Press Releases

Magyar Telekom: agreement on the new headquarters

Budapest, May 19, 2015 16:00

Magyar Telekom has signed today a comprehensive agreement with WING Group, one of Hungary's largest real estate developers to build the company's new headquarters and take a long-term lease on it, as well as to sell its main office buildings in Budapest. According to plans the company will relocate in the second half of 2018 to its new operating center, which will be fully customized to the market leader telecommunications service provider’s needs and meet the 21 st century requirements. Due to its central location, energy saving facilities and healthy work environment it will be one of the country's most innovative office buildings, to be built in the spirit of sustainability.

As one of the country's most advanced office buildings, the new Telekom headquarters will be designed and constructed with outstanding architectural solutions and based on environmental consciousness and sustainability criteria. It will be Hungary's largest office development project implemented in a single building block, and due to its location, near a key junction point of the city, can be considered as the capital city’s gate from the direction of Liszt Ferenc International Airport. The construction work is expected to begin in the first quarter of 2016.

According to plans the majority of Telekom and T-Systems Hungary employees who work in Budapest will move into this building, which will further enhance the exploitation of internal synergies. The architects will adjust completely to Telekom's needs the office building, bearing the architectural design of the 21 st century, to be built at 34-36 Könyves Kálmán körút in Budapest’s 9 th district with a long-term lease to be taken on it by the company. Along this line the interior will be designed to enable it to be furnished according to the current state-of-the-art and innovative HR management and IT trends. As a result the company will be in a position to provide its employees a healthy workplace environment of an outstanding standard.

Telekom continuously monitors potential efficiency improvement opportunities and has decided to rationalize its current real estate portfolio. As part of the transaction, the company will sell its three main office buildings in Budapest to WING Group, including the headquarters at Krisztina körút, after moving into the new office building. In addition, Magyar Telekom will be able to free up further office space capacity allowing the sale of an additional 5-7 smaller office buildings in the future.In total, the Company will vacate ca. 90 thousand square meters of office space, relocating the majority of its Budapest based functional units to the new headquarters that will comprise approximately 55 thousand square meters.

The sale of the company’s three main office buildings will result in expected cash inflows of EUR 6 million in 2015, EUR 9 million in 2016 and EUR 45 million in 2018. Furthermore, in 2018, Magyar Telekom will realize ca. HUF 4 billion related profit by selling these office buildings involved in the transaction. Besides the innovative office space helping to contribute to a more efficient and productive workplace, the Company’s real estate operating costs are expect to decrease significantly. After the preconditions are met, the contract is planned to come into force in the fourth quarter of 2015.