Real estate developer TriGranit, controlled by Sandor Demjan,Hungary's richest businessman, says one can no longer sealtransactions for projects that are only on paper, because there isa major lack of trust between investors, banks and tenants.
"Malls cannot be leased off-plan any more. You can talk toretailers, explain things to them, but until they see the building,they don't commit to open the stores. There is a trust crisisacross the entire region (Central and Eastern Europe), and the onlyproof you can come up with to show you are a healthy company arethe projects you continue to make developments," Arpad Torok, thecompany's development manager, told ZF.
TriGranit has around 60 employees on the Romanian market, who areinvolved in the management of shopping centres Polus Center inCluj, Euromall Pitesti, and Armonia Center in Arad, as well as inthe development of Constanta's Polus Center, which is set forcompletion in around one year's time.
"No-one has been sheltered from the financial crisis. We have hadto renegotiate our bank funding structure and to alter the mall'sdesign due to soil-related problems that forced us to make thebuilding 1 metre taller. As for the funding of the project, weagreed with OTP for our share of equity to be larger," said ArpadTorok, development and leasing manager of TriGranitDevelopment.
TriGranit is developing the Constanta mall that Austrian-basedImmoeast has committed to buy as early as in March 2007, with thedeal put at 185 million euros.
The mall's construction has been delayed by over a year, similarlyto all projects of the Immoeast fund, which this year hasexperienced serious financial problems.
"The project currently entails a 140 million-euro investment, whichincludes tenants' costs with setting up the stores. Immoeast'scommitment to this project remains in place, but I cannot providefurther comment on this," Torok added.
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