The deal through which the fund buys the ERA parks from the Cyprus-registered Omilos is likely to topple businessman Iulian Dascalu, owner of Iulius Mall network, from the leading position in the top of mall owners in Romania.
Argo awaits shareholder approval, due to come by the end of this month, to become the owner of the two shopping parks that currently have an overall rentable area of more than 80,000 square meters.
With the two projects in its portfolio, Argo, which also owns Shopping City Sibiu and Shopping City Suceava, will reach a commercial area of almost 210,000 square meters, while the rentable area of Iulius Mall projects owned by Iulian Dascalu amounts to 175,000 square meters.
The third position in the ranking is held by Austrian investment company Immofinanz, with four operational centers with a total lettable area of around 160,000 square meters.
How can an investment fund with a capitalization of just EUR14 million buy properties valued at EUR140 million? Argo’s investments are linked to the name of Cypriot businessman Andreas Rialas, a lawyer by training, who has worked with several banks. In 2000, he founded investment firm Argo Capital Partners, which is a stakeholder both in AREOF and the Omilos Group.
Thus, the deal would change only part of the ERA projects’ ownership, considering Rialas is a stakeholder in both firms, according to the latest information available. On the other hand, during this period most real estate deals are done with sums of several million euros due to the high leverage degree of projects.
The commercial park in Iasi has been recently assessed by Colliers at EUR83.7 million, while the Oradea project was valued at EUR76.8 million. However, Omilos financed the development of the shopping park in Iasi with loans of EUR79.5 million and 14 million lei (EUR3.2 million), while the Oradea development was funded with EUR62.5 million and RON24.7 million (EUR5.8 million) by several local banks.
Given these values, the net price of the deal is not likely to top EUR10 million. Omilos representatives made no comments on the deal value.
In the following months, Dascalu is most likely to regain the top position in the ranking as the shopping area of the Palas project in Iasi will be delivered by the end of this year or in early 2012.
(English version by Catalina Apostoiu; Editing by Radu Bostan)