After two office buildings, Emil Pop wants to become part of a higher league of developers through investments worth 62m euros in the office and housing segments and in Stirbei Voda Palace, reads BUSINESS Magazin magazine.
"Why pay rent when you can own it?" this is how Emil Pop summarises his business model related to the development of office buildings.
The businessman develops office buildings, but prefers to sell directly to companies that would otherwise rent space, rather than sell to investment funds or lease the units.
The first two such projects, two small office buildings, have already been finalised and sold to TMK Artrom and Centrul Medical Unirea, with the cumulated value of 10m euros.
Pop, who entirely owns Eka group of firms, believes this is the best business model, while one of his arguments is that future buildings are developed to the owners' specifications.
The buildings were sold at a yield of 6.8% and 7%, respectively. Pop calculated the deal yield on the basis of the average level of rent he could have asked for had he leased the buildings.
Pop uses financial indicators as motivations for new projects. He has already started to build another two office buildings, which he plans to sell directly to companies.
The two buildings will have an overall area of around 8,000 square metres and will be ready at end of the year and early next year, respectively. Investments in the two projects are estimated at over 8m euros.
However, the biggest bet will be the fifth office building, Eka Business Center VII, with an area of 20,000 square metres.
The new project has already been launched, will require investments worth 20m-euros and is set for completion in the second quarter of 2009.
"It's a highly specialised business model because not many companies want to own the building where they operate," believes Horatiu Florescu, deputy chairman with Colliers International. DTZ Echinox consultants, however, believe the number of firms that are interested in buying an office building to use as headquarters is quite high compared with the low supply.
Eka will start another two projects this year, in partnership with other investors, with investments worth 10m euros.
The project expected to draw most attention, though, will be the one around Stirbei Voda, located in Buftea.
"The first stage will entail fitting out the park, the chapel, and Stirbei Palace, while the second stage will entail the construction of several buildings for major events", namely a four-star hotel, a conference hall, a residential area and a casino in the medium run.
Overall investments are expected to reach 60 million euros.
Emil Pop
Develops office buildings, but prefers to sell directly to companies that would otherwise rent space, rather than sell to investment funds or lease the units
Wants to become part of the higher league of developers through investments worth 62m euros in the office and housing segments and in Stirbei Voda Palace
The project expected to draw the most attention, though, will be the one around Stirbei Voda, located in Buftea
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