The redevelopment of Krausz Palota is underway
The Krausz Palota on Andrássy út in the center of Budapest.
Having obtained a heritage permit, the renovation of the classic Krausz Palota by Avison Young began with the aim of redeveloping the 130-year-old building into a boutique office building.
Krausz Palota (or Andrássy út 12) is a World Heritage Site built in 1885 based on plans by architect Zsigmond Quittner. The complex was initially renovated in 2002, meeting the historical standards of the art of the time.
This much more extensive renovation, designed by BORD Építész Stúdió, will offer 4,600 m² of class “A” offices over five floors, according to development plans.
“Managed by AEW on behalf of institutional investors and locally managed by Avison Young, the building will be renovated to become one of the most modern and exclusive office concepts in the city center, focused on meeting the high expectations of tenants in terms of aesthetics and comfort, while preserving the illustrious building for future generations, ”said Avison Young.
“The renovation will be completed in accordance with best sustainability practices vying for an ‘Excellent’ rating on the BREEAM International None-Domestic Refurbishment sustainability rating,” adds the global Toronto-based commercial real estate services company.
EBH Invest, the general contractor, has now started the demolition work and is expected to complete the project by the fourth quarter of 2022.
Part of a UNESCO World Heritage Site, the area is historically protected, which significantly limits the potential for commercial development and establishes a clearly defined central business district. True Class “A” offices are extremely limited, and only a handful of assets are of sufficient size or have floor plates suitable to accommodate large-scale buildings or corporate headquarters.
“We are delighted that a building like this, which defines Andrássy út and its turn-of-the-century architecture, is reborn as a modern office palace and takes its rightful place in Budapest’s most attractive district,” comments Jake Lodge, director of Avison Young Hungary.
“In addition to managing such a building, it is a remarkable task to oversee the renovation to meet the expectations of the biggest companies in Budapest. It will be targeted as a boutique office building offering top-notch office space in a historic setting located in the upscale Andrássy út neighborhood, ”adds Lodge.
The commercial redevelopment has contributed to the rebirth of the city’s infrastructure, enabling the renovation and preservation of listed buildings in the historic center and improving the atmosphere and appearance of Budapest.
However, permits and development can be extended in this area of the city, which has a deterrent effect on developers and investors.
The total modern office park in Budapest now stands at almost 4 million m² according to the Budapest Research Forum, made up of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary.
The new supply expectations for 2022 represent a considerable area of 276,000 m², as several projects scheduled for this year have been delayed, CBRE said. There is currently around 450,000 m² of space under construction, according to the consulting firm; Cushman & Wakefield places the projected pipeline at 356,000 m².
This article first appeared in the print issue of the Budapest Business Journal on December 3, 2021.