Romania's Dedeman Group, the country's largest DIY retailer, has purchased an office property in the Romanian city of Cluj Napoca in a deal said to be the biggest ever office transaction in Romania's regional markets.
Financial details were not disclosed, but the asset is said to have changed hands for €120 mln.
The Office was sold by local developer Mulberry Development and Johannesburg-listed NEPI Rockastle, marking the largest Romanian commercial deal this year according to JLL, which represented Mulberry in the sale.
'The completion of the sale of The Office in Cluj Napoca marks a new round of records on the real estate investment market outside Bucharest and the Romanian market overall,' said Andrei Vacaru, head of capital markets JLL România.
'It is a major landmark for the local property investment market: the biggest transaction of a real estate asset in a secondary city signed in the past 10 years and the first of this size where both sides are prestigious Romanian entrepreneurs,' Vacaru added.
The asset is the biggest office project in Cluj-Napoca, with a total area of 61,000 m2, 100% leased, and certified BREEAM Excellent.
JLL said that the sale followed two significant but smaller transactions in Cluj Napoca last year, namely the sale of the Maestro office building and the logistics park CTPark, underlining interesting in this market.
'The sale of The Office is an important benchmark as regards the price of prime products in secondary cities. The coordination of the sale process has given us the opportunity to demonstrate there was high interest for this project and to identify the groups truly interested in acquiring office buildings in secondary cities,' Vacaru noted.
For Dedeman group, a relatively new name in commercial property invsetment, the deal marks the second transaction concluded in the past year in Romania. The DIY chain started building an office portfolio in 2017 with the acquisition of the AFI Park scheme in Bucharest for €164 mln, at the time, a record deal in the Bucharest market.
JLL said that it expected further deals to follow in the market, signalling that it had two deals on its books that it expected to close by the end of June.
'The emergence of private Romanian buyers as major players on the institutional real estate transactions market shows promise,' said Vacaru. 'Romania would have much to gain if, besides them, we also had local investment funds or local pension funds investing, as they do in Hungary or the Czech Republic.'
JLL expects total investment volumes in Romania to be higher in 2019 than in 2018, reaching a potential €1.2 bn of deals.
