The real estate division of Deutsche Bank, a giant on the real estate market with almost 50 billion euros in assets, has set a new record on the Romanian market after it paid 340 million euros for the Upground project, which is under development in Northern Bucharest.
Upground will eventually include an office building and two apartment blocks, and will be developed over several stages throughout next year. The deal also includes a second office building, which will be built in the vicinity.
The project is being funded with a loan from Banca Romaneasca and is located close to Barbu Vacarescu Boulevard and Fabrica de Glucoza street, which separates the Lacul Tei area from Pipera, in the vicinity of Aurel Vlaicu metro station. Lacul Tei (Tei Lake) is a very active area residential-wise, with projects like Laguna Residence and Tei Lake Residences currently under development, while Barbu Vacarescu is seen as Bucharest's new business centre, with several towers under development. Upground is being developed on a 44,000 square metre plot of land and will comprise almost 600 homes and 100,000 square metre of office space, according to the initial statements of developers, which estimate the value of the investment at 260 million euros.
The developer is Upground Estates, controlled by British and Greek businessmen, one of whom is Ioannis Papalekas, who was once a shareholder in the City Mall Shopping Complex, through Jaguar Development.
He would retain a 22% stake in the project, said the representatives of the Nestor Nestor Diculescu Kingston Petersen (NNDKP), which have provided assistance to RREEF Real Estate, Deutsche Bank division, throughout the deal since last September.
The negotiations, which concluded on Friday, lasted eight months, whilst the deal was very complex and the lengthiest in the entire history of Biris Goran law firm, which assisted the seller.
"We worked on this deal since the initial agreement was signed with Deutsche Bank. The deal was very complex, because it entailed due diligence, the sale of future assets and companies, with lots of ongoing aspects before completion, which were hard to put in a contract," stated Gabriel Biris, managing partner of Biris Goran.
Gabriel Biris coordinated a team of three lawyers, while NNDKP put a team of 12 lawyers on the job, coordinated by two partners, Francisc Peli and Alina Radu. "The deal is a forward purchase agreement, which means the projects will be bought upon completion," NNDKP representatives explained.
The new residential buildings will include almost 600 apartments at prices that start from 173,000 euros plus VAT, while duplexes and penthouses may exceed one million euros.
"We started the sale of the first stage last December, which includes 120 apartments, starting from 1,600 euros per square metre plus VAT, and have pre-contracts for approximately 100 of them," Tudor Mihai, sales manager of Upground said. As this is a mixed project, with office and residential space, the deal did not revolve around a specifid yield on investment, but on the reference value of the assets from which expenses will be deducted.
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