Romanian real estate developer Avrig35 goes to court against retailer Cora over unfinished Slobozia store

Real estate developer Avrig35 recently went to court against retailer Cora Romania, asking for EUR 11.5 million in damages. The core of the conflict is a planner shopping center in Sobozia, where Cora was supposed to be a tenant. In the fall of 2011, Cora signed a contract with Avrig 35, and the developer was supposed to deliver Cora's hypermarket within 12 months. Because of the bad weather in the beginning of 2012, the developer had to temporarily start work, but after it was re-started, and when the project was 60 percent completed, Cora asked for the work to stop again for some technical checking. Despite the good results of the assessment, Cora later sent a notification to terminate the collaboration, saying technical fault had been found, said Matthew Proskine, CEO of Avrig 35, quoted by Wall-street.ro. By then, the developer had invested EUR 7 million in the Slobozia construction. Cora's Slobozia unit was supposed to be opened this year, according to previous information. Avrig 35 was hugely successful during Romania's property boom and was valued at around USD 1 billion in 2007. The firm is famous for constructing landmark Romanian buildings, such as Charles de Gaulle Plaza in Bucharest, which was sold to GLL Real Estate in 2006. But then came the crisis and with it the end of Avrig 35's good fortune, with one of the group's firms asking for insolvency. According to founder Alexander Hergan, the company will survive. “We plan to pay down USD 50 million of our debts in the next two months. We have saved this company in the past year,” he told Reuters. A new Cora hypermarket and shopping center complex is to open this summer in Constanta, according to leasing agent CBRE. Total investment in the shopping center will reach EUR 58 million and as well as the supermarket, the site will host some 50 shops. The available space is already 80 percent leased, according to CBRE. Cora has similar projects lined up for Brasov and Bacau, with similar investment values. In November 2012, Cora opened its fourth hypermarket in Bucharest, on Soseaua Alexandriei, in the south west region of the city. The retailer invested some EUR 47 million in this new store, which covers 53,000 sqm. Cora was planning to open two more hypermarkets in 2013, in Constanta and Slobozia, and two more in 2014, in Brasov and Ploiesti, according to previous information. Over the long term, it hopes to open up to 20 stores within five to eight years. editor@romania-insider.com