CEE MARKETBEAT HOSPITALITY 2023 H2
Bucharest, September 2019: AEW, one of the largest global real estate investment funds, part of the French financial group Natixis, has completed the sale of America House office building located in Piaţa Victoriei, Bucharest and Promenada Mall, the largest shopping center in Targu Mures. AEW entered Romania in 2007, by purchasing America House from Globe Trade Center (GTC), followed by Promenada Mall Targu Mures from BelRom a few months later.
The transactions mark the official entry of both incoming investors on the Romanian real estate market. A fund advised by Morgan Stanley Real Estate Investing, a global private real estate investment management arm of Morgan Stanley with approximately £40 billion of gross real estate assets under management, in a joint venture with David Hay, former CEO of AFI Europe Romania, has purchased America House, while Indotek, a group of investment management companies owned by American and Hungarian shareholders, has acquired Promenada Mall Targu Mures.
The seller was advised by a team consisting of Clifford Chance Badea, the local office of the global law firm Clifford Chance, providing legal support, Cushman & Wakefield Echinox, who managed the sale process of America House and JLL, who co-ordinated the sale of Promenada Mall. The two deals were carried out concurrently.
America House is a landmark building on the Bucharest office market, the largest one in the Piaţa Victoriei area, with a rentable area of approximately 28,000 square meters. The tenant portfolio includes companies such as Schlumberger, Ţuca Zbârcea & Asociaţii, McDonald’s, the Embassy of Japan and Mastercard, also benefiting from one of the largest retail areas in an office project. The retail spaces cover approximately 4,000 square meters and house World Class, Starbucks, McDonald’s, Cooperativa FruFru and Cărturesti units, thus providing the tenants with a wealth of amenities.
Promenada Mall Targu Mures is the largest shopping center in Mures County, in the center of Romania, with a rentable area of approximately 50,000 square meters. With more than 80 brands, 8 cinema screens, restaurants, coffee shops and other entertainment facilities, Promenada’s offer is well balanced and diversified. It is anchored by Auchan, Leroy Merlin, Decathlon, Hervis, H&M, LC Waikiki, New Yorker, Deichmann, Takko, CCC, Pepco, Cinema City, Media Galaxy.
The Cushman & Wakefield Echinox team that managed the sale process was led by Jeff Alson, International Partner, CEE Capital Markets, Tim Wilkinson, Partner Capital Markets and Bogdan Gubandru, Business Development Manager. The JLL team was led by Andrei Vacaru, head of Capital Markets. The legal assistance was provided by a multidisciplinary team from Clifford Chance Badea formed by Nadia Badea (partner and M&A practice coordinator), Andreea Șișman (Banking & Finance practice counsel) Mihai Măcelaru (M&A practice counsel), Radu Costin (M&A practice senior lawyer), Mădălina Mailat and Bogdan Micu (lawyers). The lawyers provided assistance throughout the entire process, from the due diligence stage, to structuring the transaction, negotiating and drafting the related documentation.
Tim Wilkinson, Partner, Capital Markets, Cushman & Wakefield Echinox: “The sale of America House, a landmark property, to a high-profile global investor enhances the visibility of the local market and further illustrates how major institutional players recognize the benefits of investing in Romania. This continues the increasing trend of new capital seeking opportunities at more attractive yields than in other major CEE markets. We are proud to have been a part of this transaction and to assist AEW in the successful disposal of this asset.”
Bogdan Gubandru, Business Development Manager, Cushman & Wakefield Echinox: “The success of this transaction was the result of the global reach that Cushman & Wakefield has to source capital for prime properties in a dynamic and emerging market such as Romania. Both the office investment & leasing markets have undergone a robust development in recent years, primarily based on the demand from multinational companies that have found an optimal business environment in Bucharest. On these foundations, we are confident that we will witness other important transactions, as Bucharest continues to attract the attention of new capital.”
Mihai Măcelaru, M&A practice counsel, Clifford Chance Badea: “We are very satisfied to have assisted one of our traditional global clients when closing these two transactions that will surely remain a reference in the local real estate market. Having a diverse and long-term collaboration with AEW, we benefited from the transparent and professional support of the internal teams, successfully managing to cover all the complex issues that emerged during the transaction.”
Andreea Șișman, Banking & Finance practice counsel, Clifford Chance Badea: “We continue to engage in transactions with a significant impact on the market, in this case by simultaneously assisting in two transactions that brought to the table two financial giants and also some of the most active real estate investors in the region. The financial aspects involved an in-depth understanding of the financing mechanisms used in transactions of such complexity, as well as in regards to the potential and the reality of the local market, in order to identify the optimal financial solution for all parties involved.”
Andrei Văcaru, Head of Capital Markets JLL Romania: „The sale of Promenda Mall to a new investor on the Romanian market further demonstrates liquidity in Romanian secondary cities following our transactions earlier in the year. This is particularly important at a time when globally the appetite for retail investment in secondary markets has diminished. The strong performing properties offer a very attractive risk return profile to the investors willing to consider the country.”
Cushman & Wakefield Echinox is a leading real estate consulting company in the local market, operating in all real estate market segments. The company’s Capital Markets department is involved in the processes of selling prime real estate assets in Romania with a market value of over 250 million euros.
Cushman & Wakefield Echinox is the exclusive affiliate of Cushman & Wakefield in Romania, owned and operated independently. The team of over 60 professionals and collaborators offers a full range of services to investors, developers, owners and tenants in all segments of the real estate market. Cushman & Wakefield, one of the global leaders in commercial real estate services, with 51,000 employees in over 70 countries and $ 8.2 billion in revenue, provides asset and investment management consulting services, capital markets, leasing, administration properties, tenant representation, design and evaluation services. For more information, visit www.cushmanwakefield.com
Clifford Chance is present in Romania since 2006 and currently operates under the name Clifford Chance Badea. The Bucharest office is fully integrated into the global network and is constantly involved in complex transactions of syndicated loans, financing, restructuring, Eurobond issues and shares on international capital markets, derivative financial instruments, acquisitions of companies by strategic investors or private equity funds, infrastructure and highway projects, real estate investments, as well as domestic and international litigation and arbitration. For more information, visit www.cliffordchance.com
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com