(Bloomberg) — The concrete and glass office complex next to Budapest’s City Park was a bet on the post-pandemic revival of commercial real estate. But Hungary’s lackluster economic recovery and rampant inflation led to plummeting demand, and the development seemed destined to lose money.
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That was until Prime Minister Viktor Orban intervened.
A fund linked to Orban’s son-in-law, Istvan Tiborcz, agreed to sell the buildings to the government, according to documents obtained by graft watchdog Transparency International and seen by Bloomberg. Now, investigation into the transaction has become the latest weapon for Orbán’s new political opponent.
Opposition leader Peter Magyar, Orbán’s biggest political challenger in more than a decade, called the investment an example of the kind of cronyism that has pushed Hungary to the bottom of Transparency International’s corruption rankings among EU member states.
The office complex, called Durer Park, is one of three locations in Budapest where the government is purchasing commercial real estate for a total area several times the size of the Hungarian national football stadium. Magyar estimated the total price at as much as 650 billion forints ($1.8 billion). The government declined to comment on what it paid for the developments.
Orban’s government says the investments will improve working conditions for state employees who have limited work-from-home privileges. They are also intended to reduce costs associated with inefficient and outdated buildings that currently house many ministries and agencies.
In a statement to Bloomberg, the Economy Ministry said the deals were “beneficial,” while Minister Gergely Gulyas told reporters in June that the investments would break even in about a decade. It was “irrelevant” who the sellers were, he said.
The opposition is using the investment as a form of largesse to the prime minister’s own family, at a time when Hungary is raising taxes and cutting spending elsewhere to rein in years of fiscal profligacy.
Magyar has boosted public opinion by protesting alleged corruption and mismanagement after 14 years of nationalist rule. His Tisza party is neck-and-neck with Orbán’s Fidesz in the latest polls ahead of the 2026 general election.
“Why did he buy from his son-in-law, Istvan Tiborcz, completely unnecessary office buildings for 650 billion forints, while the government announced a 130-point austerity program that affected healthcare, education and culture?” Magyar asked during an interview with state television on September 26.
The deal is part of a series of major government purchases, including an 80% stake in Budapest Airport earlier this year for around €2.5 billion ($2.7 billion). Last year, the government provided more than $1 billion in loans through state-owned banks for 4iG Nyrt., a company Orban wants to become a national telecom champion, to take over Vodafone Plc’s local operations.
Under Orban, Tiborcz has become one of the richest people in the country with a string of luxury hotel deals.
BDPST Zrt., Tiborcz’s investment vehicle, said in a statement to Bloomberg that the fund that owned Durer Park has an “independent management” that makes decisions autonomously.
Orban has been repeatedly accused of cronyism and has repeatedly denied influencing business deals. Concerns about corruption have contributed to the continued withholding of 20 billion euros in European Union funds.
“I am not involved in business deals,” Orbán told a press conference at the European Parliament this month, where he was castigated by European Commission President Ursula von der Leyen. “How and who completes a project is not a matter for the government and I do not want to have to deal with it.”
Durer Park is the smallest of the three office projects, costing 120 billion forints, according to news website 24.hu, which first reported the purchase earlier this year. It is where the Ministry of Economy plans to move some of its people and where the headquarters of a number of state lenders are under control.
It consists of two office buildings with green roofs and 207 apartments built with environmental sustainability standards in mind, according to Granit Asset Management, which manages the private equity fund Fonix that owns the property.
Granit Asset Management is part of Granit Bank, which is owned by Tiborcz’s BDPST, according to public records.
“This was a speculative investment, i.e. there was no provisional rental or sales contract,” the asset manager said in a statement to Bloomberg. It reiterated that its decisions are made independently of the owners. The office buildings were sold at a “realistic market price in a regional comparison,” the report said, without disclosing the costs.
The other two locations are less central. One of them is located in a new district at the southern tip of Budapest, on the banks of the Danube, in which Fonix also has an interest. The landscape is dotted with cranes hanging above modern high-rise apartment buildings, including the recently inaugurated 28-story headquarters of energy company Mol Nyrt. towers high above the area.
The third is close to where the government plans a €5.8 billion Dubai-style interchange in a redevelopment of an area around dilapidated railway lines. This is destined to become the new headquarters of the Tax Authorities.
The reported square meter prices reflect the costs of smaller, prime commercial real estate in central Budapest. According to central bank data, office vacancy in Budapest increased by two percentage points to 13% in 2023, the highest level in nine years.
For Durer Park, the initial price tag of 100 billion forints was eventually increased by 20% to take into account the EU’s highest inflation in Hungary last year, 24.hu reported. The Economy Ministry told Bloomberg that the price increases were justified by tailor-made housing arrangements for state-owned banks.
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