Allianz real estate enters Romania

The acquisition represents DEGI's entry onto the Romanian market. The Romanian consultancy company, Eurisko, assisted DEGI to finalize the transaction. ECPC bought the three buildings Millenium Business Center, PGV Tower and Construdava last year for €89.1 million, and decided to sell due to a drop in the Romanian real estate market's yield, reads a communiqué presented to the London Stock Exchange. The final price depends on an audit scheduled for November, after the close of the transaction. ECDC's income of approximately €110.5 million does not include the €5.5 million asset adjustments and transaction costs. The company net earnings will amount to some €49.9 million, including a profit of €15.9 million.

Millenium Business Center, initially bought by ECPC from a group of companies owned by Greek investors, was sold for €52.6 million. The PGV Tower, developed by Jaguar Development, and owned by Greek and Israeli investors, was sold to the German group for €27.4 million. Construdava, built by Romanian developer Impact, was bought by DEGI for €26.5 million. All office space in the three buildings has already been rented.

The yield of the three transactions - 6.4 percent, 6.5 percent and 7.2 percent, respectively, corroborates estimates by analysts that the Romanian real estate market is closing in on the regional average (Poland, Hungary and the Czech Republic).

ECPC representatives have confirmed that the group has no intention of reinvesting profits due to a drop in yields. Charlemagne Capital also owns the European Convergence Development Company that entered the Romanian market last year.