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The new urban landscape

Portrait

CA Immo group was founded in 1987 and has been quoted on the Vienna Stock Exchange since 1988. Its shareholders are 50% private investors and 32% institutional investors, while the remaining 18% is held by the Unicredit Group. It has been one of the leading property investment companies in Central Europe virtually since the beginning.

It also acts as a project developer on its market and thus covers the entire value chain from site development to project and construction management to the letting and sale of completed properties. Its activities in Eastern Europe, including Hungary, date back to the late 1990s.

Today, CA Immo is represented through offices and subsidiary companies in Germany, Austria, Poland, Hungary, the Czech Republic and Romania as core countries. Central and Eastern Europe remain the focal point of its property portfolio, which is currently worth approximately 3.8 billion EUR. Over half of this property is located in Eastern Europe with 19% in Austria and 29% in Germany, where activities also include the development and construction of properties completely tailored to tenant’s requirements.

In this area, the company can refer to the strong inhouse development expertise of the CA Immo Group. Activities in Hungary started in earnest in 2004 with the launch of a major programme of investment that saw the acquisition of six office buildings in Budapest in the course of about five years and a retail center in Győr. In 2011, CA Immo Hungary bought Europolis with its portfolio of three office complexes and two logistics parks.

Today, CA Immo’s property portfolio is worth 392 million EUR and covers a rentable area of 300,000 m2. Of this, 160,000 m2 is devoted to office space, 120,000 m2 to logistics and 20,000 m2 to retail. “We are office space specialists at heart and are working to create a portfolio of high-value, high-quality office complexes with the potential to become urban landmarks,” says CA Immo Hungary’s Managing Director Ede Gulyás. “We want to focus on large or medium-sized office complexes in favourable locations and intend to dispose of the smaller buildings in our portfolio as part of that longterm strategy.”

The age of the building also influences the rental price it commands. One of the older properties in the portfolio, a 20-year-old office building was recently refurbished to ensure that it continues to justify the rents charged. CA Immo’s reputation depends on the quality of its portfolio, and it keeps a close eye on ensuring that buildings are maintained and renovated as required. As a result, the company enjoys a good rate of occupancy. Across the portfolio, 50% of office buildings enjoy almost 100% occupancy.

In general CA Immo is above average for the sector, a fact that can be attributed to the quality of the spaces offered and their prime locations. Another advantage enjoyed by CA Immo is the broad service portfolio offered in support of its properties. More than 20 people are employed in the Budapest office, which offers property management, asset management, leasing management and building management as well as financing and accounts management.

“This complex portfolio of services is unique in the Hungarian market and means that we do not need to make use of external providers,” says Mr. Gulyás. “The only service we outsource is facility management.” Rental income from the company’s properties reached 29 million EUR in 2013, representing 10% of CA Immo group’s total revenues. “Overall company strategy is dictated by the parent company,” says Mr. Gulyás. “We make suggestions, but the final decision rests with the head office.”

One of the latest additions to the company’s property portfolio in Hungary was Capital Square, which was acquired in 2009. Capital Square is one of the most prestigious office building in Budapest, with modern architecture and a top location. It holds Lead Gold status, as does the R70 Office Complex, which is among the oldest properties in the portfolio.

“Both of these properties represent the premium end of the office rental market in Hungary and are the type of property that we want to make the dominant part our portfolio,” describes Mr. Gulyás. “Buildings such as these attract the large multinationals such as IBM, CEMEX, BP, Transcom and NSN as well as international embassies such as those of Canada and Sweden.”

At present, the portfolio also includes the City Gate office building, featuring bright offices and a central green space for workers to relax in; the IP West office complex, which is almost fully occupied; and Bartók Ház, which enjoys 100% occupancy. The Viziváros Office Center and Canada Square office building round off the impressive portfolio.

The success of CA Immo in the Hungarian market has cemented its reputation as an investor in the country’s infrastructure. It attracts a great deal of press attention for the work it does and the success this has brought.

“Our investment focus lies in finding properties with long-term potential that offer an attractive setting for tenants, with a good location close to amenities and transport networks,” explains Mr. Gulyás. “We work closely together with tenants to ensure that their needs are met. The market has lost some of its buoyancy in recent years, and good tenants are hard to find. Our aim is to ensure that our existing tenants have no reason to go elsewhere. In the meantime, we will continue to invest in properties that have potential for the future.”

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