AIM-listed company Nanette Real Estate Group has bought a development site in Budapest, Hungary through a subsidiary company.

It told the stock exchange today it has signed a preliminary agreement to purchase an 8 acre plot of freehold land, which is located in the ninth district of Budapest.  

The plot is already designated for residential use. It plans to develop 1,800 apartments at a total cost of around €115 m (£91.4m) and said the total estimated sales at completion are €145 m (£117m). 

Nanette said initial acquisition costs, which were undisclosed, will be financed from existing cash resources.

It said it was also in the process of obtaining bank finance. Lehman Brothers has the option to participate as a 50% partner in the project.

This is Nanette’s eleventh project in Budapest. It said it highlighted the group’s commitment to Hungary and its belief that the Hungarian economy will continue to grow, sustaining the demand for new high quality housing for the urban middle classes.

Shaul Lotan, chairman at Nanette, said: 'This transaction continues our belief that by increasing our landbank now, we will strengthen our long term position, and allow us to be at the forefront of the regional property market once short term market liquidity issues are concluded.'