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Government-friendly contractor gets prime real estate for bargain price
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A businessman known to be a close friend of the reigning prime minister is building a house on a valuable piece of land in the hilly area of Budapest, where buildings can boast an exquisite view and accordingly, the prices are sky high. However, in this case, the area in question went to its new owner at what may well be a fraction of its realistic price.
The Budapest asset management agency BFVK decided in December, 2012 to sell a 1,620-square-meter plot of highly valuable land in Budapest for HUF 376 million (€1.2 million) based on an in-house value assessment. The plot, which has a unique view of the Budapest landscape and is surrounded by luxury property on all sides is currently seeing contruction by a company owned by Lőrinc Mészáros, one of the biggest beneficiaries of the reigning Fidesz government’s rules, as Atlatszo.hu reported before.
Since the decision was made public we have looked at property prices in the area several times and it soon became clear that the amount BFVK charged was well below the market value. We found a top-tier house built in the area valued at up to HUF 1.9 billion (€6.2 million), but many other assets are also on the market for twice what the Mészáros site went for and even a run-down building in the area is offered at almost what the plot in question was valued at.
We asked a property expert. He put the value of the plot at HUF 500 million (€1.6million), adding that the valuation should have in any case been performed by a contracted expert rather than BFVK’s own people. He stated it is clear that during the assessment, the value was adjusted downwards and that BFVK clearly ignored the unique view and the proportional leap in value once a building is standing on the plot when determining the sales price. This confirms that once Mészáros finishes construction, the property will be worth several times what was originally paid to the city.
The original article was published on 4 November 2014 in Hungarian.