Cbank foundations buy plots in Budapest business district

Budapest, September 5 (MTI) – Foundations run by Hungary’s central bank have purchased plots of land in a Budapest business district for 55 million euros.

Fully 200,000sqm of office and residential space can be built on the combined seven-and-a-half hectares, Zoltán Fekete, the head of Optima Befektetési, which manages the foundations’ assets, told a press conference on Monday. The plan is to build 150,000sqm of office space and complement it with stores and homes, he added.

Optima aims to attract financial companies with headquarters in the United Kingdom looking for new European headquarters following the country’s vote to leave the European Union, Fekete said.

The properties were purchased from Redimmocorp and Soinginvest last week, he said.

Whether or not a tender will be called for the development of the property depends on planning. Consultations with the public procurement authority are ongoing.

The acquisition is part of the process of moving the foundations’ assets out of government securities, in line with observations made earlier by the European Central Bank, he said.

The foundations’ holdings of government securities have fallen from more than 200 billion forints (EUR 645m) to 155.3 billion, while their assets in real estate have risen from 6.8 billion to 70.8 billion. The foundations have an additional 20.7 billion in bank deposits and 21 billion in equities.

The foundations will borrow 120-130 million euros to develop the Váci út properties as well as the recently acquired Buda Palace on Széll Kálmán Square. The consortium financing the projects may include banks that have not done business in Hungary until now.

Private equity investors could finance the projects, too, Fekete said, noting interest shown by Western European and Asian property funds.

Source: MTI