The Africa Israel Europe real estate development firm, which is building the Cotroceni Park shopping complex in Bucharest, plans to buy three plots of land valued between 60 and 70 million euros within the next two-three months, for residential developments.
"So far we've paid 50 million euros for four plots of land for the proposed projects. We are in talks to acquire three more, in total worth 60-70 million euros and expect talks to be resolved within the next two months," stated Reuven Havar, CEO with Cotroceni Park. However, he would not reveal the location of the land proposed to be acquired.
The main shareholder in Africa Israel is Lev Leviev, one of Israel's wealthiest businessmen, who owns more than 80% in the company. Leviev is ranked 210th among the world's richest people, according to Forbes, with a fortune worth more than four billion dollars.
Havar explained that all the land purchases completed on the domestic market so far had been self-funded by the company, which was this time planning to seek financing from domestic banks for 75% of the value of each plot of land.
In addition, the company intends to float on the London Stock Exchange at some point this year.
"We proposed to do this from the very beginning, but the stock exchange entered a downward trend and we made the decision to wait.
"We may be listed on the London Stock Market by the end of the year and through this move hope to raise several hundred million euros," specified Havar.
The company reached an agreement with a German bank for a loan of more than 100 million euros, to be used for the financing of Cotroceni Park, which is being developed in partnership with the New Century Holding investment fund on the former UMEB Bucuresti site.
"At present we are working on the foundations and hope to designate a general contractor, in about one month's time, from among four firms we are currently in talks with," says Havar.
More than 60% of the 75,000 square metre lettable area of the Cotroceni Park project has already been rented out to businesses.
The second shopping centre the company intends to develop in Romania will be located in Arad involving investments that will exceed 50 million euros. The company bought a 1.7-hectare area of land located in the central area of Bucharest and is considering various development opportunities, with the potential possibilities including; a residential project, an office building or a combined project.
"All the plots of land have been acquired for development purposes. Like most developers, we are trying to derive yields of at least 12%. In the following years, yields will decrease towards around 6% in the case of acquisitions in Romania and we may consider selling properties, but the decision ultimately rests with the owners," specified the representative of AFI Europe.
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