 tenant activity accelerated with total leasing volumes totaling 161,548 sqm. This resulted in an H1 total leasing activity of 252,646 sqm – the second highest on record. The city is set to witness further growth in occupier demand fueled by strong take up from the co-working sector.