The Diplomat Bucharest

Sonae Sierra: up to three new projects by end of year

Portuguese shopping mall specialists will add to its business in Craiova, Ploiesti, Bacau and Ramnicu Valcea some new locations by the end of 2008

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Portuguese shopping centre specialist Sonae Sierra will begin the development of two or three new mall projects throughout the country by the end of this year.
“We are looking at ten locations countrywide and we will commit to two or three more projects by the end of this year,” Ingo Nissen, managing director for Sonae Sierra tells The Diplomat.
The company has started work on building its first shopping centre from scratch in Romania in Craiova, Dolj county. The shopping and leisure centre, set for delivery by 2009, is an investment of 142 million Euro and will have a gross lettable area of 55,537 sqm and around 1,900 parking spaces.
For the group’s second mall, in Ploiesti near the motorway to Bucharest, Sonae Sierra is still working on gaining permits. “We will forward them to the authorities in a short time,” says Nissen. “We expect the building permits later this year.” This 64,070 sqm construction aims to see delivery in 2010.
Each shopping centre aims to follow a concept that matches the specifics of the area where it is located. The mall in Craiova will illustrate the theme of “four seasons”, while in Ploiesti, there will be an “industrial” theme.
Last year Sonae Sierra acquired River Plaza Mall in Ramnicu Valcea and will also manage the Arena Mall in Bacau. “Our first priority is to develop shopping centres, management comes second,” says Nissen. “We will invest in the management or expansion of shopping centres developed by other companies, only if we see growth potential.”
Many developers do not provide management after concluding the leasing contracts with the tenants as their policy is to build cheap and sell at a cost.
But Sonae Sierra will hire a domestic management team, which will be trained in Portugal in experise in different sizes and locations of shopping centres.
Nissen says the best location for a shopping mall is in the city centre, where customers can walk, not travel by car. “We prefer downtown locations, but we do not rule out the possibility of development outside the city,” adds Nissen. This would also be suitable for metropolitan areas where two large towns are close to one another, such as Braila and Galati.

Half-billion Euro mall

Sonae Sierra and Irish developer Caelum Developments will develop a shopping centre, Parklake Plaza, on Strada Liviu Rebreanu in the east of Bucharest.
Possibly the largest mall in the country, the area is set over 110,000 sqm gross lettable space. The total investment in the project is estimated at 591 million Euro and is due for delivery in 2011.
The east of the city lacks a large-scale shopping centre project, although this will be a direct competitor to the first mall open in the capital, Bucuresti Mall on Calea Vitan.
Despite the large size of this centre, the company is looking at more opportunities to develop in Bucharest. “The capital can have more than one Parklake Plaza and one Baneasa Shopping City,” says Nissen. “If there is another opportunity that we can find in Bucharest we will take it.”
Romania is the only country in central and eastern Europe where Sonae Sierra is present at the moment. The company investigated countries like Poland, the Czech Republic, Russia and Ukraine, but decided not to enter markets where they found too many competitors.

Bucharest: suffering mall saturation?

Is Bucharest building too many malls? According to Jones Lang La Salle, in western European countries, the average retail space in shopping malls per 1,000 inhabitants is 175 sqm. Therefore a city with around 100,000 inhabitants needs around 17,500 sqm gross lettable area.
This means that Bucharest, with a population of three million, needs a quantity of GLA necessary of around 525,000 sqm.
From all the malls that currently exist in Bucharest and the serious projects to be delivered by 2010, this amounts to 949,000 sqm in gross lettable area, almost twice the rate in the west, according to The Diplomat’s data.
Shopping centre development is not an exact art and Bucharest may be seen as an exceptional case because its high streets are so undeveloped, but the disparity between these two figures will be cold comfort for some developers investigating the capital for new retail opportunities.

By Corina Ilie

Property of the month

Attractive attic brightens interwar villa

KISELEFF Built in the 1930s by the Romania’s central bank on the site of a horse-racing track, this 330 sqm inter war villa is on sale for two million Euro from real estate agency Eurocasa Estate.
Recommended either as a residence or as an office, this sparse and open villa is enlivened by a converted attic, with wooden interiors reminiscent of a hunting lodge, which also includes a kitchen, bathroom and small bedroom.
Renovated in 2000, the villa needs fresh refurbishment to its facade, which has a simple architectural rhythm, with a symmetrical design and only a few oriental motifs.
The villa has not yet been equipped with a burglar alarm or interphone and the original ceramic stoves have been replaced by central heating. Parking is available for two cars in the garage inside the garden, while the basement includes a room designed for exercise equipment.
Although more families could reside in the three apartments contained in the house, with a total of ten rooms and four bathrooms, privacy is limited as the access to the apartment in the attic can only be made through the apartment on the second floor.

For more information call
Viginia Paleologu, Eurocasa Estate
on 0741 08 08 40

Inside facts
• Price: two million Euro
• Built: 1930s
• Built area: 330 sqm
• Floors: four, each with kitchen and bathroom

Austrians plan centre-north mixed complex

LACUL FLOREASCA Austrian real estate developer Raiffeisen Evolution will develop a shopping centre by 2010 in an investment plan of 250 million Euro in the centre north of Bucharest.
Floreasca City will be located in north-east Bucharest, near Floreasca Lake, on Blvd Barbu Vacarescu and Calea Floreasca.
This will consist in its first stage of a shopping centre with entertainment facilities and two office buildings, SkyTower and Office Wing. The shopping and entertainment centre, ‘Promenada’, will cover a gross floor area of approximately 50,000 sqm, accommodating more than 135 shops and 1,100 parking spaces.
Sky Tower and Office Wing will stretch over a total gross floor area of approximately 90,000 sqm and underground parking for about 1,000 cars.
The second phase will include a third building, the purpose of which has not yet been decided.

Italians buy up centre-city shopping estate

NATIONWIDE Italian real estate group Immobiliare Grande Distribuzione (IGD) has bought out shopping centre group Winmarkt Magazine for 182.5 million Euro from companies affiliated to US private equity firm NCH Capital Group.
Communist-era built Winmarkt shopping centres operate mostly in the middle of large towns over an average gross lettable area of 9,000 sqm in cities such as Ploiesti, Buzau, Cluj-Napoca, Bistrita, Braila and Alexandria, Teleorman county. Total annual rent in 2008 of the 15 properties in the Winmarkt Magazine portfolio is expected to reach 19.1 million Euro.
IGD also signed a preliminary purchase agreement for another shopping centre in Sinaia, Prahova county for 16.24 million Euro. In addition, IGD will purchase 100 per cent of the units in the Winmarkt Management company, which provides agency and facility management services, for 258,000 Euro.

Fresh Ideeas for east capital
from China

EAST BUCHAREST Chinese construction material supplier Zheng Shi International will pour over 200 million Euro in the development of several residential complexes, under the Ideea Residence brand in east Bucharest. The first project, Ideea Residence Dobroesti, started construction last autumn in the Dobroesti-Fundeni area and will include ten buildings with 1,000 apartments. This is expected for delivery this December.

PROPERTY BUCHAREST

CITYWIDE Greek real estate developer Panhol Developments will work in the next two to three years on three residential projects in eastern and southeastern Bucharest, two office buildings and two logistic centers in the west and northeast side of the capital, with a total built area exceeding 500,000 sqm. The first project will be launched this September and will include around 900 flats from studios to four-room penthouses, in eastern Bucharest with areas between 50 and 220 sqm. Panhol Developments owns over 160 land plots in Bucharest and around the capital and is targeting large cities in Romania for future developments. The company has budgeted over 140 million Euro for middle term investments.

BUCHAREST-PLOIESTI British based real estate company Willbrook Management International has started development on a business and convention centre, comprising two buildings connected by a pedestrian bridge, on the national road DN1 Bucharest-Ploiesti, near Baneasa forest. Willbrook Platinum Business and Convention Center will provide 63,000 sqm of office spaces and convention facilities for more than 3,650 guests in five conference rooms. The project is expected for delivery by 2009.

LACUL GRIVITA Greek real estate developer Quality Living Developers will deliver the second phase of the ‘Green Lake’ residential project, in northern Bucharest on Grivita Lake, by the end of 2010. The second development phase will comprise 19 villas and 461 apartments, while the first phase, expected for delivery by the end of this year, consists of 39 villas and 118 apartments. Total investment in the project stands at 200 million Euro.

BUCHAREST-TARGOVISTE Romanian real estate developer Wizz Corporation will deliver 50 two, three and four-room apartments with areas between 42 and 115 sqm in Spring 2009. ‘Optimus Residence’ is slated for Soseaua Bucuresti-Targoviste and will include 44 parking spaces. The apartments are on sale for 1,350 Euro per sqm.

COSTINESTI One hundred metres from the beach, Romanian real estate company Moscopolis Business Agency is developing a block of 48 apartments, due for completion by 2009. Developed in the Epava area of Costinesti resort, Constanta county, ‘Casablanca Aparthotel’ will be affiliated to an international chain. The company has already started negotiations with Best Western Hotel and Savoy Hotel in Mamaia, according to Madalina Gheorghiade, manager of Moscopolis Business Agency.

IASI and ILFOV Turkish construction company Synergy Construct will start developing this year its first two real estate projects. The company will erect an office building on a 1,000 sqm land plot in Iasi city centre, for an expected delivery date of September 2010. In Straulesti, Ilfov county, Synergy Construct has acquired a 5,000 sqm land plot where it will develop by May 2010 a residential project.

ILFOV Romanian developer RCC Grup has begun this year works on two residential complexes located in Voluntari, Ilfov county. ‘Athos’ complex counts around 120 apartments partitioned on eight floors and is expected for delivery next January, while ‘Artemis’ complex has around 240 apartments, to be completed by spring 2009.

STEFANESTII DE JOS Spanish real estate developer Martinsa Fadesa will start, by this June, the development of a 7,600-unit residential complex to be completed in three phases by 2015. The first phase of ‘Bonaire Community’, in Stefanestii de Jos, Ilfov county, will consist of 1,650 apartments with one to three rooms and will be delivered by 2010.

SIBIU Romanian RTC Group’s new real estate division Rimobi Holding is developing a residential complex, ‘Theresianum’ in Sibiu on the shores of the Cibin river. The complex includes 97 apartments, stretching over an available space of 11,800 sqm, at prices starting from 1,000 Euro per sqm. Theresianum is due for completion by the end of 2009.