Flexible Office Solutions: Key to Retaining Tenants

Szervita Square Building by Horizon Development .

INVESTMENT-GRADE REAL ESTATE PRODUCT AVAILABLE IN HUNGARY

Hungary is now seen as having a solid pipeline of asset-grade commercial real estate products to meet investor demand, particularly in the office and industrial sectors, writes the Budapest Business Journal’s real estate editor, Gary J. Morrell.

All the various market sectors have been regarded as attractive investment destinations by investors and analysts, with a significant yield premium on Western Europe and, indeed, on Poland and the Czech Republic, Hungary’s regional peers. That pipeline is important, as the limited availability of suitable investment-grade products continues to be an obstacle to market liquidity.

While international, Central and Eastern European regional players and Hungarian investors all continue to show an interest in the local markets, the current investor hesitancy reflects the geopolitical uncertainty in the region. In this environment, many vendors and investors are adopting a wait-and-see strategy in anticipation of a more favorable political, economic and financial environment.

The Hungarian investor Adventum’s acquisition of the Tesco portfolio was the largest deal in Hungary in terms of magnitude in 2022, according to Rita Tuza, head of capital markets at JLL Hungary.

“We rarely see such large ticket deals happen in Hungary and the complexity of the deal (14 multi-tenanted assets at various locations in Hungary and additional Czech properties) makes it even more significant,” she said.

There is currently low liquidity in the retail sector in Hungary due to

STOP PRESS: CODIC HUNGARY SELLS GREEN COURT OFFICE FOR EUR 77 MLN

The Green Court Offices complex in its Váci Corridor setting.

As this publication was going to print, news broke that Codic Hungary and Pesti Házak Zrt. had sold the Green Court Office development on Váci út for EUR 77.1 million. The transaction proves that there is investor interest in office developments in the capital, the developer says. The building was acquired by Groupama Gan REIM, representing French real estate investment company SCPI Affinités Pierre.

By BBJ Staff

The Green Court Office complex is on the famous Váci út office corridor in District XIII, prized as a location for modern offices as it has good public transport links and direct access to amenities, and is well integrated into the surrounding community. The two-building complex, which has a total leasable area of 20,181 sqm, penned by the Hungarian firm DPI Design, won the “Office Development of the Year” title at the Portfolio Property Awards 2021 and first prize in the “Mixed Function Building” category at the 24th FIABCI Hungarian Property Development Award Competition in November 2022.

The two office buildings at Green Court Office currently have eight international tenants, including Diageo Group, one of the world’s largest spirits distributors, which moved into its new head office in May 2022. Opened in early 2022, Codic says it developed the project to high ESG standards: It has a Breeam “Excellent” rating and “BB” energy efficiency certification and is a nearly-zeroenergy building (NZEB).

When Diageo officially presented its new offices in the early summer of 2022, it made much of what it called the notable sustainable features. Due to the rainwater harvesting system at Green Court Offices, 100% of the rain can be re-used, which potentially equates to 30,000 bottles of Johnnie Walker per day, the spirits distributor said. Additionally, selective waste collection is greatly emphasized.

Quality LED lighting design supports the goal of lowering the carbon emission footprint. LEDs have an expected lifespan of 50,000 hours, while a typical incandescent bulb lasts only about 1,000 hours. Builtin UV filters provide protection from infection in air handling units, and the role of the double-skin façade is important for acoustics as well as heating/cooling and energy conservation. In addition, there