Skanska sells Budapest office building to South Korea’s JR AMC

Swedish real estate group Skanska has sold its Nordic Light Trio office building in Budapest to JR AMC, a South Korean real estate investment trust, in what is its first office investment in Central Eastern Europe.

“This is further proof that Asian investors have a positive sentiment towards Europe and actively search for new investment opportunities on our continent,” said Adrian Karczewicz, head of divestments at Skanska’s CEE commercial development business unit.

According to Colliers International, between 2017 and 2018, the inflow of Asian capital investment into the CEE region amounted to approximately 2.6 billion euros, focused mostly on the industrial, retail and office sectors.

“On the one hand, they find CEE countries attractive thanks to the political and economic stability that they offer, which is additionally guaranteed by being part of the European Union. And on the other, prospects for the region are also promising with return on investment is higher than in Western Europe. Asian investors are mostly interested in A-class properties developed by institutional developers, and Skanska is many times the first choice for all the newcomers,” he continued.

Nordic Light Trio comprises a total leasable area of approximately 14,000 square meters and 221 parking spaces.

“With yields in Western Europe breaking historic records, our interest is to constantly explore new markets whereby we can achieve high yields, simultaneously minimising any trade-off in building quality or macro risk profile,” said Hyon Suk Jang, executive managing director of foreign investment at JR AMC.

“In the case of Budapest we have been following the market for the past year and a half with high interest. Considering both macro/micro economic figures and also the trend of the real estate market in Hungary, we are convinced of the significant potential for further growth,” he added.