Real estate developer BelRom, controlled by a number of Belgian businessmen has bought two further plots of land in Botosani and Drobeta Turnu Severin, where it intends to build two more retail parks.
"We signed the deal in Severin on Tuesday, after we acquired the land in Botosani on Monday. Both lots for which we paid a total of 30 million euros will be used for development of retail parks, which will entail cumulated investments worth 100 million euros," Carl Decoopman, manager and one of the company's shareholders told ZF.
The lot in Botosani is located inside the city and covers 4 hectares, while he project's investment is estimated to be worth 40 million euros. The lot in Severin is located by the orbital road and covers 10 hectares, while the investment is estimated at 60 million euros. According to unofficial estimates, BelRom paid around 300 euros/square metre in Botosani and 180 euros /square metre in Severin.
The large number of retail projects in Romania's major cities, with more developed economies, has pushed real estate investors towards somewhat smaller cities, which, however, provide "exclusivity" when they enter the market.
BelRom is the most active retail park developer on the domestic market, with two investments finalised so far, in Sibiu and Targu Mures. The first project completed in Sibiu was sold to UK's North Real Estate Fund, which paid 83m euros for the development last year.
The Belgians' expansion plans do not stop here, with the developers considering another five cities in the country.
"We don't have any preferences about cities. They only need to have a population greater than 100,000 inhabitants and our retail park needs to be the first in the city. The strategy is to develop and sell as fast as possible, after the project has been completely rented," says Carl Decoopman, BelRom manager, who explains the company's strategy.
Exclusivity about retail developments excludes Bucharest, where the Belgian company bought a nine-hectare plot in Colentina this year, where it will build both a retail park and two office buildings.
"We believe Colentina is a good area for offices because it will shortly have easy access to the Brasov highway. Office buildings will offer 20,000 square meters to let, while the retail park will take up 100,000 square meters," Decoopman explained.
He says shopping centres outside Bucharest are selling for a 6.75% - 7% yield in euros a year, which will go down to 6.5% by mid next year. The company has five other projects in development throughout the country in Bacau, Braila, Deva, Focsani and Ramnicu Valcea so that the portfolio developed by BelRom is expected to reach at least ten retail parks in the coming years.
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