Investment transactions took off in Hungary last year, with the highest volume of trading seen since the market’s high point in 2007. JLL writes that €790m worth of deals was completed in 2015, of which 60 percent came from the closing of portfolio transactions as large investors focused on platforms that would bring them significant exposure to the market in a hurry.
JLL puts the activity down to a variety of factors including improved fundamentals (primarily occupier demand and falling vacancy rates) and a deepening pool of potential buyers (overseas buyers, Hungarian real estate funds and ‘exotic private money’).
JLL puts prime office yields at 7 percent at the moment, the same as for prime retail assets, while prime logistics can now be had for 8.75 percent. “In our opinion, interest for Hungarian assets will increase further in 2016,” said Benjamin Perez-Ellischewitz, Head of Capital Markets at JLL Hungary. Domestic buyers (local real estate funds, the Hungarian National Bank) and overseas investors will drive most of the activity and liquidity will remain high in every asset class. Although several property portfolios were already transacted in 2015, we expect further large platforms to be sold in 2016 as well as large ticket landmark buildings. The market witnessed increasing activity on the transaction of claims and we expect the secondary debt trading to remain an essential part of the activity in 2016.”
