Hungary cancels Zugló office complex deal, seeks 300bn HUF refund

Prime Minister Magyar Péter announced that the new TISZA government will withdraw from the purchase of the Zugló office complex originally launched by the previous Orbán administration. The state had already paid more than 300 billion forints for the project, which was to cost around 244 billion forints (final price over 254 billion plus VAT). The government says the developer, Bayer Construct Zrt., failed to meet contractual deadlines and that many closing conditions were not fulfilled. A legal and financial review by the Magyar Nemzeti Vagyonkezelő and guarantees from the Hungarian Development Bank have uncovered multiple breaches, allowing the state to reclaim the funds, claim double the deposit, a 10 % penalty of the net price and additional damages. The cancelled development, known as the Zugló Városközpont project, includes offices, commercial space, residential units and public areas. The reclaimed money is slated for energy, transport and health projects that directly serve Hungarian citizens. Negotiations with Bayer Construct and the state asset manager continue, with a possible lawsuit if an agreement is not reached by late summer.