The View 9

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Annual CRE Investment Volumes in Hungary

Source: CBRE Research

Looking ahead, loose monetary conditions and seemingly brightening economic sentiment in the Eurozone continue to fuel investor appetite, while record strong local market fundamentals and a considerable amount of new product coming to market present ample investment opportunities. Hence, CBRE expect the 2020 investment volume to largely match or even exceed that of the last few years, with a range between EUR 1.7-1.9 billion looking realistic. The second half of 2019 saw the sectoral breakdown along the usual lines, with offices attracting the highest share (42%) of the investment volume, followed by retail assets (38%), hotels (13%) and industrial properties (7%). However, the full-year 2019 turnover split was more dominantly led by offices (49%) followed by retail (28%), and for the first time in five years hotels (15%) overtook industrial properties (8%). The uptick in hotel investment activity has been expected for some time and is likely to sustain into 2020 as well. The office sector once again enjoyed a busy H2 period with 14 transactions at a combined volume of EUR 485 million, though this reflected a 19% y/y drop from the rally a year earlier. The period’s largest office transaction was OTP REF’s acquisition of the Roosevelt building in the heart of the CBD, which marked the largest deal on record for a single office building in Budapest while setting a new record-low yield level. Another significant office deal involved the recently delivered Corvin Technology & Science Park building, also purchased by OTP REF as a follow- through from the Corvin office portfolio trade a year earlier. Interestingly, the period also saw the forward-sale of a vacant new development in the form of Váci Greens E, which got purchased by a local private fund. Some international buyers were also active, as CBRE Global Investors returned to Budapest with the purchase of Corner6 Business Center and JR AMC acquired the Nordic Light Trio development as the first local investment backed by South-Korean capital. The retail sector bounced back in H2 after the unusually quiet start to the year. The sector saw eight deals that produced a combined volume of EUR 440 million, yet this still fell 31% short of the volume in H2 2018.