Two more malls under the hammer at the turn of 2010

The sale of another two shopping malls will be finalized by the end of the year or in early 2011 at the latest, Assen Lisev, CEO of real estate consultancy MBL/CBRE, which manages City Center Sofia, told Dnevnik.
The two malls sold this year, or rather projects under construction, were Mall Rousse and Mall Stara Zagora, which cinema chain Cinema City offloaded to peer Israel Theaters for about EUR 85 million.
Lisev added that City Center Sofia, which since 2006 has changed hands three three times, was not among them, but declined to give more details.
Last week it became clear that Austrian Raiffeisen Zentralbank wants to buy Mall Varna, owned by Miller Developments. Then Mall Varna’s marketing manager Desislava Kovacheva said all the malls in the country were for sale, while a major real estate consultancy confirmed it but added that good offers were scarce. The price of retail space has dropped as rents have fallen, thus any sale will be at a loss for the owner, market observers explained.

News source: Dnevnik a.m. link: article

Romania remains country of malls: More money goes into retail than into production

Real estate investors have completed or are set to complete malls worth over 400 million euros by the end of the year, the lowest volume of investments recorded on this market in the last four years, but significantly more compared with the money that goes into building plants, reveals a ZF analysis. Each of the last three years saw investments ranging between 650 and 980 million euros in shopping centres, but after nearly three billion euros in cumulated investments, the market is starting to gradually decline.

Sun Plaza and Cocor in Bucharest, Atrium Center in Arad, the first retail park in Severin and the first mall in Baia Mare, Gold Plaza, whose inauguration is scheduled for November 4th, are the year's new projects on the shopping centre market.

As far as production is concerned, the Procter & Gamble plant in Urlaţi cost 100 million dollars, less than the Baia Mare mall, while Renault has so far invested in its test centre less than Austria's Sparkassen investment in the Sun Plaza mall in Bucharest.

Although significantly lower, down 40% on 2009, investments have pursued the same direction - consumption - while in production only wind power investments in Fântânele can rival the amounts allocated for malls.

"I think we will see less and less money going to consumption - there will not be new investments in malls because many are performing poorly at present, while the number of investments in production will rise because Romania is still a low-cost country, and such markets are sought after," explains Andrei Diaconescu, managing partner of investment banking adviser Capital Partners.

News source: ZF English link: article