What properties you can buy for a billion Euro in Bucharest

Monday, Jun 25, 2012 | Post by TudorEstates

The Afi Palace Cotroceni mall, the Militari Shopping center, City Gate towers and the office portfolio of Austrian group Immofinanz could be bought at the moment for about one billion Euro, taking into account the values of these assets upon initial purchase, according to a ZF analysis.

Ziarul Financiar tried to create a shopping cart for an investment fund that would wish to enter the local market with a one billion Euro acquisition budget. This fund could purchase tow of the capital’s flagship projects in the last three years – AFI Palace Cotroceni mall and the City Gate officers in Piata Presei, along with other important properties. Israeli company AFI Europe has evaluated its Cotroceni mall at 350-370 million Euro, while another Israeli group, GTC, which holds City Gate along with Greek company Bluehouse, evaluated the project at 173 million Euro. A possible transaction with the two properties would set new records for the Bucharest real estate market, but these are very unlikely in the current market conditions. More exactly, the real estate market in the last three or four years had only one truly active buyer, the South African investment fund NEPI, which generally avoided investing in ‘flagship’ projects. AFI Europe and GTC have sufficient incomes at the moment to cover the loans taken in the development stage, so they feel no pressure to sell right now, but perhaps they will when investors return on the market.

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