In one of the largest financings in Hungary this cycle, pbb Deutsche Pfandbriefbank and Erste Group Bank have provided a €126m facility for a Morgan Stanley consortium’s c. €250m purchase of a mixed-use portfolio in Budapest.
The five-year facility is equally split between pbb and Austrian bank Erste and reflects a loan-to-value of about 50%.
A fund managed by Morgan Stanley Real Estate Investing, Hungarian property developer WING and Austrian shopping centre manager CC Real bought the three-asset portfolio from fund manager AEW Europe, marking one of Hungary’s largest real estate deals in years.
“This is a strong sign of the overall recovery on the Hungarian real estate market,” said Richard Wilkinson, head of commercial real estate at Erste. “Hungary’s real estate investment market has been showing growth in transaction volumes and we expect this trend to continue throughout the year.”
The assets are MOM Park shopping mall, the adjacent West End Business Centre office building and the EMKE office building.
AEW Europe purchased the assets through its value-added PBW fund in the early-to-mid 2000s and has carried out major refurbishment work at all three locations. The fund targets office, logistics and retail assets in Central and Eastern Europe (CEE).
Tenants include energy firm EDF, serviced office provider Regus, US drugs company Pfizer and professional services firm Ernst & Young.
“This is a major transaction for the Budapest real estate market, which has seen positive signs recently,” said Charles Balch, head of international clients UK & CEE at pbb. “We will continue to carefully evaluate prime opportunities in Budapest, as part of our general strategy across CEE.”