The first developer of the project was an Israeli investor and former customer of the bank who went bankrupt.
The low number of active real estate investors is making more and more banks take over the developer job to cut the losses caused by bankrupt clients after having taken over homes, land and even malls and office buildings.
One such bank is Piraeus, which during the boom years funded housing complexes now insolvent like Planorama in Colentina, (NE) Bucharest, Belleview of Sinaia (south of the country) and Seasons Residence in Brasov (central Romania). It now plans to fund the completion of Seasons Residence.
Israeli investor Yuval Rishpi, the sole owner of Gespi Investments, launched the 180-apartment Seasons Residence he planned to build on a plot between Brasov and Poiana Brasov resort in 2007. The investor had set prices starting from EUR100,000 plus VAT a studio and got almost EUR10 million from Piraeus Bank to build the complex.
In mid 2008, the developer announced half of the 130 apartments to be delivered in the first phase had been sold, some of them to speculative investors. Then the crisis came and the real estate market became difficult, work on the complex stopped and insolvency followed in March 2011.
Casa de Insolventa Transilvania and RVA Insolvency were the court-appointed administrators and they decided for bankruptcy in February 2012 and therefore looked for ways to sell the assets.
As very few investors are willing to spend millions or tens of millions on real estate, and much less so on residential complexes, and those who do are looking for bargains, Piraeus bought the assets of the bankrupt company.
It acquired a 13,000 square meter plot and six apartment buildings in various stages of completion for about EUR10 million plus VAT through Proiect Season Residence SRL at the end of last year
It paid for the acquisition with a EUR15 million loan taken from Piraeus Bank in November 2012, according to the Electronic Archive for Secured Transactions (AEGRM) and will use the rest of the money to work on the six apartment buildings.
“(…) work should begin as soon as the relevant authorities issue the construction permit,” Piraeus Bank officials told ZF.
They say they decided to buy Seasons Residence so the lender could recover as much as possible of the loan granted to the developer that was unable to complete the investment. Another reason was to keep the buyers with whom new pre-contracts were signed, acknowledging their payments so far.
Piraeus expects to begin work on the complex early in the second quarter this year and be done in fourteen months.
(English version by Loredana Fratila-Cristescu)