Equest to switches lenders, drops project over financing issues

Equest had initially negotiated receiving the loan from a local bank, but it had to choose Raiffeisen instead due to the protracted discussions with the local bank, George Teleman, fund manager with Equest, told Business Review. Without mentioning the name of the bank, Teleman also said Equest has been negotiating for the loan with the local bank since October last year, but had to switch to another bank in order to obtain the loan more quickly.
“To have obtained this financing in line with our objectives and at competitive market terms is particularly encouraging in the light of the current more challenging credit environment,” said Michael Uhler, CFO at Equest Partners.
In 2007, the fund received a EUR 37.8 million loan from Bank Austria Creditanstalt, in order to finance works at Vitantis Retail park and other projects in Romania.
Equest Balkan Properties had to give up on an office project in Iasi, which was initially in its pipeline of projects, due to the lack of financing, Teleman also told BR. “We have discussed with other investors, which indirectly are also investors in Equest, and they have taken on the project,” he said.
Teleman is acting as manager for the project in Iasi. The investors have bought the 2,500-sqm Sinta office building in the city and their plan was to attract further financing and build a bigger office building on the site, with an expected EUR 20 million investment. “Considering the current state of the financial market, it is now possible even to sell the building,” Teleman told BR. He denied the media reports that a residential project was to be built on the site. The project in Iasi is in its urban zoning plan (PUZ) approval phase. One of the main effects of the credit crunch in European states has been more difficult access to financing, which has put the brakes on many investments and has halted real estate deals.
Equest Logistics Centre, the project for which Equest has recently taken out the loan from Raiffeisen, consists of 11 hectares of land situated within the Bucharest West Logistics Park development. The company acquired the site in April, 2007, for EUR 5.4 million, with a further EUR 34 million budgeted for the development of over 56,000 sqm of logistics warehousing and office space.
The first of the project's three buildings opened in February, with the second scheduled for completion in August. To date, the development has attracted tenants such as Paper Plus, Germanos Telecom and BDG. The development is located adjacent to the A1 Highway, 10 km from central Bucharest, with direct access to the Black Sea and Otopeni, Bucharest's international airport.

Corina Saceanu