Gea Prasa needs 15m euros to finish 252 apartments in Laguna Residence

Gea Prasa real estate developer, controlled by two families of Spanish investors, needs around 15m euros to finalise the first stage of Laguna Residence housing complex made up of 252 apartments located on the banks of Tei Lake of Bucharest, whose construction is around six months late.

"We are late because of the troubles we've had with subcontractors and of the financial crisis that is hurting everybody. At present, we need a further 15m euros to finish the project and we're in talks with a bank for the financing of the last part of the construction works. We could continue construction works even if we do not secure the necessary financing from the bank," stated Rafael Ordas, general manager of Gea Prasa in Romania.

The project entails investments of around 45m euros, according to Ordas, and the delay prompted part of the buyers to ask for their advance payments back or the reduction of apartment prices.

"We have pre-contracts for around 100 apartments in the project and except four cases I believe that with the rest of buyers we'll sign additional contracts to extend the delivery term until late June. People who signed were offered discounts, depending on the purchased apartment, of 10% or even more (...)," Ordas says.

He says around 50 workers were on the site of the project last week. "When we get to finishing works, we will be able to step up the construction process," says Ordas.

Sales within the project have been extremely weak this year, when Ordas says he sold around 1-2 apartments per month. As a result, prices also dropped, from an average of 1,800 euros per built square metre to around 1,500 euros/square metre, so that the cheapest unit, a two-room apartment, now costs around 130,000 euros plus VAT.

Laguna Residence is developed on a 53,000 square metre plot of land and comprises several 3-7-storey blocks.

Gea Prasa also owns the site of former edible oil plant Muntenia of Viilor area in Bucharest and two plots in Constanta, with the value of investments domestically revolving around 200m euros.