Heitman has formed a joint venture with Hungarian developer TriGranit to own and operate four Class A office properties in Budapest. In an announcement, Heitman said it purchased its stake in the assets, which total about 70,000 square metres, on behalf of its value-added Heitman European Property Partners (HEPP) IV fund.
Although representatives from Heitman declined to comment on the purchase price or size of its stake, sources familiar with the situation revealed that the Chicago-based private equity real estate firm will own a 75 percent stake in the Millennium portfolio, which is valued at roughly €145 million. TriGranit will retain a 25 percent ownership stake and continue to serve as manager of the assets.
Rob Reiskin, Heitman’s managing director and co-head of Europe, said in a statement: “The combination of attractive entry pricing, transaction structure, strength of our local partner and the support provided by our lenders will help to provide our clients with a strong risk-adjusted return.”
The four properties in the Millennium portfolio, which were developed by TriGranit, are located in the 9th district of Budapest on the Pest bank of the Danube. The properties are situated within the Millennium City Center, a complex consisting of offices, retail, residential and cultural buildings. Tenants in the four buildings include Morgan Stanley, Vodafone, Nestle and Schering Plough.
Launched in 2008, HEPP IV attracted €505 million in equity commitments and is entering its final year of deploying capital in value-added property assets across Central and Eastern Europe. To date, it is roughly 60 percent invested.