German Pension Fund Buys Office Building in Budapest

GalCap Europe, the real estate asset and investment manager specializing in Austria and Central Europe, has acquired another asset in Budapest for a German pension fund’s portfolio: the Rumbach Center.

Rumbach Center now expands the existing CEE portfolio within the investor's specialized fund structure, which is under the administration of 2IP Institutional Investment Partners. It was sold by Dubai-based Al Habtoor Group, one of the MENA region’s most respected conglomerates with interests in hospitality, automotive, real estate and education. The deal was brokered by Colliers in Hungary.

Rumbach Center (built in 1992; renovated in 2008 and 2014) is located in District 7, in the downtown of the Hungarian capital, within walking distance to Deák Ferenc tér, the main junction of the Budapest metro lines. With approx. 7,600 sqm of gross lettable space and 72 underground parking spaces, the property is entirely leased to the Budapest Public Transport Authority BKÜ/BKK, which is headquartered there, a press release by Colliers International says.

Marco Kohla, Managing Partner of GalCap Europe and responsible for the transaction, said that "Rumbach Center provides a stable cash flow on the one hand and offers high potential for value appreciation on the other. As the rent of the current single tenant is very moderate, there is room for rental growth in the midterm. The acquisition perfectly matches our value-driven investment strategy and is an ideal addition to the inner-city palace Merkur Palota and Central Udvar, a mixed-use scheme in the heart of Budapest, both cornerstones of the fund."

Manfred Wiltschnigg, Managing Partner of GalCap Europe, added that "closing this acquisition in the current environment shows that there are great opportunities even during times of uncertainty. Identifying these and executing them promptly needs market expertise and the right people on the ground. COVID-19 has further reinforced our approach." GalCap Europe is continually evaluating new investment properties and further acquisitions are underway.