Capital city grows on western real estate avenues

Newsroom 22/09/2008 | 16:11

Real estate developers have discovered western Bucharest in the last year or two – an area formerly made up of old residential neighborhoods and factories. The main boulevards in the area have become home to several new residential projects, shopping malls and office buildings, most of them currently under construction or in the planning stage. One of these avenues, Timisoara Boulevard, will host 7,800 new apartments in the next couple of years, according to Business Review's calculations. It will also feature two shopping malls and several office buildings. Overall, this boulevard alone will attract investments exceeding EUR 1.4 billion, based on developers' announcements.

A project underway on almost every crossroads
Driving through Militari neighborhood from downtown Bucharest on Timisoara Boulevard one can see how the city is growing. One of the first construction sites to meet the eye is the underway AFI Cotroceni Park project, on the corner of Timisoara and Vasile Milea Boulevards. The construction itself has recently gone above the fence line, which used to hide the enormous hole in the ground, home to the project's foundations. Week by week, the project changes shape, but what is constant is the number of cranes serving the construction site. More than ten active cranes let passers-by know the derelict place will eventually be replaced by new buildings.
The entire project, a EUR 300 million investment by developer Africa Israel, is expected to fill the empty space on the street corner by the end of next year. A shopping mall of 120,000 sqm of built area and five office buildings will rise on the 12-hectare plot, which makes it one of the largest active construction sites in Bucharest. When finished, the shopping mall will be the second such development adjoining the Timisoara Boulevard, keeping the existing Plaza Romania company. The developers of the project, Africa Israel, hope to attract 670,000 people in the immediate catchment area, and 1.2 million people from the broader area.
Further along the same boulevard is the land plot on which Anchor Group is building its second office building, Anchor Plaza Metropol. The EUR 50 million project will bring 33,000 sqm of offices to a neighborhood of gray apartment blocks. It will not be the only office building in the area. Further away, close to the same boulevard, is Anchor's first office building – Anchor Plaza, which was erected at the end of 2006, following an investment of EUR 25 million. The office building is close to Plaza Romania, also an Anchor Group development. For many years, the shopping mall was the only new building on Timisoara Boulevard.
In its immediate vicinity, replacing the former Electrotehnica factory, Spanish developer Gran Via is planning to build 1,500 apartments in seven blocks of flats, some 35,000 sqm of offices and a four-star hotel. The entire project should require up to EUR 300 million, according to the developer's previous announcements.
Going further towards the outskirts of the city, several developers have secured land to build thousands of apartments. Gran Via has bought a second former industrial site, Frigocom, where it plans to build 1,300 apartments. The developer has previously announced plans to invest EUR 170 million in the project.
Hungarian Ablon will build its Sunset Residence project on a four-hectare site close to the boulevard. The EUR 170 million residential project will feature up to 2,100 apartments. It will be built in five construction stages, with the first started in the first quarter of the year. The delivery of the first 424 apartments was set for 2009. Further out, Israeli developer Technogroup will build 2,500 apartments within Infinity Residence, a project which will feature ten blocks of flats. Like all developers, Technogroup started out with a first phase, 450 apartments which will be ready in 2010.
Brancusi Residence, another residential development on Timisoara Boulevard, is close to national housing compound Brancusi ANL. The project, developed by local company Conimpex, will be made up of three blocks of flats, delivering 400 units.

Ghencea to host some of the largest residential projects in Bucharest

Ghencea Boulevard, an avenue almost parallel to Timisoara Boulevard, seems to have recently become a major attraction for residential developers. The area's major advantages are the availability of large land plots, on which developers can lay more than one block of flats, and the good connection to the city center. On days with fairly light traffic, it takes around 15 minutes to reach Unirii Square by car.
Initially, the area was targeted by local developers, who were either planning a block or two of apartments, or even entire compounds, and by individuals who have built villas in the area. Foreigners have now also come along with plans to build large residential compounds. Around 12,000 apartments are planned for delivery on Ghencea and Prelungirea Ghencea Boulevards, but the timeline for delivery for some of the projects goes even seven to eight years. The total investment tag for these projects could reach some EUR 1.5 billion, if they reach fruition.
Some of the largest residential projects in the area will be built on former industrial platforms. The former Tricodava factory, close to the crossroads between Ghencea and Brasov Street, was situated on some 54,000 sqm on the street corner. Spanish Gran Via has paid EUR 42 million for the plot, and plans to further invest EUR 185 million to erect 2,100 new apartments on the site.
Another foreign company, Israeli Dimri, has been buying land on Ghencea Boulevard. It has two plots of land there, which were acquired more than half a year ago. The company has started construction works on a residential project there, with plans to build 3,600 apartments in total. The first two phases of the project will deliver 1,100 flats by 2013, and will require an investment of EUR 135 million. The project will include residential blocks, office areas and retail. It is not the only compound in the area that will include smaller retail and office areas, as Prelungirea Ghencea Boulevard, which goes further out towards the Bucharest belt, lacks shopping centers.
Cartierul Latin will be a mainly residential compound which will feature around 2,500 apartments, plus a commercial center and recreational areas. The developer, local company Mixt Globus, intends to invest around 450 million in total in the project. Another large residential project in the area is the 3,000-apartment compound to be built by Spanish Hercesa in partnership with investment fund Bluehouse. The EUR 300 million project, which will be raised on some 13 hectares of land, will take seven years to complete.
Construction company Bouygues has recently announced its intention to build 500 apartments on Prelungirea Ghencea, a project which will require EUR 50 million in investment.

Offices and retail get in on the act
The area has not been shunned by office and retail developers. The former Ventilatorul, owned by investment fund Immoeast, will become a retail park, while an office building is close to completion in the area – Ghencea Business Center, some 11,000 sqm of offices.
The lack of a metro line connecting the area to downtown Bucharest and the poor infrastructure in some areas have not deterred developers, who have chosen to start residential projects in western Bucharest – mainly in the Drumul Taberei and Ghencea neighborhoods. The state has promised a metro line connecting Drumul Taberei to the rest of the city, as well as improvements to the street infrastructure to offer drivers more than two or three over-crowded boulevards exiting the area. The metro line connecting Drumul Taberei to downtown Universitate area is on the list of future projects, and could soak up as much as EUR 500 million to reach completion, an operation which will take at least five years.

By Corina Saceanu

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