AFI Europe has agreed to sell the AFI Park office scheme in Bucharest in a deal potentially valued at €164 mln - believed to be the largest office transaction ever in the local market.
Under the agreement, AFI Europe is selling buildings 1-3, with an option on the remaining two buildings, to Romanian Do-It-Yourself (DIY) retailer Dedeman. The total price for AFI Park 1-5 is about €164 mln.
The transaction is AFI Europe's first sale of a project in Romania. It also marks Dedeman's entry in the commercial real estate investment market, though CEO Dragos Paval said the company intends to do more.
First sale in Romania
'Once this transaction is completed, it will be AFI Europe's first sale in Romania. An important milestone from our point of view as an international developer having already invested more than €500 mln in Romania,' said David Hay CEO of AFI Europe Romania.
'This is a very consequential transaction for our market and will have a positive influence on the perception of Romania both in the international arena as well as in the eyes of the local investment community,' said Robert Miklo of Colliers International.
Colliers International advised AFI Europe, the German & CEE development arm of Tel Aviv-listed AFI Group.
The AFI Park complex comprises 70,000 m2 of leasable office area occupied by multinational corporations. The tenant line-up includes Microchip Technology, Electronic Arts, Endava Romania, Cameron US, SII Romania, ORTEC Central & Eastern Europe, FotoNation, Telus International, Veeam Software and SecureWorks. All AFI Park buildings have secured LEED Gold certification.
Market leader in DIY
Founded by the brothers Dragos and Adrian Paval in 1992, Dedeman had 45 stores, over 9,200 employees and a turnover of over €1.2 bn at end-2016. The company's main headquarters and one of the logistics centres are located in Bacau, Moldova, in the north-east of Romania.
Dedeman is the market leader in DIY, but also one of the largest companies in Romania by revenue across all sectors. It is privately owned and virtually the only major business operated by the Paval brothers. PropertyEU understands that the thinking behind the deal with AFI is that strategic diversification in an established sector like commercial real estate will strengthen the Dedeman group.
Bianca Stamatoiu of Law firm NNDKP also supported AFI, while Dedeman was advised by Popovici, Nitu, Stoica & Asociatii.
Other projects
AFI Europe has operated in Romania since 2005 where it developed and manages AFI Cotroceni, a 90,000 m2 shopping centre in Bucharest, next to the AFI Park scheme.
The company is currently developing AFI Brasov, a mixed-use project which includes a 45,000 m2 shopping mall and 25,000 m2 of offices; and AFI Tech Park, a 56,000 m2 office park.
In addition, two further projects are to go into development in the near future. These are a retail park on an 80,000 m2 land plot in Arad and the large scale residential project, AFI City, on a 148,000 m2 land plot in Bucurestii Noi district 1 of Bucharest.
