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TriGranit sells stake in Budapest office development to Heitman

Deals

Hungary’s TriGranit has sold a 74% stake in four properties at its Millennium City Center development in Budapest to the American investment group Heitman European Property Partners IV for almost HUF 45bn, chairman Sandor Demjan said at a press conference on Tuesday.

TriGranit still holds a 26% stake in the office buildings and will manage them, Mr Demjan said.

TriGranit said the sale of the stake in the combined 70,000sqm of office space was the biggest property deal of the year. The purchase raises the value of all transactions on Hungary’s property market by about 50%.

Answering a question, Mr Demjan said TriGranit had offered the land on which to build a congress centre in the Millennium City Center in 2003 for a token price of 1 USD, but the government at the time had turned down the offer. The offer no longer stands, but if a congress centre is not built at the site, TriGranit is considering building homes, he added.

TriGranit has grown into a multinational company based in Hungary in the 14 years since it was established with seed capital of USD 2m, Mr Demjan said.

The company finances one-third of its investments with its own resources and two-thirds with financing from banks, he said. TriGranit is paying off its loans and its stable operation will continue in the future, he added.

Mr Demjan called a government moratorium on the construction of big stores and shopping centres was a mistake that forced TriGranit to take its plans for Hungary abroad, to cities such as Bratislava.

He said TriGranit would put the HUF 45bn purchase price from Heitman back into developments.

TriGranit has cancelled a project in Moscow and is renegotiating one in St Petersburg, but its joint venture with Gazprom is operating well, he said. The company has been asked to carry out projects by several Hungarian cities, he added.

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