With the purchase of an office property portfolio in Bucharest, DEGI Deutsche Gesellschaft für Immobilienfonds mbH is the first German property fund company to enter the Romanian property market, for a investment volume totalling around €111 million. With a total area of 34,700 m² changing hands, the transaction is the biggest ever on the Romanian office market.
The Millennium Business Centre and the Construdava Business Centre, with a total investment volume of €82.6 million, are earmarked for the portfolio of DEGI INTERNATIONAL, which having closed this transaction is broadly diversified with 25 properties in ten countries. The PGV Tower, for a price of €28.8 million, goes to the semi-institutional fund DEGI GLOBAL BUSINESS, which thus owns eight properties in seven countries. The two funds are purchasing the properties through holding companies. The seller is the European Convergence Property Company, listed on the AIM in London. For this transaction, DEGI received commercial advice from EURISKO and legal consultancy from the law firm Wolf Theiss.
Growth region Bucharest
With its approximately 2 million inhabitants, Romania's capital city contributes about 23% of the country's GDP, which rose by 6% in 2006. Bucharest's economic performance soared by 8.4% over the same period, thus exhibiting the most dynamic growth of any metropolis in Eastern Europe. The city possesses 650,000 m² of modern office space; the vacancy ratio for Class A office premises is currently around 2%. "This portfolio deal signifies a swift entry into Romania's dynamic property market for two of our open ended funds, with net initial returns of substantially more than 6%. There is even potential for further increases in rents and value. Following the two property purchases in Poland, this deal is a further step in our investment activities in Eastern Europe", says DEGI's Managing Director Malcolm R. Morgan. DEGI intends in the future to acquire not only office buildings but also retail properties in Romania.
Millennium Business Centre.
Construdava Business Centre.
Millennium Business Centre
The 18-story office tower, together with a 5-story annex with terrace, is located in a very good inner-city district at the corner of Carol Boulevard and Armand Calinescu Str., featuring 14,840 m² of rented space and underground parking lots for 98 cars. The office areas are flexible; the floors can be divided into at least two rental units. The property is located opposite the Bucharest Stock Exchange, and is currently let in its entirety to 18 creditworthy tenants like the World Bank and Sanofi Aventis Romania. It can be directly reached on public transport by six trolley-bus and two tram lines.
Construdava Business Centre
The likewise ful
The Exchange due to open in September (IE)