Hungary spends $59 million acquiring foreign real-estate since 2010

August 3, 2017

The Hungarian government has spent nearly HUF 12 billion (USD 47 million) purchasing real estate in foreign countries and hundreds of millions in rent since 2010, reports conservative print daily Magyar Nemzet.

The Hungarian state has some 1280 real estates in 89 countries all over the world and spent about HUF 14.2 billion (USD 55 million) on rents and operation, according to Ministry of Foreign Affairs and Trade undersecretary Levente Magyar. The list of real estate rented and owned by the Hungarian state compiled at the request of independent MP Marta Demeter contains some items that are hard to justify.

In line with the government’s “Eastern Opening” foreign policy, the Ministry of Foreign Affairs and Trade spent the most on property in China, with a total of nearly HUF 1.6 billion (USD 6.2 million) in 2016 alone. Although currently all 56 properties used by the ministry are rented from the Chinese state, according to Minister of Foreign Affairs and Trade Péter Szíjjártó’s May announcement the Hungarian state might purchase the Hungarian Embassy building in Beijing.

The ministry spent the most on rent and maintenance in Japan and Iran in 2016, HUF 339 million (USD 1.3 million) and HUF 145 million (USD 564,000), respectively. According to Expatistan.com, a fully furnished 85-square-meter apartment in the most expensive part of Tehran does not cost more than HUF 4.2 million (USD 16,000) a year.  According to the website, which collects data about the cost of living in different cities all over the world, the ministry could rent three 984-sqm buildings in Tehran for this amount.

Hungary also managed to spend HUF 35.8 million (USD 139,000) on overpriced real estates in Turkey. According to Expatistan.com’s data, the Hungarian government pays 12 times more monthly rent than the usual price in Ankara’s most expensive district.

The country with the fourth-highest rent rate on the list is Iraq, whose real estate market has been badly affected by terrorism. Despite this, the Ministry of Foreign Affairs and Trade spent HUF 31 million (USD 121,000) on average per property in 2016.

According to independent MP Demeter, “in many cases, the amount reserved for real-estate costs is not proportionate with the bilateral relations,” noting that, while the foreign policy apparatus closed the Hungarian Embassy in Estonia in 2014, it operates 34 real estates in Mongolia. Nor does she believe economic priorities warrant this, as in 2016 Hungarian exports to Mongolia only amounted to some HUF 2.5 billion (USD 9.8 million) while in the same year Hungary exported goods to Estonia worth a total of HUF 96.3 billion (USD 375 million).

One of the most bizarre items on the list is two buildings rented by Hungary in Phenjan, North Korea, whose cost of operation was assumed by the government of North Korea.

The list also reveals that between 2010 and 2017 the Hungarian state spent over EUR 50 million (USD 59 million) acquiring four properties abroad. The Ministry of Foreign Affairs and Trade concluded a pre-contract for the Hungarian Embassy’s building in Bratislava for EUR 6.6 million (USD 7.8 million). Hungary also purchased a building in Washington D.C. for a whopping USD 16.8 million, and one in Lendava, Slovenia, for EUR 145,000 (USD 171,500). The most expensive procurement was the purchase of a building in Munich, Germany (pictured above), for EUR 16.9 million (USD 19.9 million) for the Consulate General. As one of the primary functions of Consulate Generals is to issue visas, Demeter called the latter incomprehensible in light of the fact that both Hungary and Germany belong to the visa-free Schengen zone.

According to Demeter the ministry previously did not disclose this data to the National Assembly’s Foreign Affairs Committee. Demeter, who sits on the committee, vowed to request a detailed report on the government’s real estate dealings at the next sitting of the committee.