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British company plans to open hotel in Budapest

UK-based Abraxus has acquired, through its new Hungarian wholly-owned subsidiary established for this purpose, First AB Kft., the freehold interest in a building in a central Budapest location with a view to converting the building to an 80-100 room hotel, Abraxus said in a stock exchange statement. The property was built at the end of the 19th century and has approximately 5,409 sqm floor space. The acquisition costs amounted to approximately ?960,000 plus ?170,000 VAT, which is recoverable in due course. The company estimates that total further investment required for conversion of the building will amount to ?6 million plus VAT. The acquisition will be financed through Abraxus?s existing cash resources, while the development costs will be covered through bank finance in respect of at least 50% of the total costs and the balance through a further share issue. The company expects the hotel to be ready for commissioning in about two years. The building is located at Podmaniczky u. 45. in Budapest, 6. is in a busy street on the Pest side, on the corner of Vörösmarty utca and Podmaniczky utca. It is close to the Nyugati railway station and WestEnd City Center, in Dist. 6. At present, the property has a valid building permit for a 115 room hotel.