EGI Romania To Provide EUR120M Financing For Realty Projects In 2011

05.25.2011 By Florentina Dragu

Erste Group Immorent (EGI) Romania, unit of Austria’s group Erste, is negotiating total financing of EUR120 million for real estate projects this year, well above the EUR22 million financing provided in 2010.

"We're analyzing projects whose financing reaches EUR120 million. These projects include shopping centers, offices and industrial areas in various regions of the country," said Bogdan Cernescu, managing director EGI Romania.

Speaking at an event in Vienna Wednesday, Cernescu said most of this year's contracts aim to refinance existing projects.

Cernescu said foreign investors are bound to turn to Romanian property market once again, as the markets in Poland and the Czech Republic are overcrowded.

EGI is looking to buy land in Bucharest for office building construction, but the prices are still high, he added.

"We're trying to buy land, but the prices are still too high. Certainly, the prices have gone down, but with increasing yields and lower rents, the decrease of land prices is not that large," Cernescu said.

He said EGI came close to seal a deal in 2010, but the transaction was cancelled after the owner reconsidered the price.

"We want to invest in office buildings, especially because of the development potential in the segment. We are talking about two million square meters of office space in Bucharest, but only 300,000-400,000 square meters make sense in the market and, for a city this size, it is very little," Cernescu said.