The most ‘expensive’ projects in the city entailed more than EUR2 billion investments and if a ranking were compiled by budget allocated, the Floreasca City should rank third after development in Baneasa and the investment of AFI near the Polytechnic University of Bucharest in the west of the city, according to a ZF analysis.
The real estate development in the past decade has changed important parts of Bucharest, with fields on the outskirts of the city or plants inside it like UMEB, Aerofina and Semanatoarea replaced by malls and office buildings that required billions of euros in investments.
Out of the over 900,000 employees in Bucharest, more than 700,000 are working in the services business now and only 200,000 in industry and construction sector, which clearly shows the direction the city has taken in the past decade as a hub of financial institutions, IT, communications and outsourcing cluster and local headquarters for many multinationals.
The latest radical conversion of an area of Bucharest will be completed this Thursday when the Promenada mall opens. Promenada is part of the Floreasca City development by Austria’s Raiffeisen Evolution, which also includes the office buildings Sky Tower and Floreasca Office, completed last autumn.
The development cost EUR300 million and the office buildings were bought by Raiffeisen Property, the real estate division of the Austrian group, which financed the development of the mall.
The development was done on the site of a former plant that had only two employees left and less than EUR400,000 revenue last year, according to the Finance Ministry, as much the expected sales in two days for the soon to open Promenada mall.
The Austrian investors used the land to develop a mall with a lettable area of 35,000 square meters, two office buildings with a lettable area of 57,000 square meters and about 2,000 underground parking spots. Annual rental income should reach EUR20 million to EUR25 million, once the space fills up, according to ZF estimates.
The largest development in Bucharest, on the land once used by Bucharest’s University of Agronomic Sciences, includes Baneasa Shopping City over more than 100,000 square meters, the first phase of the Baneasa Business & Technology Park and of the Baneasa Residential. The investments made by the two businessmen who undertook this development, Gabriel Popoviciu and Radu Dimofte, have reached about EUR350 million so far.
Israeli-held AFI Europe invested EUR300 million in the AFI Palace Cotroceni mall alone, one of the most spectacular such buildings in SE Europe and started adding office buildings around it after about EUR20 million investments per building. The first of them has already been completed, while the other two are under construction and should be delivered in 2014.
Greek businessman Ioannis Papalekas developed two office buildings with a floor area of 80,000 square meters on a 4.4 hectare land on Dimitrie Pompeiu Boulevard in northern Bucharest, as well as two apartment towers 17-story tall each, with almost 600 apartments. This is known as the UpGround project, which required about EUR250 million total investment, according to ZF’s estimates. The office towers, BOB and BOC were sold to a fund of Deutsche Bank, but Papalekas was in talks to buy them back.
Another more than EUR200 million investment is Sun Plaza mall and the over 10,000 square meter Sun Offices building in southern Bucharest. Austria’ s S IMMO opened the two in 2010.
Local businessman Liviu Tudor invested more than EUR300 million in Novo Park and West Gate in Bucharest. The budget for the West Gate located in Militari, west of the city, stood at more than 150 million, considering it includes five office buildings (75,000 square meters) and three buildings with 1,000 studios and apartments for rent.
Three more office developments got over EUR100 million investments each: Immofinanz’s IRIDE Business Park in Pipera, the City Gate towers developed by GTC and Bluehouse in Piata Presei Libere (Free Press Square also north of the city) and the Petrom City in NW Bucharest (Straulesti), housing Romania’s largest company.
(English version by Loredana Fratila-Cristescu)