Hungary's Ablon developer freezes all projects in Bucharest

Hungary’s Ablon developer, controlled by Austria’s Volksbank and Israeli businessman Uri Heller, announced it decided to further develop only three projects of its portfolio, two in Budapest and one in Prague, with the rest of developments, of which six in Romania, to be frozen.

Ablon, listed on the LSE, owns in Bucharest and in its neighbourhood (Otopeni, Mogosoaia, Voluntari) some plots of land with a 34-ha area, on which it announced it would invest around 800m euros to develop over 4,000 housing units, office and commercial spaces. The company will further develop an office project and a mixed one in Budapest, as well as a 162-unit housing complex in Prague. “The company’s board of directors decided to put all the other development projects on hold until market conditions improve,” stated the company’s officials. The representatives of Ablon’s office in Bucharest chose not to make any statements about its employees’ activities domestically. The project in the most advanced stage of development was Sunset Residences housing complex of Drumul Taberei, where the firm had started construction works last year, planning to develop ten blocks with around 2,000 housing units, in the wake of investments worth 160-170m euros. Works were halted as early as last year. The company’s biggest project was due to be developed on a 13.3-ha plot of land in Otopeni, where Ablon wanted to invest 280m euros in a business park. Ablon’s portfolio also includes two plots of land with a 7.3-ha area in Pipera, to be used for some housing projects, a plot in Mogosoaia for a villa project and a smaller plot in Bucharest, in Tepes Voda Street, for the construction of an office building. “In the current economic environment, the board of directors considers it is in shareholders’ best interest to postpone our development projects. Until banks resume lending, we’ll only do renovation works and design projects,” stated Dennis Twining, Ablon chairman. The value of the portfolio under Ablon’s management dropped by 9.4% in six months, to 593m euros, according to the assessment by King Sturge and GVA, while the company’s capitalisation on the LSE shrank by 87% from the year’s peak, to 31m pounds. The company operates on the markets of Hungary, the Czech Republic, Poland and Romania.