The Pallas Athena Foundations: Real Estate Investments

  • 4 Jul 2016 9:00 AM
The Pallas Athena Foundations: Real Estate Investments
The Pallas Athena Foundations were established by the National Bank of Hungary (MNB) to “contribute to the common good” by funding a variety of educational programmes in different fields. Recently, the six foundations have begun to shift their capital from government bonds to real estate.

“As far as our activities on the real estate market are concerned, it is not advisable to make fast moves in this field and we also move forward prudently and make well though-out investments. We have purchased four real estate properties: three office buildings in Budapest and one in Debrecen.

Our aim is to make these investments increase the value of the properties in the hands of the foundations,” says Zoltán Fekete, CEO of Optima Plc., the asset management company of the foundations.

The properties in the care of the foundations, supervised by Optima Plc., are of two kinds: some properties have been purchased by the foundations, and some have been donated to them by the MNB. The majority of these properties were buildings in need of renovation. These have been restored and modernized, and they will serve as community spaces such as PhD schools, auditoriums, or libraries.

“Properties we have recently purchased are managed by us to make profit. The tenants in these properties are totally independent of the foundations, they pay the market price for renting space.” Fekete says.

The properties purchased so far are the following: two office buildings in Millenáris Park (Millenáris Classic and Millenáris Avantgarde), the Buda Palace at Széll Kálmán Square, and an office building in Debrecen, East Hungary. The properties are intended to be long-term investments, and they will function as offices to be rented, in the hope of producing annual returns of 7-8%.

After the transactions, the foundations’ assets will amount to the following: HUF 174.5 bn in government securities; HUF 49.67 bn in real estate; HUF 27.7 bn in company shares; HUF 10 bn in corporate bonds; and HUF 5.85 bn of bank deposits. The current transactions are expected to be completed soon, but the foundations may purchase further real estate in the future.


Republished with permission

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