Building offices in the Pipera-Tunari area in Bucharest, where cars queue for several hundred meters at rush hour, does not seem like the best decision of all, especially during a time of crisis, when the stock of available office space has increased in most office areas of the city.
UK’s Chayton Capital bet EUR50 million on the Swan Office & Technology Park project, whose lettable area stands at 29,000 square meters, of which only 15% are occupied at the moment, even though they were delivered early this year.
In other words, the project has 25,000 square meters of available office space in an area where tens of thousands of square meters of office space are empty in projects such as Global City, Cubic Center and Twin Towers Barba Center.
Infrastructure in the area has improved somewhat lately and the overpass on the Pipera road crossing the Barbu Vacarescu street and Calea Floreasca avenue will be completed in a matter of months. The role of this overpass is to make traffic fluid on one of the most important ways into the Pipera-Tunari office area, which has developed over the last five or six years.
David Allen, manager of Chayton Capital in charge of the Central and Eastern European portfolio, says the company hopes to see the occupancy rate reach 65-70% in one year, or maybe even sooner, and then put it up for sale. His expectations are based on the fact that some companies that had shelved plans to move into new space have announced they are considering resuming talks early next year.
Swan’s most important tenant is the eMag-Flanco group, which rented 3,100 square meters. The tenant list also includes an event center and the Best Chef restaurant, which rented 500 square meters.
David Allen is a 45-year old Englishman from Liverpool, who worked as real estate consultant for Knight Frank, after which he teamed up with several partners to form Chayton, a company that raised two funds (about EUR300 million) for investment in Central and Eastern Europe.
The first money was raised in 2006 when the 28,000 square meter plot in Pipera was bought; prices had not reached their peak back then.
Two years later, Chayton got almost EUR93 million from Investkredit and Bank Austria (currently UniCredit) to develop the project, on which it started work in 2009.
The investor began development in Pipera despite the crisis because the investment had reached an advanced stage and Chayton had the money. In addition, David Allen says, they were aware that it would take about two years to complete it and decided to split the project and the money in two and go ahead within the first phase of three buildings. The company has some land left for a 10,000 square meter building, which might be a three-star plus hotel, and for another 8,000 building.
The number one priority now is renting the space already built because Chayton Capital is paying part of the interest on the loan out of its own pocket.
(English version by Loredana Fratila-Cristescu)