GTC acquires Ericsson and Evosoft headquarters
Wing CEO Noah Steinberg speaks at Evosoft’s official opening on April 27.
After purchasing the 15,000 m2 Váci Greens D building from Atenor, regional developer and investor GTC plunged into the Hungarian office market again with the over € 160 million acquisition of Ericsson’s 21,000 head office. m2 and the newly delivered 20,700 m2 Siemens Evosoft headquarters in South Buda.
“The acquisition of two unique Class A office buildings occupied by triple A tenants is an excellent opportunity to continue the growth of GTC,” said GTC of the agreement.
“Both buildings have LEED“ Gold ”green certification. The operation is part of GTC’s strategy to refresh its portfolio with newer and more modern buildings and to focus on office developments in the EEC region as well as to fulfill the policy of investing in projects that respect ecological standards, ”he says.
“The acquisition of the Ericsson headquarters and the Siemens Evosoft headquarters will complement and further strengthen our portfolio of green offices in EWC,” adds Ariel Ferstman, CFO at GTC.
“These two properties with a combined NOI [net operating income] of 8.9 million euros will contribute significantly to our FFO [funds from operation] generation. Our objective is to finance the acquisition with our own funds combined with bank financing and green bonds issued at the end of 2020 and the beginning of 2021 ”, he explains.
The sale is part of developer Wing’s strategy to focus on expanding its business operations, real estate development and investing activities in the region, according to the company.
Long term value
“Wing aims to create world-class buildings that provide an inspiring environment for its partners while creating long-term value. Ericsson headquarters, completed in 2018, and adjacent Evosoft headquarters, handed over in late 2020 [and officially opened on April 27, 2021], are perfect examples of this ambition, ”says Noah Steinberg, Wing Chairman and CEO.
“Both buildings are environmentally friendly and LEED“ Gold ”certified; they are among the most innovative office buildings in Hungary and they are new landmarks on the banks of the Danube in Budapest, ”he notes.
“The transaction of the Ericsson and Evosoft headquarters buildings is part of our company’s growth strategy in recent years, which aims to become a major market player in the international real estate market. Therefore, we are focusing our activities on regional expansion as well as on our real estate development and investment activities, ”explains Steinberg.
GTC is a fully-fledged office developer in Hungary and the entire Central European region. Its current portfolio of offices in this country includes Duna Tower, Váci Greens D, Center Point I and II and GTC Metro. The company is also developing the 29,000 m2 pillar which is expected to be completed in the first quarter of 2022 and will become the headquarters of ExxonMobil.
Colliers places the Budapest office yield at 5.25%, compared to 4.25% in Prague and 4.7% in Warsaw, as Budapest continues to offer attractive returns for high quality products.
The office sector dominated CEEC investments in the first quarter of the year, accounting for 50% of the total volume of investments. Although the logistics and residential sectors continue to attract strong investor demand, they are held back by a shortage of products.
This article first appeared in the print issue of the Budapest Business Journal on May 7, 2021.