Besides the success achieved with AFI Cotroceni, dubbed as the biggest property of the AFI Europe Romania portfolio and the most performing one, the Israeli real estate developer has other big plans for the upcoming two years.
The group intends to start the construction of the second phase (phase B) of AFI Tech Park in Bucharest next year.
Phase 1 & 2 feature 22,000 sqm GLA 8-ﬂoor building each, with 2 underground levels each and retail shops hosting a Supermarket, Fitness Club, Restaurant and Coffee Shop. Phase 3 comprises a 14-ﬂoor ofﬁce building.
As Doron Klein, the CEO AFI Europe Romania announced on Wednesday, the AFI Tech Park 1 project is very stable, generating a net operating income of EUR 10 million.
AFI Tech Park will have tenants from many sectors, mainly IT companies, gaming, automotive, engineering industries.
“AFI Tech Park has reached a 60% occupancy rate and it will reach at least 75% occupancy by the end of the year, results are positive. We are getting a more proper attention and trust from tenants as it is a very efficient project for that area.
Many tenants are ready to commit right now, we’ll see a full occupancy next year, which gives us the comfort to start with the second stage planned for next year, another building of the same volume. The project will eventually have three phases, the plan is to create a close campus, an atrium kind of environment, with beautiful landscapes between the buildings.
We know it’s a big challenge, particularly with the location, in terms of reputation, because in terms of infrastructure, the connectivity of the public transportation is met. It is our mission to convince anyone that choice of the location is a good one.
We have gained the confidence of even bigger tenants, restaurants, cafeterias, coffee shops, gyms, almost everything that a modern office building can offer. So, the plan for 2019 is to start the construction of the 2nd phase of AFI Tech Park,” Klein stated.
The AFI Tech Park is located at the intersection between downtown Bucharest and 3 major residential neighborhoods – districts 4, 5 and 6, totaling over 60% of the city’s population. It enjoys a close proximity to Marriott Hotel, Unirii Square, the Old City and the Romanian Parliament.
Another major AFI Europe Romania project is AFI Brasov, which is ongoing, with its opening due in the spring of 2020.
“Regarding AFI Brasov, we have managed to have proper manpower on the site, so we can already start, with the opening scheduled in the spring of 2020,” the CEO informed.
The project is located near the city center of Brasov, right on the main street leading to Bucharest.
“The visibility of this future shopping center is excellent, we have positive reactions of the future tenants. We have 85% of signed leased contracts more than one year before the opening. We have invested a lot in the design of the mall, in the food and beverage area, the concept will be so unique, it will be a kind of the market within the center of the city, with green spaces, a beautiful terrace that will be overseeing the mountains, that could host summer events in the future, or Christmas markets. The main challenge for us to make sure that the opening will be secured for the spring of 2020. Right now we are sure that the general constructor will be able to meet the deadline”, Klein pointed out.
The upcoming mall in Brasov has a total leasable area of 45,000sqm.
The other major investment of the Israeli group in Romania is located in the western country, in Arad, where AFI Europe Romania had acquired a plot of 80-ha land about ten years ago.
It is about Arad Retail Park, whose construction will begin next year. Located in the city center of Arad, the retail park will include a hypermarket of approx. 10,000 sqm, a Do-It-Yourself store and additional retail boxes of approx. 1,000 – 2,000 sqm each including fashion, sports and electronics anchors. The project will provide a leasable area of 32,000 sqm GLA (34,000 sqm GBA) and 1,000 parking places.
“We start this project ten years after we bought the plot of land. The big challenge was to find the right usage of the property. We think the concept of a retail park is the right one for Arad, as the location is excellent,” Klein explained.
The CEO AFI Europe Romania also revealed that there has been a big ownership restructuring ongoing this year, which is based on the strategy of developing income generating properties, both residential or commercial, and keeping them for a longer period of time. “The new strategy of the new owner is to hold income generating properties for long term. We are in line within the previous strategy before, the only thing changing is the ownership perspective of property. In the past we developed and tried to find the right moment to exit in order to continue develop other properties, now we are developing and keeping,” Klein said, adding that this new strategy is also applying in Romania and announcing that, in line with this new philosophy, the group has recently purchased a land of 50 hectares in the vicinity of AFI Cotroceni.
“AFI Cotroceni is the biggest asset in the group’s portfolio in terms of NOI, the office park 1-5 that will be extended in the future to some other office buildings on the land newly bought,” he said.
The expansion will also include some residential, office and commercial spaces, but also a plan to improve the traffic solutions, which is an issue on Vasile Milea, Timisoara boulevards and to create a kind of ring around the mall, using another two streets that will be added, one is already there but it is used more like a service road, and the second one is Sibiu street.
“We will correct the road infrastructure to ease the pressure from the Vasile Milea and Timisoara boulevards. There will be a mix of office and residential, partially retail, we have the option to have three usages there. The main target is to have a living district that we’ll be alive 24 hours a day, 365 days a year, not only retail, but also a strong office park and also a living area, coffee shops,” Klein disclosed.
As for AFI City, encompassing a two-residential buildings, the AFI group leader said they plan to build a neighbourhood commercial center along the Bucurestii Noi Blvd, next to the metro station and the scheme also includes working on the landscaping to create a proper pedestrian connection with the tube station to the first phase of the buildings of AFI City.
“So, all these upcoming projects are going without losing focus on new projects that we are examining, but the goal is to buy plots of land that are more mature and ready to be developed in a relatively short period of time. Cluj Napoca is also a location that deserves our attention, who knows, maybe in the future we’ll manage to acquire something here.
We are very selective in choosing the right land, project, where we could start building in a relatively short period of time, within a time frame of 1 to 3 years,” Doron Klein concluded.