Large-scale restructuring processes in the urban space of Budapest

Deli Point Private investor n.a. 2003 7.000 10,0 9,15R70 CA Immo Austrian 2003 17.000 30 10,0Alkotás Center, District Private individual UK Q4 2003 3 300 5,0 8,9XIIRetail portfolio of 4 Pricoa US Q4 2003 36.000 51,6 Below 9stores in CZ and HElectro World (2 stores) Pricoa US Q4 10.000 13,0 9,52003Globe 13 and Árpád Immofinanz Austrian Q2 2002 20.000 40,0 – 42,0 9,35CenterUnilever building Immorent (Erste) Austrian Q2 2002 n.a. 15 – 20 9 – 9,5Compaq building HVB German Q2 2002 n.a. 5 - 6 10,5 – 11West End Business PBW Fund German Q1 31.000. 69 9Center2002Kálmán Imre u. Redevco NL Q1 n.a. 9 - 10 9 – 9,52002Source: Colliers, DTZ *if otherwise not indicated the list contains office projectsInvestment activity in the Budapest market over the past year has been dominated by a few “vehicles”created specifically for investment in Central Europe. These include the Polonia Property Fund,controlled by Allied Irish Bank, with shares also held by the European Bank for Reconstruction &Development (EBRD) and Immoeast. The Fund acquired NCC’s Obuda Gate for around EUR29million in Autumn 2003; the scheme was 85% let at the time of the sale and the deal reportedlyinvolved a one-year rental guarantee on the vacant space. This was followed by the acquisition ofSkanska’s East-West Business Center for EUR42 million in Q1 2004. Austria’s Europolis(Investcredit and EBRD) acquired the remaining 50% of City Gate in 2003, and was also involved inan AIG-Lincoln portfolio purchase. The latter deal totalled EUR150 million and included two logisticsparks as well the forward purchase of the IP West office project; the overall yield on the deal wasreported to be around 10%. German funds were active in the market in 2002, but much less so during2003, although there has been some recent involvement from domestically-based investors (e.g. OTP,Europa Alap and Raiffeisen).Other important transactions included the sale of the portfolio of Airport Business Park and and M1Business Park by developer AIG/Lincoln at initial yields of 10%, the sale of Pharmapark (14.300 sqm)and Henkell & Schönlein (10.800 sqm). On the hotel scene in 2002 the 148 room Art Hotel inBudapest was reported to be sold at a reported yield of 8% to a Belgian based fund. The building isunder 20 years lease to an international operator. In 2003 Immorent (a subsidiary of Austrian ErsteBank) has purchased five hotels from Accor Pannonia Hotels all of which have been leased back toAccor on a 20 years term. The transaction volume was reported to be some 88 million EUR.During recent years German funds have shown the most interest (BfG, DESPA), in 2003 Austrianfunds increased their activities and there is growing interest from Irish and overseas investors. Thereare three larger domestic funds of which OTP Ingatlan (portfolio value of 69 million EUR) andRaiffeisen (62 million EUR) are the most important, whereas Europa Alap started by local investorshave been taken over by HVB recently.6.3 Civil organizations in urban development: environmentalists and conservationistsAs some environmentalist groups played an important role in the preparations for the political changesin the late 1980s, their role has remained relatively strong after 1990 too, as compared to other formerstate socialistic countries. As a great number of their members, intellectuals as architects, urbanplanners, engineers, sociologists, writers etc. joined to the new libertarian party, a leading personalityof which has continuously been the mayor of Budapest since 1990, their relations to the developmentof the city processes became rather ambiguous later. In the first years after the changes an “antiplanning”attitude prevailed among the leaders members of the Municipal Government of Budapest.On the other hand, in the two-tier local government system of Budapest, the municipal government’s45