Europolis poised to become a developer

Austria's Europolis investment fund, now controlled by Volksbank group, is in talks to develop office projects, after five years of project acquisitions.
Europolis, one of the biggest players on the real estate market, decided to change its strategy on the Romanian market and become a developer, because of the low market yields and the poor quality of projects.
"This year, we'll start project development activities. At the moment we're in a phase that involves the acquisition of land in Bucharest. We made this decision because yields on the Romanian market are dwindling and the quality of projects is not what we're looking for," stated Marian Roman, general manager of Europolis Real Estate Asset Management, the domestic subsidiary of Europolis. Rom an last August became head of Romanian operations of Europolis, replacing Stefan Gheorghiu.
"We'll develop office buildings with an area of over 10,000 square metres. For example, we're interested in developing office projects with as much as 40,000 square metres of space in the first phase," explained Roman.
Europolis will count on the development of office space, because of the current shortage of available space, and the demand from multinationals.
Since it entered the Romanian market, Europolis has invested around 454m euros in 5 real estate projects in various stages of development. In the wake of these investments, the company's Romanian portfolio accounts for around 21% of Europolis' portfolio across six countries.
The group's first acquisition was Europe House office building in Bucharest, for 30m dollars (26m euros), in 2003, which marked the first arrival of an investment fund on the domestic market. The value of the building has doubled over the past four years, and is worth around 70m dollars (50m euros), according to real estate consultants. Subsequently, in October 2004, Europolis bought Cefin Logistic Park. At the end of 2006, the fund announced the acquisition of two A-class office buildings part of Sema Parc business park, which was still under construction, from River Invest developer. The value of the deal with River Invest amounted to more than 90m euros.
However, Europolis does not plan to sell its various Romanian projects for the time being. "The projects we buy will remain in our portfolio for an undetermined period of time, and we will not consider selling them on medium term," states Roman.
Last year, the Austrian fund took over the combined real estate project in Barbu Vacarescu area of Bucharest, which is expected to cost around 220m euros depending on the project's development stages, and Cefin Logistic Park Arad for 34m euros.
Since the beginning of this year this year, Europolis, which controls assets worth 1.6 billion euros, has been owned by Volksbank AG and is no longer a subsidiary of Investkredit AG.

Europolis acquisitions
Entered the domestic market in 2003 by taking over Europe House office building in Bucharest
In October 2004 acquired Cefin Logistic Park logistic project and in July 2007 bought Cefin Logistic Park Arad
In October 2006 bought 2 office buildings with an area of 43,000 square metres, part of Sema Parc
Last year took over a real estate project from Cefin Real Estate that includes a hotel and a 35-storey office building