GTC Hungary’s seals landmark deal, purchases Duna Tower
Riding the wave of the rejuvenated Hungarian real estate market

In a deal that further confirms the market’s renaissance, GTC Hungary has completed the acquisition of the landmark Duna Tower, an iconic office building that dominates the skyline of Budapest’s Váci Corridor office zone. GTC recognizes the enormous potential of the soaring Hungarian office market, and fully expects to lease Duna[RS1]  Tower, the city’s tallest Class A office building within a short period.

“The office market in Hungary revived a few years later than other countries’ in the region, but investors can still catch the wave. Now there is renewed interest on the Hungarian market for large, premium category office space, which opens room for maneuver on the lessors’ side,” says Robert Snow, Managing Director of GTC Hungary.

Inaugurated in 2006, the imposing 60-meter-high office tower stands on the Pest side of Árpád Bridge. It has 16 floors, a total of 31,500 sqm of gross leasable area and a 3-floor underground garage with nearly 400 parking spaces. The commanding building sits on the edge of the Danube and the tenants have  fantastic views to the City and Margaret Island. Access to the building via road and tram from the Árpád Bridge and the M3 Metro is only two minutes walk.  Downtown Budapest is a five-minute car journey.

This purchase takes GTC Hungary’s total office portfolio to over 118,000 sqm of leased area and maintains the companies profile as one of the most serious and sustainable international real estate developers and investors in Hungary. The portfolio includes Category ‘A’ Budapest office buildings; Center Point, GTC Metro and Spiral.

Robert Snow ranks the purchase of Duna Tower among the most important steps in the history of the company, which has been active on the local market since 2000. The deal, which was concluded in a formal tender process, was financed wholly from GTC’s own resources and is the largest Class ‘A’ deal this year to date in the market.

“A lack of Class ‘A’ space for large occupiers creates a window of opportunity for developers,” says Orsolya Hegedűs, MRICS Head of Research at Cushman & Wakefield.

She adds that occupier activity was buoyant in Q1-Q3 2015, pushing the vacancy rate down to 13.5% of total office stock in Budapest, and that 2015 could be another record year for take-up. “The key challenge is stock; there is very little in the imminent pipeline to meet ever increasing demand – much of which is focused on the very best in class.  As the market continues to swing in favor of landlords, tenant incentives continued to shorten for the best space, increasing effective rents. We predict positive rental growth in the most preferred submarkets of large occupiers.”

It is against this positive background that GTC views full occupancy as imminently attainable for Duna Tower which is currently just over 81% leased.  GTC intends to implement a full re-positioning of the asset including technical and aesthetic modernization to meet the exacting demands of existing and future premium tenants.

GTC Hungary eyes expansions
GTC Hungary is a wholly owned subsidiary of the Globe Trade Centre S.A. a Polish public company traded on the Warsaw stock exchange.  Since Lone Star Funds, became the majority shareholder of GTC S.A. the company has successfully raised the capital by 140m euro which has significantly increased GTC’s financial muscle and opens up new horizons in Hungary and the wider CEE region. The company can effectively and efficiently manage its existing real estate portfolio while also forging ahead with new developments and purchases of market leading Category ‘A’ office buildings.

Says Robert Snow, “GTC Hungary has always been present in the market, successfully sitting out the years of financial crisis, but now the time is ripe to start competing again with renewed vigor and to become one of the key players on the domestic real estate market.

GTC Hungary
Formed in 2000, GTC Hungary is one of the pivotal commercial real estate companies in Hungary, and a member of the Globe Trade Centre S.A. from Warsaw. The company has previously developed three major office buildings in the capital, offering 88,000 sq m of GLA, and was also responsible for three major residential projects comprising over 900 apartments. Today GTC Hungary owns three office buildings in Budapest and manages one in South Buda.

Globe Trade Centre S.A., Poland
The GTC Group is one of the leading commercial real estate companies in Central, Eastern and Southern Europe. Since 1994, the Group has been developing high-standard, modern office and retail properties through CEE region. Today, GTC actively manages a portfolio of 33 commercial real estate projects providing approx. 613,000 sq. m of office and retail space to its highly demanding tenants and customers in Poland, Serbia, Hungary, Romania, Croatia, Bulgaria, Slovakia and the Czech Republic.  GTC S.A. is listed on the Warsaw Stock Exchange’s WIG 30 index. The company’s shares are also included in the international indexes: Dow Jones STOXX Eastern Europe 300 index, GPR 250, which comprises the 250 largest and most liquid real estate companies of the world and the FTSE EPRA/NAREIT Emerging Index. 

Further information:
Bori Gedai
Sales and Marketing Director
GTC Real Estate Development Hungary
Tel: +36 1 412 3699
Mob: +36 70 930 8578
Email:  bori.gedai@gtc.hu