"French real estate specialist Klépierre has agreed to acquire from Futureal Real Estate Holding Ltd. a project to build a shopping centre in the latest major development opportunity in downtown Budapest. The company will invest an estimated EUR 229 million (HUF 59 bn) into the project.The project is part of the Corvin Promenade Project, currently the largest city centre regeneration effort in Central Europe, home to the renowned Corvin Theatre, which has been recently transformed into a cinema.
The project spreads over 22 hectares and also includes 2,800 new apartments and the largest city centre office development in Budapest with 150,000 square meters of new office space including scientific R&D hub and 10,000 square meters of new public space with 20,000 square meters of leisure area around it.
Located in the heart of a transportation hub including metro and tram stations, i.e. a point of passage for more than 350,000 people each day, the shopping centre is spread over 34,600 square meters of rental space distributed over four levels, including one devoted to a food and entertainment court. The centre will also include nince mid-sized retail units, a supermarket and an underground parking lot offering 1,200 slots on three levels, Klépierre said in a press release on 5 September.
After the definitive building permit was obtained, Klépierre acquired the land parcel and signed a design and construction contract with the seller for the works achievement.
Ségécé Hungary is in charge of lease-up. The work commenced in August, with delivery expected in the third quarter of 2009.
Klépierre will invest an estimated EUR 229 million in the project, including the finance charged carried until the opening date, of which the sum of EUR 111 m has been outlaid.
“Net rent of around EUR 14 m is expected, a conservative estimate that leaves room for probable improvements given the centre's expected appeal and its very strong competitive positioning," Klépierre added.
“This particular transaction is part of a larger bid to expand own-account development business at the international level, which was announced at the beginning of the year. It enables Klépierre, which has the requisite human resources, to get in on projects upstream and participate in their definition, in order to guarantee optimal lease-up and an improved profitability profile," the company said.
With a workforce of 1 060 people, Klépierre leases and manages the real estate assets in its portfolio as well as on behalf of third parties. At the end of June 2007 it owned real estate assets valued at EUR 10 billion. Shopping centres represent in value 86% of Klepiérre's portfolio as of 3 June 2007 versus 51% as of 31 December, 2000. "
Source:
Portfolio Online Financial Journal
07.09.2007