Source: Ziarul Financiar.
By the end of the 1990s, companies operated in rented apartments and houses. In the early 2000s, GTC was the first developer to bet on Romania - taking over an unfinished building structure near Victory Square, transforming it into an office project, and selling it to Europolis in 2003 for $30 million in the largest sale up to that point.
2003 was the year of major real estate transactions in the local market, with two large office projects sold for seemingly incredible sums for that year - $30 million for Europe House and $29 million for the first phase of the Opera Center project.
By the end of 2003, the total stock of Class A office space in Bucharest was 168,000 square meters, compared to about 2.6 million square meters today. While there were only a few buildings in the center then, areas like Pipera, Barbu Văcărescu-Floreasca are now full of large office buildings, with discussions about opening new areas every year.
In 2003, rent in Europe House ranged from $18 to $25 per square meter per month, while today only the best buildings exceed the $18.5 per square meter threshold. For just over €20 per square meter per month, a company can rent offices in one of the most modern buildings in Romania, in the immediate vicinity of the Government.
At that time, Europe House was sold with an investment yield of about 12%. Later, the yield continued to decline to below 6% in 2008 when America House was sold for €120 million. Subsequently, it increased, dropping again to around 7.5% in 2015 and 7.25% this year, according to JLL data.
The first modern Class A office projects in Romania were the World Trade Center and Bucharest Financial Plaza (Bancorex) delivered in 1994-1997, while Opera Center and Europe House were completed in 2001-2002. Between these periods, only smaller buildings were delivered, with the only exception being the Charles de Gaulle Building, with its 23,000 square meters.
If in 2003 a $30 million transaction was a record, this year, for example, deals worth €200 million were concluded - the sale of The Bridge offices by Forte Partners to Dedeman, and a second one worth around €165 million - the Oregon Park project sold by Portland Trust to Lion's Head. Additionally, by the end of the year, three transactions in Bucharest are expected to be announced, such as the sale of America House to Morgan Stanley and Landmark to Revetas. Furthermore, discussions are already underway for transactions involving office projects in regional centers of Romania such as Cluj, Timișoara, or Iași, cities that were nonexistent on investors' radar in the early 2000s.
The Europe House building in Victory Square in Bucharest, which housed and still houses Orange offices, was sold by the Israelis from GTC to the Austrian investment fund Europolis. Subsequently, in 2010, CA Immo acquired Europolis, making the Austrians the second-largest office owner.
Europe House, with a rental area of 13,000 square meters, was completed in 2002 on an unfinished structure in Victory Square and was one of the few large and top-notch office buildings in Romania in 2003. It was the second-largest transaction on the real estate market that year, after Opera Center, another large Class A office building in Bucharest, was sold to an Austrian company - CA Immo.
Investors like Europolis or CA Immo were looking for large office buildings, over 10,000 square meters, of Class A, already rented, according to statements at the time by Mihnea Şerbănescu, CEO of DTZ Echinox agency, representing Europolis' interests in Romania. Presently, DTZ Echinox has transformed into Cushman & Wakefield Echinox, and Mihnea Şerbănescu continues to lead. Only two buildings in Bucharest would meet these conditions - Bucharest Financial Plaza - Bancorex building and World Trade Center, but both were also involved with the state (through BCR and AVAB), making the situation more complicated.
