Advanced Development gets EUR 5 million for residential project
09 June 2009
Real estate development company Advanced Development, owned by several foreign and local individuals, has received financing from Intesa San Paolo bank for a EUR 4 to 5 million residential project which it plans to start in the near future in Bucharest. The project, in the Rosetti area of Bucharest, will feature 13 apartments on 2,200 square meters.
"The owner has decided to start with this project due to its location and concept. The residential segment will grow, partly because of the Prima Casa concept that will have a positive effect on the market and the general demand for places to stay. Other residential projects that are being considered are located in Cernica, Branesti and Berceni," Thomas Lundin, partner at Advanced Development, told Business Review.
An office building in the Timpuri Noi area, which should require an investment of between EUR 20 and 30 million, is in the approval stage. "We also have requests for development in a few other central locations in Bucharest but the go ahead has not yet been given," Lundin continues.
In the past, the firm has worked on developing projects for investors, without putting any equity in. But in the future, "the business concept of Advanced Development is to share the risk of the projects that we have responsibility for, if possible being a minority shareholder. As a consequence we will only start projects that we, after a thorough analysis, believe have the potential to give an acceptable return on investment," says Lundin.
Asked whether he has lost any money in the downturn, Lundin says that on paper he privately has lost some money, "because values have gone down, but I am not in a distressed situation so I don't need to sell." He goes on: "We have been reasonably smart investing in land - we didn't invest a large amount and did not take big risks as the locations are good. The value of land has gone down but I am confident that it will increase in the future."
Lundin is also shareholder in the Century 21 master franchise business in Romania, and by the end of the summer he plans to add a valuation company to join the network. As for the Century 21 network, "We are discussing about the prospects of growing our network in the next couple of months, and we plan to add another five franchises by the end of the year," says Lundin.
Source: Business Review
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