Bucharest's Sema Parc awaits credit thaw

The global financial crisis has brought the real estate market in Romania to a shuddering halt, but the massive multi-functional Sema Parc project in Bucharest is not under huge financial pressure internally, according to the developer River Invest.

'Sema Parc consists of office, retail and residential components and the scheme is being delivered on a project-by-project basis. Each project is owned by a special purpose vehicle (SPV) with its own financing,' Sorin Nistor, director of strategy and business development at River Invest, told PropertyEU.

The development is situated in the sixth district, just 10 km from the centre of Bucharest. The scheme covers 40 hectares, which Nistor noted, is comparable in size to Canary Wharf in London.

The first component of 50,000 m² of A-class office space at Sema Parc was recently delivered, having been forward sold to the Europolis fund in 2006 for about EUR 90 mln, the largest real estate transaction in Romania that year. The tenants include major international companies such as BAT, UPC and SBSD Broadcasting,

The next phase, involving 60,000 m² of office space, is due to start development, but Nistor acknowledged that the project has not escaped the effects of the financial crisis. 'We've had to reschedule the initiation of new projects within Sema Parc due to the lack of debt financing and liquidity but we have not stopped the preparatory works.'

Recently, River Invest made several changes to the architecture plan to make Sema Parc more competitive in the face of other developments in the city. One of the major changes involved dropping the idea of a classic shopping centre in favour of a shopping village with several buildings with galleries and outdoor pedestrian areas.

Nistor added that River Invest is in discussion with its banks on some of the projects. The company has held discussions with potential buyers but Nistor said the lack of debt and uncertainty about property values have severely limited investment activity in Romania, as it has in the rest of Europe.

The entire Sema Parc scheme will take 10 years to complete, and Nistor believes its mixed-use format will prove a success.