Former manager turns mall owner: George Teleman buys into Vitantis and Moldova Mall through 5-euro investment

The value of domestic shopping centres has plummeted, so that many projects are worth less than debts to banks.

The value decline is also reflected by the latest deal through which East Balkan Properties (EBP) investment fund sold 51% in Vitantis Bucureşti and Moldova Mall Iaşi for the symbolic sum of 5 euros to George Teleman, the manager of five years of the London-listed fund's operations in the region.

EBP in 2006 paid 34.5m euros for Moldova Mall of downtown Iaşi and invested around 60m euros in Vitantis project located near Autovit car fair, properties that are now worth around 57m euros, while the debt to UniCredit stands at 58.4m euros.

"The plan is to further manage the shopping centres and wait for the market to pick up in four or five years' time. Management costs will be born by us, so that for East Balkan this deal will lead to falling expenses. This has been the idea," George Teleman told ZF. Annual project management charges revolved around 350,000 euros, according to EBP.