Hungary's Second-Richest Man Built His Fortune with a Series of Big Developments in Central Europe. Now He Is Turning His Attention to Romania and Russia

Article excerpt

The roaring cement mixers, forests of cranes and clouds of choking dust can feel an almost natural part of the citiscapes of Eastern Europe. Certainly from Bratislava to Bucharest, from Krakow to Kiev, few visitors can fail to notice the abundance of building sites.


Former communist Europe, with its ghastly, energy-sapping office blocks, grim, unwelcoming hotels, and crumbling housing estates, is busy catching up.

Among the yellow hard hats that bob within the apparent confusion of these temporary container cities you might find one man who is responsible for more than his fair share of portaloo rentals.

Sandor Demjan may be behind Vaclav Havel and Lech Walesa in the fame stakes, but the chances are his legacy, at least physically, will be more enduring than many of the region's great political leaders of the recent past.

For TriGranit, the real estate company headed by Demjan, now has a potential market value of some [euro]5bn, at least by his own reckoning.

Not bad for a man who was born into the rural poverty of the war-torn, disputed borderlands of Hungary and Romania in 1943.

"My mother was widowed during the war, and we were forcibly relocated after 1945 into Hungary. Twice she had to send me to foster parents to get herself an education. These people were kind enough, but very poor. I was expected to wash in the water already used by the grandmother of the house," he recalls, when asked of those far-off days.

Tellingly, rather than re-use the old lady's lukewarm suds, Demjan trained himself to wash in water from the well; it could be bitterly cold in winter.

Yet for all its harshness and hard work, the real estate tycoon of today remains grateful for the lessons learned in his childhood. "It's why I am still strong and healthy," he insists, though perhaps he means something closer to "determined and resilient".

Despite an indifferent school record, Demjan's entrepreneurial abilities soon surfaced in the adult world: indeed, in the command economy of Hungary in the 1960s, he was in his element.

"I saw combine harvesters [on the state farms] crippled due to a lack of spare bolts. But I knew where to find these bolts," he says. Find them he did, though naturally, as he admits, they were passed on "for a handsome profit. But the com came in, and everyone was happy."

Well, almost everyone. Unfortunately such endeavours amounted to profiteering, and meant Demjan more than once faced a judge and a potential prison sentence. In the event, in the slightly more relaxed atmosphere of Hungary-then just beginning its emergence as the "happiest barracks" of the Soviet bloc-he escaped with fines.

But as someone with a growing reputation as a man to get things done, by the mid-1970s he was put in charge of Skala-a firm founded to bring Western-style supermarkets to Hungary - where he was probably the first in the communist world to employ an MBA graduate from a Western school.

A decade later, with the arrival of Mikhail Gorbachev in the Kremlin, previous brushes with Stalinist legalities-once somewhat difficult to explain on a CV-suddenly became an asset. "I appeared in [the newspaper] Pravda in a series entitled 'People we should Follow'. I still have the cuttings," he says.

With this record, Demjan was appointed head of MHB, one of the new commercial banks, in 1988. From such a position, he soon gained all the contacts he needed to step into real estate development, a move he saw as guaranteed to yield a profit, given the region's underdevelopment.

Working with partners such as Peter Munk, the Canadian-Hungarian mining mogul, and Mark Palmer, the former US ambassador to Hungary, he pioneered a number of acclaimed office and retail mall developments in Hungary, before founding TriGranit to exploit the region's thirst for new building projects in 1997. …