Company tied to Orbán’s son-in-law buys a historic building under market price, turns it into a hotel

Situated in Vámház boulevard, a prime location of central Budapest, a historic building has been owned by the same company, TIG Nkft since 2009. However, TIG has made huge losses and was liquidated – during the liquidation, the Vámház körút property was acquiered by a company owned by an equity fund connected to István Tiborcz, son-in-law of Viktor Orbán, who is converting it into a 36-room hotel.

In the 5th District of Budapest, a plaque was recently placed on the large building, a historic heritage site closed to some of the city’s most popular tourist destinations. The sign states that the building has been under renovation since October 2024, ordered by the Estoril Property Kft. The company is owned by Central European Real Estate Fund. Via the fund, the developer is linked to Prime Minister Viktor Orbán’s son-in-law István Tiborcz.

Prime location

The property has three addresses in the register: 2 Vámház körút, 6 Fővám tér and 1 Só utca, as it is located at a transport hub. It is located opposite the “Great Hall” (officially known as the Central Market Hall), directly adjacent to Fővám tér and beyond it the left end of the Szabadság bridge. On the other side of the bridge, on the Buda side of the Danube, is Szent Gellért Square and the Art Nouveau-style Gellért Spa (built in 1918) (and next to it the Gellért Hotel, which was bought by a company owned by István Tiborcz in 2022). In the opposite direction, one can easily reach three of the most popular downtown sites, including the Parliament in around 10-20 minutes on foot or by public transport.

Thus, the location of the property is excellent from a tourist’s point of view. And according to the project sign at the gate of the property the building is now being converted into a 36-room hotel.

Hidden development

The construction – and even the fact that the building is now owned by the new company – only came into public view now due to a recent legistlative change. At the initiative of the Minister of Construction János Lázár, the electronic building authority system (ÉTDR) is no longer public since August 2024.

This means that no details of the projects will be available to the public apart from those the developer wishes to share.

Incidentally, Lázár submitted his proposal that concealed ongoing building projects from the public after the news site Válasz Online published an article on another hotel development – also connected to István Tiborcz.

Dubious legality

Fortunately, even without the ÉTDR, land registry records reveal some details about the development. According to the records, the construction log for the renovation was opened in mid-July 2024, and it states that no building permit was required to start the works. This contradicts the law for the protection of heritage sites, which states that buildings in a historic environment can only be reconstructed with proper authorization.

According to the title deed, the property was acquired by Estoril Porperty Ltd. at the end of 2022. However, in the company’s annual accounts there is no trace of this purchase: in the section that should show the value of real estates owned by the company, they reported „HUF 0”.

It is likely that the sale at the end of 2022 was officially registered in 2023 (as indicated in the title deeds), because the 2023 accounts of Estoril Property Kft. already show a property worth HUF 1.1 billion. However, an item of HUF 978 million has been entered under the heading “Value adjustment of tangible fixed assets”, which simply means that the fair market value of the property is so much higher than the “book” value, i.e. the amount recorded in the accounts. Here, therefore, to the HUF 1.1 billion, the HUF 978 million must be added.

This likely means that the downtown property’s market value was HUF 2 billion, meaning that the company acquired it well under the market price.

Covered by state subsidies

The property was previously owned by the state for many years: after its nationalisation in 1952, it was occupied by the Directorate of Reserve Managemen, later known as TIG. In the 2010s, the public company beame infamous for its financial scandals, including one incident when they illegally gave HUF 1.6 billion to a bankrupt asset management company. After this scandal, in 2015, the government decided to close the company and liquidate its assets, including the District 5 property. The building was put up for open auction, which lasted for three years only to fail in 2020. According to the authorities, the process was invalid because, “unauthorised persons obtained information which could have affected the outcome of the sale”.

Legally, after the failure of a sale, a new auction should have been called, but there is no record of such an event.

Despite this, the deed shows that the building was sold to a new owner in November 2022 – the final owner of which is Fusion Group Zrt, which operates Burger King restaurants in Hungary.

However, just one month later, on 21 December 2022, Estoril Property Kft., a company owned by a private equity fund linked to István Tiborcz, became the owner of the property.

Since marrying into the family of Viktor Orbán, István Tiborcz’s companies were paid billions in taxpayer’s HUFs for real estate deals. For example, the Central European Real Estate Fund (CEI) received HUF 28.3 billion in government subsidies under the Baross Gábor Capital Programme launched by the government last year, which could even have been more than enough to by the District 5 property.