Reuven Havar, the country manager of the real estate developer Africa Israel, which is controlled by Lev Leviev, one of the richest businessmen in Europe, explains that yields remain satisfactory, although land prices have increased dramatically over the past year.
In its latest transaction, Africa Israel acquired the 155,000 square-metre area of land on which the Laromet plant is located in Bucharest for 77.5 million euros, in a deal excluding the actual plant. This could be the company's most important project on the domestic market, given the size of the land and the price paid. The development of a project on this site entails total investments worth approximately 500 million euros.
"All our projects are large scale ones and all our investments in land have been conducted in order to accommodate future constructions. We are not land brokers. Within the next few years, we estimate we will achieve total investments worth one billion euros in Romania," said Reuven Havar.
The company has six ongoing real estate projects in various stages of development. Africa Israel primarily develops office projects, commercial spaces and residential complexes.
The transaction involving the acquisition of the Laromet land is in a due diligence stage and could be completed within the next couple of months, specified Robert Rosu, a partner with the Tuca Zbarcea & Asociatii (Tuca Zbarcea & Partners), the company which provided counselling to Laromet for the sale of its assets.
Rosu also specified that the company is profitable and that its management team will retain its offices in the future project, after relocation.
The company's most advanced project on the domestic market is the Cotroceni Park shopping centre, developed in partnership with the investment fund New Century Holding (NCH) and involving investments worth approximately 200 million euros.
"The rate of rented space in Cotroceni Park has slowed down over the summer period, but 72% of the spaces have already been let," explained Havar.
The company has had a difficult time finding a general contractor among domestic construction companies for the project developed on the UMEB platform, which is why it is currently in talks with three foreign companies that do not have a direct presence in Romania.
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