Europa Group bets on residential segment

The operational manager of Europa Group, Serghei Cicala, believes the residential segment of the real estate market is offering the best investment opportunities, since competition on the office segment is extremely tight and office rents are going down.

“The residential segment is witnessing the highest level of demand ever. Europa Group has a solid background on the residential and hotel segments, which are the main development directions of the Romanian market,” said the Europa Group manager.

Europa Group Investment is the Romanian unit of Lithuanian company Investment Baltic Estates, which has earmarked investments worth 160 million euros for the Romanian market.

The Lithuanian company has so far invested some 15 million euros on the Romanian market, according to Cicala, including projects and authorisations. Cicala believes that the yield of investments targeting residential buildings is slightly superior to the 8.5% level related to investments in office buildings.

“Funds were earmarked for the acquisition of three locations in Bucharest, where we are going to develop residential projects, and of the location in Piata Unirii, where a four-star hotel will be developed,” Cicala stated.

The Lithuanian company bought two former production units in Bucharest, located close to Carol Park and in Popa Tatu area, as well as a plot of land situated on Splaiul Independentei.

The hotel that will be erected in Piata Unirii will have around 70 rooms and will operate under the Europa Royal brand.

“Our plans for the hotel industry rule out affiliation to internationally renowned operators. We are even considering becoming a franchiser for our brands, with Europa City for 3-star hotels and Europa Royal for the four-star hotels,” Cicala said.

The company was licensed to build more than 100 apartments in the Carol Park area, close to Piata Unirii. The six buildings will have a built area of almost 18,500sqm metres and the investment is estimated at 18 million euros.

“In two weeks, we will sign the contract with the general entrepreneur of City Center Residence project. Prices within the buildings will range between 1,200 and 2,200 euros/square metre, depending on location and facilities,” said Cicala. Regatta is the broker of this project.

The apartments will have 1 to 5 rooms of 52-220 square metres, and prices range between 125,000 and 500,00 euros.

“The projects will be financed through our own resources and through the banking loans we are currently negotiating”. The residential project located in Popa Tatu will entail similar investments.