AFI Europe ups investment in Cotroceni Park, buys out partner

Moreover, the developer has bought the shares of its partner in the project, New Century Holdings (NCH). The latter mainly contributed with the 12 hectares of land the mixed project is being built on. The land used to belong to the electrical equipment maker UMEB. By the end of the year AFI will become the sole owner of the project. “We will pay around EUR 78 million for the 50 percent shares held by NCH and we will be the only shareholders in this project from December,” said Reuven Havar, CEO of Cotroceni Park. The developers had trouble finding an entrepreneur for the project and had to organize the bid twice. “It was very hard to find a good entrepreneur for our project so we had to pay more than expected,” said Havar. Eventually, the company selected entrepreneur Danya Cebus, a company from the same group as AFI Europe. The contract between the two parties was signed on October 23 for EUR 158 million. The sum covers strictly construction and excludes other elements such as demolition or excavation. Thus, the budget for the construction of the mall will roughly amount to EUR 200 million while the hotel and the five office buildings, currently in the design stage, will require investments of approximately EUR 100 million. Besides the mixed Cotroceni Park project, AFI Europe is planning to allot EUR 500 million to building up to 4,000 apartments and possibly a commercial center on the premises of Laromet factory in Bucharest. The company has recently bought the 15.5-hectare Laromet site for EUR 77.5 million. The Israeli developer is also entering the Ploiesti real estate market with a commercial center and up to 400 apartments. It is currently negotiating the purchase of the land. Cotroceni Park will feature 200,000 sqm of built area, out of which the shopping center will occupy 120,000 sqm. Cotroceni Park will comprise five other buildings of 100,000 sqm of at most 15 stories. One will most likely be a hotel and four will be office buildings. The project should be ready by the end of 2009. The commercial center will include over 250 shops, hypermarkets, a fast food court, gym and 20 cinema screens. The mall is 80-percent rented. The biggest tenants are Real hypermarket with 15,000 sqm and Cinema City with 12,000 sqm. Approximately 75 percent of the rented area will be for fashion, and 10 percent for leisure, restaurants and fast food. The financing of the project will be met by loans. “We are close to signing the contract with the bank that will finance us,” said Havar.

Otilia Haraga, Corina Saceanu