Real estate investment fund Eastern European Property Fund (EEPF), listed on the AIM market of the London Stock Exchange, intends to acquire three real estate properties in the Capital by the end of this year, with a total value of up to 20 million euros.
"We estimate that within the next three months, we will make another three acquisitions on the Romanian market, with a cumulated value of up to 20 million euros. Two of the projects are already completed buildings designed for retail purposes, and the third is a forward-purchase for a logistics centre. All acquisitions will be made at yields of 9 to 10%," Oliver Cadogan, finance director of Active Property Investments Limited and a member of the investment committee of the EEPF (in charge of investments in Bucharest) told ZF.
The company plans to expand its activity on the domestic market, while at the same time maintain a high yield level in order to meet shareholders' expectations.
The investments of the UK-based company are made at much higher yields (at 2005 and 2006 levels) than the market average and large-scale projects, located in central areas and rated as high-class, are traded at yields of around 6.5% or even lower.
"Yields have to be tightly connected to interest rates. If rates remained at a level of 3-4% for several years, there would be no problem in making investments with a 6% yield. Additionally, rents are already quite high in Bucharest, so it is unlikely they will see a significant rise," explained the EEPF representative.
EEPF raised 20 million pounds sterling (almost 30 million euros) on the London Stock Exchange at the start of the year, for investments in Turkey, Romania, Bulgaria and Ukraine, which have been entirely invested. The only investment conducted in Romania was the takeover of the Transalkim warehouses in Southern Bucharest, which entailed an investment worth around 4.3 million euros.
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