by Ákos Budai | Investment

Leading global private investment firm Texas Pacific Group (TPG) has acquired a major part of Hungary’s most successful real estate developer TriGranit. The transaction affects the entire Polish and Slovakian portfolio of TriGranit, as well as some of its Hungarian and Croatian projects and TriGranit Platform. By ensuring additional funding TPG intends to create the largest real estate investment, development and management corporation of the region. Budapest’s West End City Centre and other TriGranit projects remain unaffected. The remaining part of the company will continue to exist and operate under the name Gránit Management.


Leading global private investment firm Texas Pacific Group (TPG) has acquired a major part of Hungary’s most successful real estate developer TriGranit. The transaction affects the entire Polish and Slovakian portfolio of TriGranit, as well as some of its Hungarian and Croatian projects and TriGranit Platform. By ensuring additional funding TPG intends to create the largest real estate investment, development and management corporation of the region. Budapest’s West End City Centre and other TriGranit projects remain unaffected. The remaining part of the company will continue to exist and operate under the name Gránit Management.

TriGranit owner Sándor Demján, one of Hungary’s richest people, has announced on Monday morning that a substantial part of real estate developer TriGranit has been sold to U.S.-based TPG.

“A real estate developer is like a car factory, it develops and then sells and large financial investors buy. Seldom we keep one or two buildings, e.g. West End City Centre [in Budapest], which is unique in the world due to its brownfield classification," Demján told journalists today.

No specifics have been revealed today, but the magnitude of the transaction is over EUR 500 million, which is tantamount to nearly the entire Hungarian market outside TriGranit. Hungary’s share of the cc. EUR 8 bn CEE market is about 10%.

The deal is expected to be completed in October this year.

“A real estate boom can be expected because interest rates are low. Bankers, due to their “hamburger brain", have been rejecting property as they had burnt themselves [with these]," Demján added.

Gránit will develop and operate further both in Hungary and in the region, although its available capital will certainly be smaller than buyer TPG. It took more than a year to seal this deal and it was a tremendous job, as dozens of firms had to be sold.

“TPG Real Estate’s expertise and global presence will help us buy, develop and manage commercial and office units on strategically important locations," said Árpád Török, who will continue to lead TriGranit under the new owner too. This will give TriGranit the chance of becoming a world leading real estate developer, he added.

Responding to Portfolio’s enquiry Török said TriGranit Platform acquired by TPG will be the one to orchestrate potential acquisitions and developments, which leaves very few obstacles to growth. Before the transaction is closed the specifics in this matter will also remain unclear, but the strategy is clearly to continue acquisitions and developments.

 

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