MTel to sell Budapest offices, move to new headquarters

Office Market

Magyar Telekom said yesterday that it will sell its three main Budapest office buildings to WING Group and sign a long-term lease with a developer, which will build its new headquarters, Hungarian news agency MTI reported.

In addition to its three main buildings, MTel said that it will also sell 5-7 smaller buildings, adding that the new headquarters will be 35,000 sqm smaller at 55,000 sqm. MTel and WING agreed to a forward sales contract for the three main buildings that will result in cash inflows of €6 mln in 2015, €9 mln in 2016 and €45 mln in 2018. Additionally, Magyar Telekom will realize approximately HUF 4 bln in related profit in 2018 through the selling of the office buildings which form part of the transaction.

The reduced costs of operating the new premises will be partly offset by the increased rental costs, resulting in an overall annual negative EBITDA impact of less than HUF 800 mln from the second half of 2018, when the new headquarters are completed. Following the fulfillment of the transactionʼs preconditions, the agreement should take effect in the fourth quarter of 2015, MTel said.

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