DDC to develop mixed-use complex in Transylvania

Dawnay Day Carpathian (DDC), UK-based retail property company that invests in Central and Eastern Europe, has acquired a 20,000 m² plot of land in Cluj-Napoca, Romania for a mixed-use development.

The purchase of the development site for just over EUR 14 mln is the first of the pipeline deals identified by DDC's asset manger, Dawnay Day Pan Terra at the time of the second fund raising in May 2007. The plan is to develop a 40,000 m² retail and entertainment complex with 8,000 m². DDC said there is also potential to incorporate a hotel into the site. With a population of 300,000, Cluj-Napoca is one of the largest cities in Romania.

There is planning consent for the site and construction is expected to start in March 2008. The company estimates the construction cost will be EUR 60 mln and the work will be completed in 18 months. 'Based on an income yield of 7%, this puts the estimated project value upon completion at EUR 111 mln,' DDC said. The acquisition is structured as a share purchase transaction from a Dutch holding company in which members of the Dawnay Day Group have a controlling interest. The deal represents DDC's second investment in Romania and the fourteenth transaction overall.