Every statement by an investor or a company developing anything nowadays includes terms like crisis, waiting, caution, no further planning, and strategy conversion. The plans optimistically drafted no more than one year ago have been frozen or even canceled. Sorin Nistor likes the word “caution” when describing his company's plans for its largest project, Sema Parc, and clarifies the general attitude to a project scheduled piece by piece with segmented budgets for each development stage.
“The overall uncertainty of the economic environment calls for prudence, which is a very important condition for any company planning complex projects on the long term, especially in real estate. All the entry data for a project, both technical and commercial, has changed and needs recalculation. Moreover, this changing process is ongoing and everything related to costs and income has become volatile,” said Nistor. The manager also points to the more and more unrealistic prognoses which, besides the general economic unsteadiness, results in caution.
Almost completed deal with Europolis, further plans for Sema Parc
Sema Parc, the current mixed-use designed project, represents an update of the initial project drafted three years ago, when the master plan was drawn up. Nistor says that the basic principles of this project remain unaltered, but components have changed in the meantime, such as the redesign of space, developments and commercial performances.
In 2008, Ion Radulea, the businessman who owns River Invest, announced he had abandoned the idea of building a mall in Sema Parc, saying that Bucharest already had too many malls. Instead, the mall was to be replaced by a commercial area as the main anchor of the entire park.
“Initially, the project considered a traditional mall built as a single construction. Now, the project targets a shopping village-type commercial area which will look like a group of urban buildings, to host commercial galleries, entertainment and green areas,” Nistor says.
Currently, the company is rethinking the business pattern of the development to suit the new economic background, according to representatives. This translates into a segmented budget for each component within the park – commercial, residential, office, four-star hotel – of which, Nistor stresses, bank financing plays the main role.
“The segment which has evolved so far and is subject to a potential financing contract comprises a group of four office buildings similar to the already delivered two. We are still in talks with several banks,” Nistor said.
Plans for 2009 including revamping the former industrial platform and a project of another four office spaces and residential compound. What has been nailed so far is the transaction between Austrian fund Europolis and River Invest following the fund's purchase of the two completed office buildings delivering 43,000 sqm of the park's first development stage. The forward-purchasing contract was signed in 2006 and the fund will soon pay the outstanding amount of a total deal estimated at more than EUR 100 million for the A-type office buildings totaling 80,000 sqm, of which 46,000 sqm is rentable area. The two-office building compound hosts tenants such as Zapp/Telemobil, British American Tobacco, Enel Romania, Tiriac Leasing, UPC and CMU.
The Sema Parc development, which was estimated to attract investments of EUR 1.3 billion, has nothing to do with the industrial compound Sema Parc, Nistor points out. “The industrial park was a temporary solution to use the existing industrial spaces of Semanatoarea but the new real estate development is different. According to the plans, the current Sema Parc project on 42 hectares will gradually replace the former industrial constructions and shrink the existing park. At the start, the company will play safe and build the office component, which will join the later developments of the retail and residential segments.
By the time of completion, Sema Parc is estimated to host around 100,000 people living and working within the developments. It is not a project to be sold, at least not for the time being, the company representative stresses with vehemence. “It won't be sold – of that there is no doubt. Any sale deal in this stormy economic weather, when all the things are unstable, would be a mistake. There have been different purchasing demands coming from investors for components of the park.”
By Magda Purice