Belgium's real estate development company BelRom, which specialises in retail park construction, plans to develop projects in another 5 Romanian cities, after it acquired two land plots last week, in Botosani and Drobeta-Turnu Severin.
"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, in terms of shopping centre developments, does not apply to Bucharest, where the Belgian company this year paid 60m euros for a 9-hectare land plot in Colentina, where it plans to develop a retail park and two office buildings.
The first retail park BelRom finished domestically, in Sibiu, was bought, at the end of last year, by Britain's North Real Estate investment fund in a deal worth 83m euros.
Decoopman says shopping centres outside Bucharest are now selling at yields between 6.75% and 7% in euros, per year, although by mid next year the level is expected to drop to 6.5%.
"We are also considering holding onto the retail parks for a period, given the shrinking yields. At the same time, we also have the possibility of selling some of our properties in packages," says Decoopman, explaining the company's alternatives for the future of its retail parks.
Decoopman says BelRom's profit margins from the sale of the projects in its portfolio range between 30 and 40%, taking all the expenses, including loan costs into account. The three Belgian businessmen involved in the company (Carl Decoopman, Steven Vandenbosse and Hendrik Danneels) are responsible for securing initial financing.
The shopping centre market is witnessing a boom, with around 100 new centres announced for the future, throughout all the major cities in Romania.
"The retail park market will be saturated in two years as far as we are concerned. We've noticed a strong growth on the office and residential segment and are considering expanding our operations," says BelRom's manager.
After 15 years in Romania, Decoopman has managed to form strong relationships with several major retailers.
Decoopman has a series of cities, such as Iasi, Suceava, Oradea, Timisoara, Constanta and Brasov, where he rules out retail park development given the high number of projects already announced.
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