Generali in talks over acquisition of Bucharest Corporate Center

The real estate division of the Italian insurance group Generali is negotiating the acquisition of Bucharest Corporate Center, a real estate project now under construction in Piata Victoriei in Bucharest”s business district, sources close to the deal say.

The signing of the contract is expected to take place in a matter of days, with the deal put at 22-24 million euros, the quoted sources say.

“We are in talks over the sale of the building. I cannot comment any further,” says Damianos Damianos, the chairman of Bucharest Corporate Center SRL, the project developer.

He estimates the building, which has a built surface area of 18,000 square metres and is to be used as office space (13,000 square metres of it will be rentable space), will have seen 17 million euros in investments by December, when it is scheduled to open.

At a price of 22-24 million euros, Bucharest Corporate Center will provide a yield of 8-9% if rented at the average price.

However, Generali may buy the office building for its own needs, with the developers not interested in signing leases for the office space, according to information on the real estate market.

“I cannot comment on the information about tenants, either,” Damianos added. Generali declined to comment. The Italian group recently operated a significant capital increase on the Romanian market. Part of the funds from this could be used for the acquisition.

Generali”s advisor in the negotiations is the law firm Musat & Asociatii.

Through the investment fund Accession Fund, in which it holds stake, the Italian group was previously involved in talks over the acquisition of another major class A development, Dorobanti 239, the current headquarters of petroleum company Petrom.

The Piata Victoriei area, where the Bucharest Business Center is located, is one of the most developed business areas in the capital, and is the location of choice for office building developers.

The tower built by French company Vinci for BRD, Europe House (Orange headquarters) and America House are the most representative projects in the area. Europe House was sold for approximately 30 million euros to Austrian investment fund Europolis, while America House is currently being eyed by investors.

The same goes for Charles de Gaulle Plaza and Bucharest Business Park, two other major real estate developments located in northern Bucharest.

Having started in 2003, transactions involving office buildings surged this year. Immofinanz bought the Global Business Center office building earlier this year in a deal estimated at 15-20 million euros. This building hosts the customer relationship department of the mobile telephone operator Connex.

Bucharest Corporate Center SRL, says Damianos, is 50%-owned by Cyprus-based Bucharest Corporate Center Ltd, with the rest belonging to the shareholders of Summa Romania, which has handled construction of the building. Bucharest Corporate Center Ltd is in its turn held by Danube Fund (36%) and Greek constructions company Diekat (approximately 26%), among others.