Sonae Sierra eyes expansion in Romania

Sonae Sierra is eyeing expansion in Romania where it currently operates one shopping centre in Ramnicu Valcea, CEO Fernando Guedes de Oliveira told PropertyEU in an interview.

'We have an existing development pipeline in Romania and we are looking for more projects but it is difficult to find project finance,' he said.

The Portuguese retail developer has recently formed an alliance with Eastern European developer Caelum Development to fund its 67,000 m² ParkLake Plaza in Bucharest. The new shopping and leisure centre will represent an investment of EUR 185 mln. Contracts have already been signed for 52% of the total GLA, with a further 13% in advanced negotiations.

Sonae Sierra’s existing project in Craiova - known as Adora Mall - has yet to receive financial backing and will not move forward unless it receives the necessary bank funds, he added. 'There are some signs of an opening-up of the finance market, but this is mostly for operational shopping centres and not for new projects.' In Craiova, the group has plans in place for a 59,000-m² mall representing an investment of EUR 111 mln.

Romania is regarded as CEE’s most promising investment destination for the coming years due to the relatively large population and its EU membership. However, the country suffers from a lack of debt, noted Hadley Dean, managing partner for Eastern Europe at Colliers International.

‘In the medium term Romania has the best story after Poland. However,' Dean stressed, 'what we see in Romania is that most real estate lenders were Austrian and Greek, and both are retreating to their own markets, therefore developers are forming a lot of joint ventures to be able to go forward without bank finance.'

The full article is published in the November issue of PropertyEU. Please click on the link below to subscribe.