Cautious banks, late investment bolsters figures

Based on the latest investment market report of Colliers International Hungary, the total investment transaction volume in Hungary in 2011 was €650 million, in comparison to 2010 when the value of investment transactions was less than €200 million.

“H1 2011 saw an increased number of transactions from 2010, but it was in H2 2011, where two large benchmark office transactions occurred helped to boost the overall annual transaction figure.” – said Marcus Hill, Investment Director of Investment Services at the Hungarian office of Colliers International. Four core deals transacted in Hungary in H2 2011 including the sale of an OBI retail property in Budapest (€15 million), the Raiffeisen back office building (€27 million) and two landmark office deals in the last few weeks of 2011. Heitman European Property Partners acquired a portfolio of offices from TriGranit and Aviva in two separate deals exceeding €100 million each.

2011 saw increased interest in prime retail properties and single-tenant big-box units that were seen as safer investment prospects in the current environment. “Securing financing remained difficult in 2011, and this is not expected to change until the economic outlook for the country improves.” – said Marcus Hill.  2012 will have a rough start as market players adopt a wait-and-see attitude until the country’s negotiations with the IMF/EU conclude. The investment sentiment could improve, once ongoing government talks with international institutions (EU and IMF) come to a resolution hopefully in H1 2012.

“The two Heitman deals in 2011 were encouraging with respect to investment prospects in Hungary. This level of investment may help lead the way for other cross-border institutional investors to return to the market this year. Banks may increasingly be motivated to sell their real estate assets in 2012, helping to drive investment volumes.” – summarized Marcus Hill.