Austrian Europolis Group, one of the leading real estate investors in Eastern Europe, has announced its second extensive investment in the Romanian real estate market.
Europolis bought the Europe House office building for around $30 million last autumn and is now involved in a 65 million euro logistics project developed by Cefin, Iveco's top dealer in Eastern Europe.
"We were early movers in Poland, Czech Republic and Hungary, and this is how we'll go about things in Romania also," said Bernhard Mayer, Europolis' chief executive.
The deal between Europolis and Cefin first entailed acquisition by the Austrian group of the developer of the Cefin Logistic Park, which is currently in the first of three scheduled development stages.
"We invested 12 million euros over many years on the Romanian market, so there was no way we could have afforded 65 million euros for this project. It was only natural that we should be looking for a partner that is strong, financially, and that would invest in the further stages of the project estimated to be finalised in 3 years," Stefano Albarosa, Cefin CEO explained.
Given these circumstances, the investment required for phases two and three of the Cefin Logistic Park project will be made by Cefin with cash supplied by Europolis.
"This provides for Cefin's safe exit from this business very shortly after entering it," Mayer added. The Cefin official was of the same opinion, though none of them were willing to specify exactly when Cefin is planning to exit.
"We needed the return on investment to occur within a very short time, which would have required a profit rate of about 15%-20% a year, and that is impossible to achieve in this business. This partnership has secured a quick return on investment, while Europolis stands to gain in the long run," Albarosa explained.
Under the circumstances, the total project might be worth 75 million euros, depending on demand from potential tenants.
Cefin Logistic Park covers more than 30 hectares, and has buildings on 150,000 square metres. Several other logistics projects are now in various phases of development, but judging from its sheer size, Cefin Logistic Park is set to remain the largest.
"The industrial segment and primarily logistics services have big potential on the Romanian market. Last year was the first time when demand for quality space increased, only to have supply and demand develop side by side this year. I believe we won't witness an unprecedented boom in this sector any sooner than next year," commented Tim Wilkinson, head of the commercial department of DTZ Echinox real estate company, the specialised consultant for this deal.
ionut.bonoiu@zf.ro
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