There are 14 years since the concept of benchmark real estate projects has appeared on the Romanian property market. And as always, the pioneers didn’t make it. Fortunately others made it, even if none of them has the first two dimensions and value of the planned Esplanada and Casa Radio projects.
One billion euros was the value estimated for Esplanada (2006) and Casa Radio (2006), the first benchmark projects proposed in the Romanian real estate industry.
Both foreign investments, Hungarian TriGranit for Esplanada and Israeli Plaza Centers for Casa Radio.
Esplanada’s chronicle begins in 2006, when Hungarian developer TriGranit made a deal with the Romanian authorities for the project, placed on 10.7 hectares land plot, close to Piata Unirii.
But around half of the land was claimed by initial owners and the state didn’t manage to compensate them in any way. Long story short, the EUR 1 billion project, with 800,000 sqm constructed area, which would comprise residential, office, retail, hospitality, social and cultural components, plus a 12,000 sqm and EUR 40 million building donated to state authorities, was stopped in 2011, and between EUR 1-3 billion direct and indirect investment was lost.
Now, the are is in the same shape as it was in 2006, and according to the Bucharest Mayor, Gabriela Firea, the area might host a cultural project.
The Casa Radio project has even a more complicated story. Like Esplanada, it was a partnership between the state, Plaza Centers and a Turkish company, in which the state owned 15 percent, and the Israeli company 75 percent, and the rest were owned by Turkish Kucuk.
Named around ten years ago Dambovita Center, the project value was estimated at EUR 927 million back in 2009.
In contrast to Esplanda, works were done few years at Dambovita Center, mainly demolishing parts of the preexisting structure in the area, in Eroilor, close to Dambovita River.
But in 2010, everything stopped, and now Plaza Centers is in reorganization and tries to sell its stake in the project, after it tried for few years to change the terms of the deal with the state.
The 550,000 sqm and around EUR 500 million project should have included an 11,000 sqm administrative building for the state, a casino, 90,000 sqm in a retail center, and 127,000 sqm of offices, a residential and hotel component, according to a presentation by Plaza Centers.
In 2016, the Israeli company announced that has become aware of certain issues with respect to certain agreements that were executed in the past by Plaza in connection with the Casa Radio Project in Romania.
“In order to address this matter, Plaza’s Board has appointed the chairman of Plaza’s Audit Committee to investigate the matters internally. Plaza’s Board has also appointed independent law firms to perform an independent review of the issues raised,” the statement reads.
Eight years have passed since the works have been stopped and there is plan in sight for the project to be finalized.
Recently, has been raported that the value of the project dropped EUR 10 million, to EUR 50 million and the rumors still surrounds de company and the project, including tentatives of corruption of romanian state officials.
The existing benchmark real estate projects
AFI Cotroceni & AFI Park, projects developed by AFI Europe include 88,500 sqm of retail and 68,500 sqm of offices, located in Western Bucharest. The total investment is around EUR 400 million, and the value of the project is around EUR 500 million.
Baneasa Platform, mixes retail, offices and residential which consumed an investment of EUR 256 million in Northern Bucharest. The developers, Baneasa Development, controlled by Puiu Popoviciu, recently convicted to 7 years in prison, and fugitive in United Kingdom, announced that it will invest EUR 300 million to extend the retail area with 127,000 sqm usable area until 2026.
Coresi Brasov it is until now a EUR 340 million investment. French Immochan, named now Ceetrus, developed 88,500 of sqm retail spaces, 68,500 sqm of offices and the residential component will include 3,000 apartments. If the investment continues as planned, the total value of investment will reach EUR 700 million, according to Tatian Diaconu, the company’s CEO.
Palas Iasi was an EUR 265 million investment of Iulius, Iulian Dascalu’s company. The project comprises 63,500 sqm office and 55,000 sqm of offices around Iasi Palace of Culture.
The same investor develops Openville, a EUR 220 million real estate project in Timisoara. Openville, which includes the refurbished and extended Iulius Mall, will have 63,000 sqm of retail area and 55,000 sqm of office area.
Romanian entrepreneur Ovidiu Sandor is betting EUR 130 million in Isho, a mixed-use project to offer 50,000 sqm of offices, retail spaces, 1,200 apartments and a socializing area with coffee shops, restaurants and terraces.
Another benchmark real estate project is born in Northern Bucharest, on Calea Floreasca, where One United Properties and Auchan are developing on a 2.8 hectares land plot a mixed-use project which include three components.
Three blocks of flats, a 50,000 sqm office building and old Ford factory hall that will be refurbished and transformed by Auchan in a retail space.
The residential and office components will attract an EUR 100 million investment; the retail side investment amount hasn’t been announced yet.