EUR 265 million Palas Iasi opens its doors

The most expensive local real estate project outsideBucharest, worth EUR 265 million, was opened last week inIasi, easternRomania. The Palas Iasi urban ensemble was developed and is owned by Iulius Group, controlled by local businessman Iulian Dascalu.

The project, which took more than four years to build, consists of a 54,200-sqm shopping mall, three class A office buildings covering 20,000 sqm, a residential tower with 75 apartments, a future spa and two four-star hotels. The architectural ensemble brands itself as the first lifestyle center in Romaniaand has a total built surface of 270,000 sqm. It also features a five storey-underground parking lot and a multiplex operated by Village Cinemas which should be inaugurated in September. The project created some 4,000 jobs.

Palas Iasi is located in downtownIasiand was developed through a public-private partnership with the local city council. As a novelty, the complex is anchored by a 50,000-sqm public garden, which required a EUR 2.5 million investment. The facility includes a shopping street with 25 outlets and is located in the immediate neighborhood of the city’sflagshipPalaceof Culture.

Out of the entire investment required by the project, EUR 213.5 million took the form of loans from Unicredit Tiriac Bank, Emporiki Bank and Banca Italo-Romena. Dascalu says the project is a long-term investment and estimates that the money will be recovered in about 15 to 20 years.
Palas Mall is the fifth shopping mall opened by Iulius Group. The other four, which are branded Iulius Mall, are located in Timisoara, Cluj-Napoca, Iasi and Suceava. Last year the malls reported a combined turnover of EUR 41.4 million, down by about EUR 150,000 against the previous year.

The owner expects Palas Iasi to have traffic of 9 million visitors this year from Iasi and the entire Moldova region, and to report revenues of EUR 6.5 million, EUR 5 million coming from retail rents and the rest from the office segment. Next year the figure should increase to EUR 12 million, with EUR 8.9 million being generated by retail rents.

As for future plans, Dascalu says he has no intention of selling any of the projects he owns and for now the priority will be to consolidate the business. Next year the businessman wants to invest EUR 12 million in the first phase of an office building inCluj-Napoca near the mall he owns in the city.

Tenants in the Palas Mall include H&M, Massimo Dutti, Zara, Pull&Bear, Bershka, Stradivarius, Camaieu, Oysho, Tommy Hilfiger, Subway, C&A, Stefanel, Swarovski, New Look, Douglas, Humanic, LC Waikiki, Hervis Sports, Nikon – Yellow Store, Levi’s, Motivi, Oodji, L’Occitane, Sephora, Intersport, Ecco, Il Passo, Deichmann, Sony Center, KFC Drive Thru and Pizza Hut Deliver, among a total of 195 stores.