Futureal Group’s History

Table of Contents

2000-2003

WORKING TOGETHER AS FATHER AND SON, SEARCHING FOR A PATH

After the sale of Dr. Péter Futó’s Hungarian candy business, Fundy, with a history going back three generations, and Gábor Futó’s return from his studies at Harvard, Futureal Holding Zrt. is established by father and son, in close partnership, as an investment company with diverse activities, including the following milestones.

• The buyout from dozens of owners (in a takeover battle) of a holding company (ISZH Rt.) with part ownership stake in Raiffeisen Bank and several other businesses.
• The partial buyback of Péter’s previous candy business and a multi-year attempted buyout of a large confectionary company.
• Engaging in a two-phase, 142-unit residential development project (La Siesta) led by Tibor Földi

2003

FOCUS ON REAL ESTATE, WITH GABOR FUTO’S LEADERSHIP

• After succesfully completing the highly profitable exit from the ISZH investment,Gábor proposes concentrating on real estate and building a scalable property development and investment company.
• A focused business line, also called Futureal, jointly owned by Péter and Gábor Futó was established with less than €4 million of total capital to focus on real estate as the main activity. In contrast, the other activities were reduced and exited step-by-step.
• Gábor Futó became hte CEO of the new Futureal real estate business, responsible for strategy, real estate transactions, financial engineering and assembling and leading the team. Péter Futó took up leading external relations with a focus on municipality relations. Tibor Tatár was hired to be the development director for commercial projects. Tibor Földi was appointed to lead residentail developments.
• A warehouse deal wasis concluded and concurrently purchased and partially sold.
• The first contact with the proposed Corvin-Szigony urban regeneration project is made by Gábor (while trying to find a lost dog in District 9.), a joint venture was negotiated with a local residential developer and an eventually unsuccessful bid was made to acquire the development rights and obligations.

2004

THE CORVIN PROMENADE PROJECT: THE GREAT INSPIRATION AND CHALLENGE

• Step-by-step buyout of the four rights owners for the development of the largest city-centre urban regeneration project in CEE, located in the biggest slum of Budapest, with 95% of the population belonging to the Roma minority and living for decades in deep poverty. Most apartments were without private toilets and were of 30 sqm average sizes occupied by big families.
• The massively challenging project was to become “Best mixed-use project in Europe”
• Launch of the planning process of the mixed-use Corvin Promenade project involving several  leading local architects and also the Harvard Design School in a period
• Renegotiation of the urban development agreement with the city to allow flexibility and speed; changing of the masterplan to create a partially-covered retail promenade.
• Futureal bought 38% of The Budapest Wholesale Fruit and Vegetable Market in three transactions

2005

BUILDING A REAL ESTATE DEVELOPMENT COMPANY

• Assembly of an amazing team of young professionals, people who love the challenge of turning Corvin from a problematic slum into a flourishing city centre – all with minimal capital invested in the business.
• New team members include Pál Darida to manage bank financing, and József Balogh to lead the technical department.
• Creation of CORDIA as a separate B2C brand for residential projects, while Futureal would focus on commercial projects and B2B.
• Intensive branding and marketing activity was launched for Corvin Promenade, led by BrandArt, the design and marketing agency owned by Zsuzsa Futóné Szántó.
• Futureal creates a large-scale land development joint venture on Madárhegy.

2006

GABOR NEGOTIATES THE BIG DEAL, 30x RETURN ON THE TOTAL GROUP INVESTED EQUITY

• Feeling that times are too good to be true (with 100%+ leverage and soaring real estate prices), Gábor Futó negotiated the forward sale and forward funding of Corvin Plaza (the newly imagined urban retail component of Corvin Promenade which had not even have a building permit at the time) to Klepierre S.A. in what was to become one of the largest and most profitable real estate transactions in CEE.
• The deal, creating an over 30x return on the total capital ever invested in Futureal was to become a defining moment in the history of Futureal Group, creating not only the financial basis to develop Corvin, but also to survive the 2007-2008 financial crisis and to expand to the new markets.
• The transaction was de-risked with Futureal eventually taking no leasing, yield or financing risk. It was negotiated to include the forward payment of most of the profits at the time of the building permit.

2006

THE REALIZATION OF A GREAT DREAM BEGINS

• Start of construction, initial sales (in Ireland) of the first residential building (Premiere Ház) and the first office building (Corvin One) along Corvin Promenade.
• Struggling to make customers and tenants ignore the current slum with horrible reputation and massive poverty and buy in to the future we had imagined.
• Creation of the largest social housing project since the fall of socialism after the change of regime in the 1990s to help support the evacuation of existing buildings to be demolished, start of the renovation of several remaining historical buildings.
• Eventually 1100 local families would be moved out and be either compensated with cash or relocated to the same district to better condition renovated or new social apartments, significantly improving their living conditions
• Planning of the Promenade, the newly-created public space, becoming the heart of the project.

2007

HARVESTING THE BIG DEAL AND THE START OF EXPANSION

• The Klepierre deal was closed, ensuring the financial basis for expansion and the set-up of a separate family office.
• Expansion to Romania in order to develop shopping centres in a joint venture between Gábor and his brother-in-law, Eran Socher.
• De-risking of the Gold Plaza shopping centre development (to be developed in Baia Mare municipality, Romania) by forward selling the centre to Immoeast AG even before the actual purchase of the development land and drawing 80% of the required equity from Immoeast.
• Land assembly and the long planning process for the future Etele Plaza and Budapest One began at a location that is envisaged to become the largest multi-modal transportation junction in Budapest when the new metro line would open (with a massive delay as learnt later)
• Several residential projects were launched

2008/2009

THE GLOBAL FINANCIAL CRISES (GFC) HITS

• The GFC began upending the expansion plans, creating an extremely deep economic and financial crisis.
• Even though all of the group’s debt had been non-recourse, a conscious decision was made not to default on any bank debt, pay the subcontractors of our bankrupt general contractors and complete all our projects.
• Gábor launched Finext Capital, a family office funded by distributing part of the profits of the Klepierre deal.

2009

MANAGING THROUGH THE GFC, WHILE TAKING ADVANTAGE OF THE PUBLIC MARKET OPPORTUNITIES

• Continuation of all projects during the GFC, bankruptcy of all, but one of our general contractors, resignations by clients from sale and lease agreements, massive issues in bank financing and strained exit arrangements.
• The development of Corvin Plaza, Gold Plaza, Corvin One office building and all residential projects were progressing amid a massively challenging economic and financial environment.
• Finding better return opportunities in the public markets than private markets, a large chunk of the company’s capital was invested by Gábor into taking advantage of dislocations in listed bonds, activist strategies in closed-end funds and real estate companies, and bonds. Creating over 50% IRR [internal rate of return] in the following two years
• The big miss: the eventually failed acquisition of control of Conwert Immobilien AG, Austrian’s then largest residential landlord with 24,000 rental apartments in Austria and Germany at an extremely depressed valuation

From 2010 on

DELIVERING ON OUR PROMISES

• Handover of several projects including Corvin Plaza, the next four office towers on Corvin Promenade, Gold Plaza, leasing up during the GFC, the European debt crisis and accumulated effects of these on the Hungarian economy.
• Reorganisation of the company focusing on finding new opportunities in a challenging market.

2011-2012

INVESTING WITH FOCUS ON DOWNSIDE PROTECTION AND SPEED, FIRST ENTRY TO POLAND

• The group was reorganised with the separation of the Hungarian real estate operations focused under Futureal Development Holding (FDH) and a separate entity, Futureal Real Estate Holding Ltd (FREH) was refocused, with majority investment by Gábor, to focus on international expansion and partnership deals.
• Launching a preferred equity partnership program to jumpstart good quality, frozen projects and securing protected downside, and negative land basis.
• Preferred equity recapitalisation of the stuck Nova Park shopping centre development in Poland; raising of €50 million funding for development during the eurozone crisis.
• Preferred equity investment into the projects of a financially distressed listed Polish residential developer.
• Agreement with KPMG to build their new headquarters (Vision Towers) at a site not yet owned by Futureal; the launch of our first office headquarters development project

2013

CROSSING THE ATLANTIC

• As an altogether separate real estate business, Gábor, together with Eran Socher, his brother-in-law, launches a single-family residential rental platform in the United States in Atlanta, Indianapolis and around Detroit as part of a macro bet to take advantage of the residential market dislocation caused by the GFC.
• Several development co-GPs [General Partners] investigated; investment in office and strategic land projects in the United States.
• Finext Capital investment advisory team hired in Herzliya, Israel.
• Handover of second phase of Corvin Promenade.

2014

MOVING FORWARD

• Sziget Center, Futureal’s first retail repositioning project was acquired (a strip mall).
• Agreement to develop the 25,000 sqm GLA build-to-suit research and development headquarters of Nokia Systems, activating the other end of Corvin Promenade
• Preparing for the launch of our own residential development business in Poland with the acquisition of the site of Cystersów Garden
• Handover of Corvin Corner, the sixth office building on Corvin Promenade, Vision Towers (KPMG), Handover of Nowe Bochenka in Krakow; next phases of Corvin residential.

2015

A NEW DAWN: RE-BUILDING CORDIA IN HUNGARY, EXPANSION TO POLAND, ROMANIA, GERMANY

• After six years of a frozen residential development market in Hungary, with limited development activity (one project a year), Cordia is reinvigorated with the internal slogan “speed”, in a massive push to expanding its land bank and team to be ready to what we rightly expected to be a huge residential development boom.
• Start of Cordia’s own operations in Poland, first in Kraków.
• The US single family residential portfolio marching towards the 500-unit target.
• Futureal’s first residential rental investment in Germany (the acquisition of five buildings in Kaiserslautern)
• A highly structured mezzanine discount loan investment with Caelum to help them develop ParkLake Plaza in joint venture with Sonae Sierra in Bucharest, Romania.

2016

FULL SPEED AHEAD, SECURITIZATION OF DE-RISKED PROJECTS

• Handover and sale of Nokia Skypark and Sziget Center, producing exceptional returns
• Launch of the two phase Advance Tower office development in a joint venture with the land owner.
• As a major financal innovation, Gábor Futó and Rezső Ezer developed a securitisation vehicle for Cordia portfolios of de-risked residential development projects with major co-investments by local and international institutional investors. The model becomes the financial engine fuelling the growth of Cordia.
• Establishment of CORDIA INTERNATIONAL ZRT., a newly-created corporate entity focused on the Hungarian residential development activities of Futureal Group under FDH.
• Starting the sales of 1,500 new smart homes in Budapest.

2017

FURTHER INTERNATIONAL EXPANSION

• Launching the development of the first phase of Budapest One, the largest office building in Budapest and the cornerstone project of the South Buda City Center traffic oriented urban regeneration project.
• Cordia enters Warsaw, Poland, with the launch of Rodziewiczówny and Kopalniana projects, and TriCity with the acquisition of Jaśkowa Dolina project
• Cordia enters Bucharest, Romania with the launch of the two phased Parcului 20 Project.

2018

THE NEXT BIG DEAL, RECYCLING CAPITAL TO FUND FURTHER GROWTH

• Futureal sold all existing office buildings on Corvin Promenade to OTP real estate funds and forward-sold Corvin 5 and Corvin 6 office buildings in the largest office deal ever completed in Hungary.
• Launching the construction works of Etele Plaza, the largest shopping centre of the Buda side of the capital.
• Futureal exited Kaiserslautern and ParkLake Plaza, producing exceptional returns.
• Futureal became a founding investor of ARGO Properties N.V.  with co-investors including Clal and Phenix Insurance companies. Argo became a rapidly-growing German residential landlord, focused primarily on Leipzig and Dresden.
• Cordia launched a second securitisation vehicle, also with international projects.

2019

GETTING READY FOR THE CAPITAL MARKETS WHILE EXPANDING TO NEW MARKETS

• Strategic reorganisation of Futureal Group; changing the previous Hungary vs. International split into Residential vs Commercial split and preparing both Cordia International Zrt. (owning the international residential developments and investments as well) and the newly formed Futureal Holding B.V. for accessing the international bond markets.
• Futureal sold Advance Tower to Erste real estate fund and completed the sale of  Corvin 5 and 6 office buildings to OTP real estate funds.
• Cordia International Zrt. conducted its first bond issuance of a seven-year, 4% fixed coupon HUF denominated bond (HUF 44 billion) with a diverse group of 50 institutional investors participating in the landmark offering.
• Led by Tibor Földi and Mauricio Mesa Gomez, Cordia enters Spain with the acquisition of two residential development sites on the Costa del Sol – the “Sun Coast”.
• Cordia entered Poznan by purchasing the old Modena clothes factory in the city centre.

2020

GEARING UP CORDIA, CREATING NEW REAL ESTATE PLATFORMS

• Gábor Futó and Rudolf Nemes agreed to create a growth-oriented logistics development platform, HelloParks, initially focusing on the Hungarian market opportunities. A market-leading team was assembled.
• Despite the pandemic, Futureal Development secured large headquarter tenants for its following office projects: Vodafone for Budapest One second phase and British Telecom for Budapest One third phase. Long-term financing was secured for developing these office buildings, and near 0% long-term swap rates were locked in.
• Taking advantage of the historically low interest rates, Cordia issued its second, 10-year, HUF-denominated senior unsecured, and ten-year fixed 3.5% coupon bonds (HUF 40 billion).
• Cordia implemented a capital increase of the listed Polish developer POLNORD S.A. effectively taking control of the company at a very attractive valuation, and secured a massive albeit work-intensive land bank. Later, Cordia took full control of Polnord through a public tender offer.
• Cordia enters the UK residential development market by acquiring BLACKSWAN PROPERTY, a primarily build-to-rent focused developer operating in Birmingham.
• Cordia entered the UK affordable housing market through the acquisition of ST. ARTHUR HOMES-a for-profit registered provider of social housing focusing primarily on the shared ownership market.
• At a time of hightened uncertainty with Covid and VAT on new residential sales raised from 6% to 27%, Gábor agrees with CIB Bank the acquisition and 7-year land financing of a large-scale, brown-field land portfolio with 1.2 km of uninterrupted direct Danube waterfront and two metro stations. The concept development and planning process of the 300,000 sqm MARINA CITY project is launched.
• An over €1-million donation programme was implemented to help cities cope with the challenges posed by the Covid-19 pandemic. The group moves to home office and introduces the Stay Safe initiatives.

2021

GEARING UP FUTUREAL, LAUNCHING AND GROWING NEW REAL ESTATE PLATFORMS

• Futureal locked in historically low interest rates by conducting four successful bond issuances, including a ten-year green bond and a 15-year bond, both HUF-denominated, fixed rate senior unsecured bonds with coupons of 4% and 3.5%, respectively, in the total amount of over €300 million.
• HelloParks was further capitalised by Futureal Holding B.V., strategic land positions were acquired around Budapest, supporting a close to 1,000,000 sqm GLA development pipeline and the “megapark” strategy was developed.
• Futureal Investment Partners was launched: Gábor Futó and Karol Pilniewicz agreed to set up an opportunistic real estate investment management platform. A highly- experienced investment team was assembled.
• Futureal Development secures IBM’s headquarters as the anchor tenant for the Corvin 7 office building. Long-term financing was secured.
• Futureal’s most significant retail project, Etele Plaza opened doors.
• Cordia expanded its UK social housing investments with the acquisition of AUXESIA HOMES, a for-profit registered provider of social housing focused on the shared ownership and affordable rentals tenures.
• ARGO was listed on the Tel Aviv Stock Exchange in a highly successful IPO.

2022

GROWING THE PLATFORMS, REACTING TO THE DOWNTURN AND THE NEW MACRO ERA

• Futureal Investment Partners acquires two shopping centres (Bemowo in Warsaw and Manhattan in Gdańsk) as well as an office building (Wratislawia in Wrocław) for repositioning.
• HelloParks achieved a leadership position and over 40% market share in the new logistics and industrial developments around Budapest. Megapark-level, multi-phase financing agreements were signed with Erste, Raiffeisen and KBC Banks.
• Futureal Development handed over the remaining two phases of the Budapest One office building.
• Cordia handed over several significant projects across Poland and Hungary, including Grand Corvin, the last residential building along Corvin Promenade, and progressed the construction of thousands of apartments in the five countries where it operates.
• Marina City land development phase was completed after several land transactions and the achievement of a zoning plan, building permits were submitted for several phases.
• Tomasz Lapinski, Cordia’s country manager in Poland, led the intensive restructuring of Polnord S.A., including the land development of the strategic land plots in Warsaw and TriCity; the sale of the non-strategic land bank; and the taking private of the company.
• Responding to Russia’s war on Ukraine, an over €1-million aid program was launched to help Ukrainian refugees and several internal initiatives were launched, including establishment of a kindergarten, temporary accommodations (used by thousands of refugees), and storage facilities to help cities with supplies.
• Significant cash reserves were created in anticipation of economic challenges.
• Stormy seas ahead – with likely decrease in global real estate valuations, driven by much higher long term interest rates and secural headwinds in certain sectors.