Two of the biggest companies in Israel, Africa Israel and Europe Israel, are set to build two multifunctional real estate projects in Bucharest (Dambovita Center and Cotroceni Park), which will entail cumulated investments worth almost one billion euros. The two companies have announced investments on the Romanian real estate market worth around one billion euros each.
"Within two or three years we could start another real estate project in Romania, with investments worth two billion euros," Mordechay Zisser, chairman and majority shareholder of Europe Israel group told ZF. The group includes Plaza Centers, which will develop Dambovita Center.
The Israel-based real estate development companies are probably the biggest investors on their respective market in Romania, and even compete directly.
Less than two kilometres away from the Dambovita Center project, in the Eroilor area, is the site of Cotroceni Park, which is being developed by Africa Israel, a company controlled by another powerful Israeli businessman, Lev Leviev.
Africa Israel will become the sole shareholder of Cotroceni Park in December, after it struck a deal with New Century Holdings to buy the Americans out of their 50% stake in the project, in a deal worth 78 million euros.
"Africa Israel are our friends and our competitors. Israel is a small country, with only six million people, which is why entrepreneurs have gradually spread to countries like Hungary, Poland and more recently Romania. Considering the size of the country, the local market will play an important part in the long-term strategy of the company," Zisser added.
With Cotroceni Park and Dambovita Center malls located close to each other, the developers have been forced to find diverse solutions to appeal to customers to stay as long as possible in their shopping complexes, rather than just clothing stores and regular cinemas. Cotroceni Park will feature Bucharest's first 3D cinema (IMAX) as well as a skating rink, while Dambovita Center will have a panoramic wheel (60 metres in diameter) modelled on a similar wheel in London, and a 95 metre high artesian well.
Africa Israel recently appointed a general contractor for Cotroceni Park, and set the deadline for the project's completion as 2009.
On the other hand, the developers of Dambovita Center expect to get the construction permits at the end of this year and estimate to have the whole project completed within 40 months (by 2011).
Investments figures have been revised upwards for both projects. As a result, Dambovita Center will require around 600 million euros and the development of Cotroceni Park, which includes office buildings and a hotel, will cost more than 300 million euros.
"The mall's construction works will entail around 180 million euros in investments, without taking land costs into account, while the office buildings and the hotel will roughly require another 100 million euros," said Reuven Havar, Africa Israel country manager.
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