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Europa invests in Budapest portfolio

The London-based private equity real estate firm has acquired three office buildings in Budapest as it continues its CEE strategy.

Europa Capital, the London-based private equity real estate firm, has invested in a portfolio of three office buildings in central Budapest from its latest pan-European opportunistic fund.

The firm has acquired Kalvin Centre, Duna Office Centre and Baross 52 for an undisclosed amount using capital from the €600 million Europa Fund IV.

Duna Office Centre will be subject to a comprehensive refurbishment to offer highly specified space for large tenants. Both Kalvin Centre and Baross 52 will also be improved in order to enhance the quality of the office environment to both existing and prospective tenants, according to the firm.

ConvergenCE Hungary, which developed the Eiffel Square in Budapest with Europa, will be responsible for the asset management of the three buildings and will deliver the proposed refurbishment, reposition and re-lease of the portfolio.

“The acquisition of this portfolio fits within our strategy of acquiring well located buildings in principal capital cities in the CEE region that are fundamentally sound, but are under-capitalised and require intensive asset management in order to fulfil their potential,” says Robert Martin, principal and head of central Europe at Europa.

Europa, which has been operating since 1995, held a final close €600 million on Europa Fund IV in July last year. The firm first hit the fundraising trail with Fund IV in early 2012 with a €750 million target, before holding a first close of around €200 million in October of that year.

Fund IV, for which it is targeting a gross internal rate of return (IRR) of 25 percent and a net IRR of 20 percent, is focused on the repositioning of real estate into institutional-quality assets; loan restructurings where a new infusion of equity is required; acquiring prime assets from motivated sellers; and the recapitalizations of assets or loans where the fund will act as the new borrower or sponsor.