“Romania is hot again when it comes to real estate investment,” said Andrew Peirson, managing director of real estate consultant JLL for Southeastern Europe and Romania.
Companies that have not started a new project in a while are doing so now. Skanska is developing new projects and Romania is beginning to attract other investors, too, he added.
Investors are looking at the local real estate market because banks have started to pay negative interests for deposits in Western Europe, while in Romania the purchasing power is improving, as are the yields for retail space, Peirson added.
The biggest project put on the Bucharest map this week is The Bridge of developer Forte Partners, a EUR100 million investment in two office buildings on the former site of the Spicul industrial bakery in the Orhideelor-Basarab Overpass area.
The area is becoming an important spot for office space development in Bucharest, as the stock there will triple from the current 56,000 square meters in the next two years.
“Investment in the first building amounts to EUR60 million, more than 30% of which self-funded and the rest coming from a bank loan,” said Geo Margescu, founder and chief executive officer of Forte Partners.
Near The Bridge, Austria’s CA Immo announced on Monday it had hired PORR Construct as general contractor for the new Orhideea Towers office space project. The project will require a EUR75 million investment and is scheduled for delivery in 2017.
Another office development announced is the start of the third phase of The Office project in Cluj-Napoca by South Africa’s NEPI and local entrepreneur Ovidiu Sandor. This phase will put 18,500 square meters of office space on the market, following an about EUR20 million investment. The two investors decided to go ahead with the third phase as the city continues to offer business development opportunities especially in the IT industry.
On the retail space front, almost half a year before the opening of the EUR180 million ParkLake mall, Austria’s S IMMO, which owns the Sun Plaza mall in Bucharest, announced a 11,000 square meter extension thereof. The project will require an at least EUR20 million investment, according to ZF’s calculations and will be completed in the first quarter of 2018. The Austrian group did not reveal the value of the investment but operated a EUR20 million capital increase at the end of last year, according to the Official Gazette.
Another retail development, the Veranda shopping center businessman Florin Pogonaru is building on the former Prodplast site in the Obor area (near the Bucharest city center) got a EUR25.5 million loan from Raiffeisen Bank and Raiffeisen Bank International to finance part of the investment and the loan may be extended to EUR28.5 million. The development by Prodplast Imobiliare will require a EUR60 million investment and is 70% pre-let. It should be inaugurated in the fourth quarter of 2016.
(English version by Loredana Fratila-Cristescu)