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.”
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.
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.
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.
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 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.
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.