Foundations launched by the National Bank of Hungary have bought four properties in Hungary worth a combined 25.2 billion HUF, shifting funds away from government debt, the head of their asset management group has said.
The announcement comes one day after the European Central Bank said it would continue to monitor the activities of the six educational foundations, established in 2014, to ensure they are not involved in state financing, forbidden for central banks, reports Reuters.
The foundations have received nearly 1 billion euros of central bank funding, most of which was invested in Hungarian government bonds.
Seen as an initiative of National Bank Governor György Matolcsy, the foundations have also come under fire from opposition politicians for some of their contracts.
"The goal of these investments is to produce returns for the foundations," Zoltán Fekete, chief executive of Pallas Athene Domus Optima told a news conference.
The foundations bought three office blocks in Budapest and one in the eastern town of Debrecen. Optima expects them to produce annual returns of about 7 to 8 percent, Fekete said.
One vacant office building in central Budapest, the former headquarters of the Hungarian Post, will cost an additional 25 million euros to renovate before it can be let, Fekete said.
Fekete said the foundations planned to scale down their government bond holdings, now worth 174.5 billion HUF, over the next one or two years.
The scale of real estate purchases will depend on the properties available on the market, he said.
Asked whether Optima planned to buy any assets from central bank vehicle MARK, which is in talks with local banks to acquire some of their distressed commercial real estate assets, or buy such assets directly from local banks, Fekete said:
"Right now we are not looking at problematic loan portfolios or real estate portfolios. We are only beginning to build up a real estate portfolio to produce returns and we are looking for good investments."