Romanian retailer, Israeli developer cancel Bucharest office sale

Israeli developer AFI Europe and local DIY network Dedeman agreed to cancel the sale of the office buildings AFI Park 1-3 in Bucharest.

Dedeman was looking to buy the buildings 1,2, and 3 in the AFI Park, located near the AFI Palace Cotroceni shopping mall. It had signed a EUR 86.5 million pre-sale agreement for them. It also had a purchase option for buildings 4 and 5 for EUR 77.5 million, according to local Capital.

The transaction would have amounted to EUR 164 million in total, and would have been the largest one on the Romanian office market. The largest local office market transaction so far is the EUR 120.3 million sale of America House, which AEW Europe purchased from developer GTC in 2007.

“Following the announcement a few days [e.n. ago] from Dedeman of its intention not to advance with the purchase of AFI Park 4&5 office buildings, which were actually not under a binding agreement, both parties have agreed to retreat and to also cancel the purchase agreement of AFI Park 1-3 buildings, in order to enable AFI Europe to continue and operate all the buildings in the park as a complete office complex,” the companies said.

The five buildings in the park have a GLA of 70,000 sqm, and are fully leased.

Multinational companies such as Microchip Technology, Electronic Arts, Endava Romania, Cameron US, SII Romania, ORTEC Central & Eastern Europe, FotoNation, Telus International, Veeam Software, and SecureWorks are among the tenants.

AFI Europe recorded a net operating income of EUR 12.2 million in Romania in the first three months of this year, up 12.7% year-on-year. The developer owns two malls and five office buildings in Romania and has several other projects under development.

Dedeman is the leader of the Romanian DIY market. It had a turnover of EUR 1.17 billion and a net profit of EUR 160 million in 2016. This makes the company, which is controlled by local entrepreneurs Dragos and Adrian Paval, the biggest entrepreneurial business in Romania.

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