Romanians to keep waiting for passport-free travel

In something of a kick in the teeth, the European Union has told Romanians and Bulgarians to keep waiting in line, when it comes to joining the Schengen zone of passport-free travel. Several countries had “reservations“, according to AFP. Perhaps concerned that such wordings were too diplomatic, the House of Lords in London said Romania shouldn’t have been admitted to the EU in the first place.

“The last six years indicate that post-accession conditionality achieves only slow progress. In future accessions, every effort must be made to ensure that all reforms are irreversible prior to accession, as post-accession mechanisms are both undesirable and unlikely to prove effective.”

GTC RO refutes rumors

So, we noticed an article on a Romanian site that claimed GTC was considering closing down some of its mall in Romania. That’s hardly unprecedented, when you think that Immofinanz is currently doing just that in Arad with one of the disasters it inherited from Immoeast when that company imploded (more on that in the Sept. issue of CIJ). But that’s not only a difficult process, time -consuming and sensitive, and it’s not really something one speculates idly about in an earnings report.

The news seemed to be related GTC’s release of financial data for the second quarter, in which it’s pretty up front about the fact that it’s rough in Romania at the moment (its portfolio there took a €14m valuation hit, apparently the victim of Romania’s it’d-be-funny-if-it-weren’t-so-serious political squabbles (hopefully over, now?) But closing malls seemed a bit extreme, and there wasn’t much hint of such a move when we last spoke with GTC.

So when we got through to them  headquarters in Bucharest, they weren’t any too thrilled by what they called rumors, nor could they figure out where they were coming from (outside of the usual suspects). In any case, while admitting that times are indeed difficult in regional Romania, CEO Shimon Galon derided the reports, calling them nonsense and saying there are no plans to close anything.

Papalekas and Dragos snap up Tower Center

According to ZF, the Tower Center on Victoria Square in Bucharest has been snapped up by Ioannis Papalekas and Bîlteanu Dragos, two of the strongest real estate investors in the local market. The two don’t tend to be excessively forthcoming about the deals they do, so it’s not a surprise that the pricing details haven’t surfaced yet. But they’re unlikely to have paid what the developers, Industrialexport and Avrig 35, originally envisioned, as ZF claims the building has no tenants yet. With its 22 floors and a height of 106 meters, it’s described as the tallest completed office tower in town since the doors opened in 2008.

UniCredit to finance AFI Business Park Cotroceni

AFI Europe has picked up €13.4m in financing from UniCredit Bank Austria, which it needed to get construction going on AFI Business Park Cotroceni in Bucharest. AFI Business 1 is the first of five class A office buildings the developer hopes to build that would add 70,000 sqm to Bucharest’s office stock. “We are impressed with the bank´s responsiveness and their ability to deliver the financing under the current tough market conditions,” said AFI’s CEO David Hay.

Bosch in Romania?

A local paper in Romania is reporting that the German automobile electronics supplier Bosch is considering investing as much as €60m into an industrial park in a Cluj-Napoca factory. The article says the company could hire up to 2,000 people to work at the facility.

Epstein begins Star Foods warehouse

Epstein Architecture & Engineering has begun building a finished good warehouse for Star Foods on the southern edge of Bucharest. The €2.5m scheme is an extension of the company’s existing manufacturing facility and will include a 4,500 sqm warehouse for finished products. Completion is expected by the middle of 2012. Improvements to the entire facility will be made at the same time, such as upgrading fire water supply, a new guard house and truck facilities.

Caelum begins ParkLake Plaza construction

The Romanian market may be hurting, but it’s certainly producing a decent number of retail schemes. Not only are around seven scheduled to open this fall, but another one has just gotten underway. Caelum Development has assigned Apolodor SRL and Edrasis – C. Psallidas SA to begin foundation work on Park LakePlaza, which will be constructed in the eastern Bucharest neighborhood called Titan. As is Caelum’s way, the scheme doesn’t lack for ambition, with 67,000 sqm of GLA envisioned for 200 stores. Construction is expected to take 30 months. Cinema City, a Cora hypermarket, and Pure Fitness Center are among the tenants already signed up, and the developer claims that 50% of the space has either signed leases or has heads of terms agreed.

Galleria Arad numbers

Galleria Arad, which opened last week in Romania, has already had over 100,000 visit it. In its first day alone, it saw 31,000 people come through the doors to browse through its 35,000 sqm of retail space. Anchor tenants include Cora, Inditex brands Zarsa, Bershka, Stradivarius and PULL&Bear, along with Peeraj Group’s Mango, Oviesse and others. The mall has an underground garage for 1,000 cars and some departments from the Municipality of Arad also have offices in the building. It’s the 11^th mall the developer GTC has opened in CEE.

Slovaks say no to bailout, Poles say yes to Tusk

-Slovakia’s parliament refused to approve a measure to expand the European bailout fund, making it the only Euro zone country to do so. Since Slovakia’s PM insisted the issue be linked with a vote of confidence, the government has fallen. The opposition Smer party looks set to support the bailout fund in a repeat vote (since it wouldn’t be supporting the government by doing so) and it’s thought this would be enough to get the measure through. It’ll be interesting to watch the fallout for Slovakia over this.

-On the other end of the political stability spectrum, Poland’s prime minister Donald Tusk won that country’s recent elections, meaning he gets another term at the wheel. His first term was marked by improved relations both with Germany and with Russia, and surprising economic success given the troubles experienced by the rest of Europe.

-Inflation in September fell faster in Romania than expected, slumping to 3.45. That’s the lowest level the country’s experienced in 20 years. Most economists had projected a rate of 4%. It could lead to a reduction in interest rates by the central bank.

Inditex takes Sibiu high street space

Zara will be opening a high-street store in the center of the Romanian town of Sibiu. The four-level outlet (a basement level, ground and 2 upper floors) spreads over 1,500 sqm in a building owned by a subsidiary of BCR. Reconstruction work will be required on the building.
“We strongly believe that other fashion retailers will target this kind of locations in the  medium and long-term, not only in Sibiu, but also in Bucharest as well as in other cities with potential for high street modern retail,” said Razvan Sin, head of retail for DTZ Echinox. DTZ Echninox mediated the lease.

H&M opens new Romanian stores

The Swedish retailer Hennes & Mauritz opened two new stores last week in malls developed by Iulian Dascalu: Iulius Mall Cluj and Iulius Mall Timisoara. The usual lines formed hours before the stores opened, demonstrating the brand’s continuing ability to bring in customers. H&M has eight stores in Romania, with five in Bucharest (Cotroceni Park, Unirea, Băneasa Shopping City, Bucureşti Mall Vitan and Plaza România), and one each in Brasov (Unirea Braşov), Timisoara (Iulius Mall Timisoara) and Cluj (Iulius Mall Cluj ). It’s one of a handful of retailers taking advantage of the current downturn in the market to secure stores in what it views as strategic Romanian locations.

Cluj airport upgrading runway

Construcţii Napoca, Icco Systems and Geo Arc have begun construction work on the first 2,100 meters of the new Cluj airport runway for €32m. The runway, will be 3,500 meters long, 60 meters wide and is expected to cost €32.4m. It’s to replace the existing runway, which will used by planes for taxiing. “The new runway will permit us to negotiate with other airlines which have requested higher standards,” said David Ciceo, the General Manager of Cluj-Napoca International Airport. In other words, better connections to the city should become possible.