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Rating action

Scope Ratings GmbH (Scope) has today affirmed the B+/Stable issuer rating of Biggeorge Property Nyrt. (BGP). Scope has also affirmed the senior unsecured debt rating at BB-.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: B+ (unchanged). BGP’s business risk profile continues to reflect its strong position as an integrated real estate platform and fund manager in the Hungarian residential development market. This position is supported by an extensive multi‑phase pipeline and solid presale activity. Market conditions have improved meaningfully, as stabilisation of the base rate throughout 2025 helped restore investor confidence and support residential demand and development activity. Consumer confidence has also gradually improved from previous lows, providing a more favourable backdrop for residential absorption.

BGP retains a meaningful presence in the Hungarian market, with the launch of several new phases that add close to 1,000 units to the pipeline, all within funds that BGP co‑owns and manages. Additional land has been secured for over 3,500 additional units from 2026 onward. This provides high visibility on future volumes in a fragmented domestic market. However, competitive relevance remains largely local given the group’s modest size in a broader European context. GroundUp, the group’s construction arm, remains a captive in‑house contractor and does not enhance competitive positioning. A structural strength of BGP’s model is its fund‑based development framework. Projects are executed in ring‑fenced SPVs, external investors contribute most equity, and BGP’s own economic exposure remains limited, which helps stabilise earnings. The group’s scale provides operational stability but modest pricing power. While BGP benefits from a broad service platform, spanning development management, fund services, and a growing hospitality portfolio, residential development remains the dominant underlying driver. Hospitality provides incremental diversification but is small relative to the core business.

BGP’s service platform is scalable domestically, supported by a large and phased residential pipeline. International expansion is at an early stage: the group completed its first overseas investment in Portugal in 2025 and is exploring opportunities in Spain, Germany and Poland. These initiatives represent a longer‑term diversification strategy but are unlikely to materially influence the business risk profile in 2026 given their early development stage. The group’s operations remain geographically concentrated in Hungary, with Budapest driving the majority of development volume and revenue. The future development pipeline for 2026-2028 is almost entirely Budapest‑based, offering limited domestic diversification.

Customer granularity is inherently low due to BGP’s one‑project one‑fund model with a limited number of high‑ticket institutional investors per fund. The group relies significantly on anchor investors such as MFBI/MFB Invest across its major co‑investment funds. However, multi‑year lock‑up periods and long‑term investor mandates mitigate liquidity and withdrawal risk.

BGP’s integrated service offering enhances project delivery, with specialised subsidiaries (Biggeorge Homes Hungary, Biggeorge Commercial, Biggeorge Hospitality, GroundUp, BN Ingatlanfejlesztő PLC) improving coordination and execution under the new organisational structure. GroundUp provides internal construction capacity, reinforcing scheduling and quality control. The platform generates largely recurring service income across development, supervision, sales and property management, although revenue correlation to residential cycles limits true cross‑selling diversification. ESG initiatives, including the Green Finance Framework and energy‑efficient project design, enhance BGP’s reputation among domestic institutions and support alignment with evolving market expectations.

Scope-adjusted EBITDA* is forecast to increase significantly in 2025 to around HUF 9bn, driven by platform‑based service income and the consolidation of GroundUp. However, Scope expects the EBITDA margin to decline to 15%-20% in 2025 (2024: 29%), as GroundUp’s high‑volume, low‑margin construction revenues dilute the blended margin. Despite margin compression, operating profitability remains underpinned by strong residential demand and multiple projects advancing through the construction and handover stages. Sales momentum has been favourable, and the breadth of ongoing developments provides good visibility for the next 12-24 months (forecasted revenues: HUF 55-72bn).

Financial risk profile: BB (unchanged). BGP’s financial risk profile is shaped by stable debt levels and highly volatile earnings, driven by the timing of success‑based investment gains within its fund‑based model. EBITDA is projected to rise sharply in 2025 to around HUF 9bn, reflecting strong presales, increased service platform activity and the consolidation of GroundUp.

Leverage remained moderate in 2024, with debt/EBITDA rising to 3.5x as EBITDA normalised following the disposal of income‑generating assets. Scope forecasts that leverage will improve significantly in 2025, falling to around 1.0x. This is mainly due to a substantial increase in EBITDA, driven by higher domestic service fees linked to real estate development and operations (up to HUF 8.4bn in 2025 from HUF 5.1bn in 2024), gains on investments (HUF 2bn in 2025, compared to HUF 30m in 2024), and the absence of new borrowings (excluding HUF 1.5bn from the consolidation of GroundUp). Scope expects debt/EBITDA to fluctuate between 0.75x and 1.50x over 2026-2028, with volatility reflecting the timing of project completions, while debt remains broadly stable.

Scope expects funds from operations/debt to follow a similar pattern. Following an improvement to over 80% in 2025 (2024: 20%), supported by strong operating cash generation, the rating agency expects the ratio to remain high, fluctuating between 70%-130% over 2026-2028. This reflects high levels of EBITDA generation alongside a low interest burden, due to low absolute levels of debt.

Free operating cash flow is expected to break even in 2025 driven by substantial investment gains as well as reduced net capex benefitting from the sale of land plots (HUF 8bn in 2025 vs. no land sales in 2024). Scope believes that 2026-2028 will continue to benefit from investment gains. At the same time, free operating cash flow is projected to remain volatile and negative, largely due to ongoing capital requirements across the pipeline and the front‑loaded nature of project expenditures. This volatility is structural and reflects the timing mismatch between investment outflows and the cash returns.

Interest coverage remains strong, with EBITDA interest cover expected to remain significantly above 10x or net cash positive (2024: net cash positive). Variations are driven almost entirely by earnings volatility rather than changes in the financing structure, given the predominantly fixed‑rate profile of BGP’s debt.

Liquidity: adequate (unchanged). Liquidity remains adequate, supported by HUF 13.2bn in cash available at the end of 2025 (based on management accounts). This comfortably covers cash needs for the 24 months up to the end of 2027, including a HUF 1.5bn working capital line from GroundUp in Q1 2026, HUF 700m in bond amortisation in Q1 2027, and HUF 6bn in negative free operating cash flow forecast for the same period.

Scope notes that BGP’s senior unsecured bond issued under the Hungarian National Bank’s Bond Funding for Growth Scheme has a covenant requiring the accelerated repayment of the outstanding nominal debt amount (HUF 7.0bn) if the debt rating of the bond stays below B+ for more than two years (grace period) or drops below B- (accelerated repayment within 30 days). Such a development could adversely affect the group’s liquidity profile. The rating headroom to entering the grace period is one notch. Scope therefore sees no significant risk of the rating-related covenant being triggered.

Supplementary rating drivers: credit-neutral (unchanged). Supplementary rating drivers have no impact on the issuer rating.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that BGP will maintain solid credit metrics, with debt/EBITDA remaining well below 5x, supported by strong presales, a structured expansion strategy, and a more favourable macroeconomic environment. Short- to medium-term demand for residential real estate is expected to remain strong, driven by lower interest rates and improving investor sentiment.

The upside scenarios for the ratings and Outlook are (collectively):

1. Successful expansion and diversification, strengthening cash flow generation from a broader asset base (a scenario considered remote at present)
    
2. Debt/EBITDA sustainably below 3.5x, supported by higher operating income and stable gross debt

The downside scenarios for the ratings and Outlook are (individually):

1. Liquidity deterioration due to unexpected cash outflows, weaker presales, or failure to secure project financing, constraining BGP’s ability to initiate new developments
    
2. Debt/EBITDA sustainably above 5x, driven by weaker operating income from lower demand, cost inflation, or project execution delays

Debt ratings

The rated entity has issued one senior unsecured bond through the Hungarian Central Bank’s Bond Funding for Growth Scheme. The bond was issued in February 2022 with a volume of HUF 7.0bn (ISIN: HU0000361365), a ten-year tenor and a fixed coupon of 5.1%, payable annually. Repayment is in five equal tranches (10% of the face value), commencing from February 2027, with a 50% balloon payment at maturity.

Scope’s recovery analysis is based on a hypothetical default in 2027, which assumes outstanding senior unsecured debt of HUF 6.3bn, with no undrawn credit facilities available for drawdown, as the group currently has no such facilities.

The assessment results in a ‘superior’ recovery for senior unsecured debt, supporting an uplift of up to two notches above the underlying issuer rating. However, Scope has only granted a one-notch uplift and affirmed the debt category rating at BB-. This is to account for potential volatility in the capital structure on the path to default (which may include the issuance of secured debt), as well as the issuer's exposure to the cyclicality of earnings inherent in serving the real estate end-market.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

All rating actions and rated entities

Biggeorge Property Nyrt.

Issuer rating: B+/Stable, affirmation

Senior unsecured debt rating: BB-, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Construction and Construction Materials Rating Methodology, 23 January 2026; European Real Estate Rating Methodology, 2 June 2025; European Business and Consumer Services Rating Methodology, 15 January 2026), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Vishal Joshi, Analyst
Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 8 February 2022. The Credit Ratings/Outlook were last updated on 13 February 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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