Upground builders paid in apartments

Developers of the Upground project in the Pipera district of Bucharest have transferred 60 apartments as part of a barter agreement to Lufin Construct, one of the constructors of the residential complex, whose completion is set for August next year.

This is a method less used by real estate developers in the past, but which currently enables them to solve two of their problems: get rid of the apartments, which are increasingly difficult to sell and pay a part of the construction costs.

"We have 60 apartments for sale in the Upground complex, which we secured as a result of a barter agreement signed with the project's developers from the very start. The project's building structure has been erected, now we are working on the masonry, and the first block will be delivered in August of next year," said Bogdan Botez, manager within Lufin Construct.

The construction firm posted a 36 million-euro turnover in 2008, according to data from the Finance Ministry, with the company's shareholders being Adrian Manolescu and Victor Badescu, according to Botez.

Upground is a complex made up of two 600-apartment blocks located next to two office buildings completed in Pipera, with all four properties being part of a transaction whereby the developers, a group of Greek and British businesspeople, headed by Ioannis Papalekas, is transferring the assets to a fund of German bank Deutsche Bank, in a transaction estimated to be worth 340 million euros.

Apartments in the Upground project currently being built on the Fabrica de Glucoza street in Pipera cost around 1,700 euros/square metre plus VAT.

"As far as I know, around 300 of the project's 600 apartments have been sold," Botez said.

According to Lufin Construct's website, the company has also been involved in building residential complexes Asmita Gardens, Ibiza Sol, and Brilliant Condominium in Bucharest, as well as mixed project Metropolis Center close to Victoriei Square in Bucharest.

One of the two office buildings in the Upground project has a 57,000 square-metre gross lettable area, being the largest in Bucharest at present.

This year, an investment fund of German bank Deutsche Bank has taken over this property rented out to Banca Romaneasca, the project's financer, and to market research company GfK.