18th June
2007
PPFI acquires share of Romanian hotel chain
Investment firm PPF investments (PPFI) has signed an agreement with Romanian company
the Red Group for the development of the Continental Hotels chain in Romania.
As part of the agreement, PPFI will purchase 28.14 percent of Conti Hotels Investment,
a newly established company through which investments within the Continental chain
will be run and which holds 73 percent of Continental Hotels.
The remaining Conti Hotels Investment shares are controlled by Radu Enache, the
owner of Red Group and CEO of Continental Hotels, through a Cyprus-based company
called Crossbrook, which holds a 71.83 percent in Conti Hotels Investment.
The agreement involves a combined investment of € 65 million-70 million (Kc
1.86 billion-2 billion) between 2007 and 2011. The hotel chain plans to open seven
more hotels in Romania under the Ibis brand name, which would add 3,800 more rooms
to the chain’s current 1,600 rooms.
“The partnership with PPFI is focused on the hotel industry for the moment,
but there are many other fields we’d consider, including real estate,”
Enache said.
The value of the transaction wasn’t disclosed, but Romanian market sources
place it at around € 30 million. Enache declined to comment on the information.
“The hotel industry in Romania has a remarkable potential. We believe that
a company with a model management and first class financial support can exploit
this potential to its maximum. We’re convinced that this partnership is
the beginning of a success story,” said Ivo Nejdl, an investment manager
at PPFI.
Continental Hotels had a turnover of € 24.3 million at the end of 2006.
Source: Czech Business Weekly
Real estate growth in Romania to last for at least
a decade
Edgar Rosenmayr, an investment officer with Immoeast, the most dynamic player
on the domestic real estate market, says the Austrian group is focusing on the
Bucharest market, on the office building segment, since the markets outside the
capital city do not provide desired yields at present.
"In the case of office buildings, we are particularly focusing on Bucharest,
since the Romanian market is atypical and we believe in the other cities an office
building cannot generate the yields and revenues we have in mind," stated
Rosenmayr.
The Romanian portfolio of the Austrian investment fund now includes 113 properties,
with a total area of 3.85 million square metres, of which 44 are retail properties,
finalised or under various development stages, with a lettable area of 894,000
square metres.
"We are permanently renewing, strengthening and optimising our portfolio
and in case a certain project no longer meets our standards, we usually sell it.
The same will probably happen in several years with some projects we own domestically
because a building acquired now will not be as interesting in the next 10 years,"
says Rosenmayr.
According to him, around 20% of Immoeast's 7.5bn-euro investment budget will be
channelled toward the Romanian market, with Immoeast's investment officer forecasting
the upward trend of the real estate market will continue for at least a decade,
with a decline of up to 5% to be registered in the following years.
"In Romania, we have the biggest portfolio in our overall investments and
at this moment the Romanian market is also the most attractive for us. We are
certainly cautiously optimistic when it comes to how successful our choice of
properties is domestically, but we believe Romania will continue to be one of
Immoeast's main targets in the following years, as well," stated Rosenmayr.
He estimates the upward trend of the real estate and retail markets will maintain
over the next 10 years though returns will no longer be as high as they are now.
The Austrian group has recently increased its share capital by over 2.8bn euros
to finance the 6bn-euro investment programme targeting projects in Eastern Europe
and particularly in Romania. The fund's capitalisation has thus reached 8.6bn
euros.
The group has also voiced its intention to invest 300m euros, together with European
Future Group, in the following years to build 8-10 logistic parks in Romania.
The total lettable area of logistic centres will be around 500,000 square metres.
"We've already identified 6 potential locations for these logistic parks
and we intend to build centres in line with European standards" specified
Rosenmayr.
Immoeast is currently the most dynamic developer on the domestic real estate market,
with a recent acquisition being that of Euromall shopping centre of Pitesti in
an 87m-euro deal.
Source: ZF.ro
British buyers are waking up to Romania
The country, which joined the EU in January with Bulgaria, came out top in a list
of the 20 best places to make money from property in a Channel 4 programme last
year.
It is billed as a good bet because of the country's improving economy and experts
forecast a massive potential return of more than 400 per cent for investors over
the next 10 years.
One reason for the predicted growth is the huge investment in the country's infrastructure
and efforts to boost tourism.
The number of visitors is increasing already. Bucharest is just over two hours
flight time from the UK and the climate is also a big attraction for Brits. There
are more than 300 sunny days a year and the average daily temperature from April
to September is 23C.
Buyers looking for a dual-purpose holiday home have plenty of choice in Romania
- there are ski resorts in the mountains and beach resorts on the Black Sea.
Carlo Walther, head of business development for RightmoveOverseas, said: "With
a stabilising economy and foreign investment from multinational, global companies
flooding in faster than almost any other country in Europe, Romania has the potential
to be the next economic miracle."
The country's property market has already been transformed beyond recognition
- turnover is rapid and prices have soared.
This trend is likely to continue as interest rates in the country are dropping,
which is opening the domestic market to hundreds of thousands of new borrowers.
Walther added: "Romania has benefited hugely from its entry into the EU in
this year. "
Source: Glasgow Sunday Mail
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