Degi, the real estate investment arm of German insurer Allianz, has entered into a conditional agreement to acquire three office properties in Bucharest from AIM-listed European Convergence Property Company (ECPC) for about EUR 110 mln. The final price, after transaction costs, will be decided after a post-closing audit.

Degi, the real estate investment arm of German insurer Allianz, has entered into a conditional agreement to acquire three office properties in Bucharest from AIM-listed European Convergence Property Company (ECPC) for about EUR 110 mln. The final price, after transaction costs, will be decided after a post-closing audit.

The vendor said in a statement that the disposal of the properties allows it to take advantage of the substantial yield compression seen in the market over the past twelve months. The three investment properties are the Millennium Business Centre (purchase price EUR 52.6 mln); PGV Tower (EUR 27.4 mln); and Construdava (EUR 26.5 mln). ECPC said they are prime office locations in the Romanian capital and the yields at point of sale are approximately 6.4%, 6.55%, and 7.2% respectively.

ECPC acquired the office buildings for a combined cost of just over EUR 89 mln in 2006, and the properties were re-valued earlier this year at EUR 97.5 mln. The disposals are expected to complete by the end of November 2007. This will leave ECPC with one investment property, Mall Veliko Turnovo in Bulgaria. 'Due to the substantial yield compression seen in the market, the company does not intend to pursue any further acquisitions,' ECPC said.