Nokia Networks agreed a lease on a facility in Hungary that is set to become the country's largest R&D facility, in a move that the country's foreign minister said strengthens the broader ICT industry in the market.
The Finland-based equipment vendor signed a 10-year lease on a 25,000 square metre facility currently being constructed in Budapest by property developer Futureal following a year-long tender process, specialist news agency PropertyEU reported. The deal is one of the largest since a financial crisis hit the country, the news outlet added.
Nokia Networks plans to use the facility to house its Global Technological Centre, PropertyEU explained, while Hungary Today said the facility will become the largest R&D site in the country.
Foreign minister Péter Szijjártó welcomed Nokia Networks' plan, noting it will deliver benefits to local companies, which he said provide 85 per cent of Nokia's supplies in the country, Hungary Today added.
The minister said the new facility would open "a new dimension" for Hungary's ICT sector, and would boost the country's broader economy in the form of increased exports, with Nokia Networks deriving some 97 per cent of revenues in the market from overseas shipments.
Futureal said the facility will cost €55 million ($61.6 million) to construct Hungary Today added, citing the property company's CEO Péter Futó.
The Budapest Business Journal noted that Nokia Networks' decade-long lease is one of the biggest deals for Hungary's beleaguered property industry in the last five years.
Nokia Network's move in Hungary could bolster its position in Europe, where it reported a 29 per cent sequential drop in revenues during the opening quarter of 2015. The company said the drop was in part due to declining sales in Russia and Germany during the period--both of which are target territories for a rejuvenated Hungarian business due to the country's geographical location.
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