The new owners of the network of shopping centers Winmarkt Italians from IGD, considers that the market for commercial centers in Romania will reach the level of Italy in the next five years, which is why they invest significantly in the recently acquired properties, to face the competition.
"We budgeted investment between 20 and 25 million in improving and renovating some of Winmarkt locations, as well as various other services such as advertising," said ZF Filippo Carbonari, CEO of IGD.
"In five years we plan to have a strong portfolio, with efficient buildings, in order to resist the increasing attacks of the competition witch is growing increasingly," Carbonari added.
The Italians took over from the Americans from NCH a network of 15 shopping centers in different cities all over the country, moving over 180 million euros being one of the few real estate transactions completed earlier this year and by far the greatest value.
The local commercial centers market is experiencing an important development, the number of Mall centers doubled each year, provided that investors have announced projects that could lead the stock trading at about 100 units in the coming years.
"In May of last year we decided to expand our business and outside of Italy, where we had reached a certain degree of maturity, in order to grow and diversify our portfolio. We looked to countries similar to Italy, both population-wise and macroeconomic profile-wise and as well as development cycle of market centers-wise, "says IGD.
Negotiations began last summer, in the months of August-September, and the closing was done at the end of April.
"We had already analyzed the Romanian market, but an important role was played by BNO Paribas, with who we worked in the past", says Carbonari.
IGD is currently building a portfolio of one billion euros and the company's target is that by 2012 to reach a portfolio of 2,3-2,4 billion.
"The next challenge will be to develop our portfolio through new investments. We seek forward to other acquisitions in Romania, but with properties of the same nature as Winmarkt centers. In Bucharest, for example, the market is crazy, shopping centers are the same price as in Rome or London. We're not that kind of investors, "said Carbonari.
IGD will largely maintain Winmarkt leadership team, following that Filippo Carbonari will become Chairman of the Board, while another director of the IGD to be relocated to Romania. Sergiu Stapler, former chairman of the board, will occupy an executive position.
"We liked the team structure in Romania, young, similar to the one we have in Italy. Winmarkt's entire portfolio perfectly matched our business profile," said Carbonari.
IGD's director said that he is already in treaty with a number of brands in Italy that could enter the local market, including Winmarkt centers.
IGD will largely maintain Winmarkt leadership team, following that Filippo Carbonari to become Chairman of the Board, while another director of the IGD to be relocated to Romania.
"The mix of tenants in this moment is good, but can be improved. Discussions are taking place with the Italian manufacturers of clothing and jewelry, willing to invest in Romania," said Carbonari.
The development of the Market for commercial centers in Romania comes amid the expansion of international retailers who have entered the local market.
IGD's activity is primarily managing centers, so the Italians will leave their imprint on the structure and shops in the Winmarkt.
"We have a different approach than those of the NCH, which were merely an investment fund and seeked to maximize their income from exploitation. We intend to convince people to stay as long as possible in our trade centers and will enlarge the food-court areas, although restaurants are charged lower rents, "said Carbonari.
Winmarkt shopping center Network was developed especially on old supermarkets structures in cities like Pitesti (Trivale Shopping Center), Ramnicu Valcea (Cozia Shopping Center) and Sinaia (Carpathian Shopping Center), but also in new buildings, the total area rising up to 147,000 square meters.
The average price per square meter paid by the Italians in this transaction was 1.240 Euro, the yield (in euros) being about 10.5% per year, considering the income of 19.13 million euros estimated for this year from the exploitation of the commercial spaces.
The level of income from rents could rise in the coming years, from investments to be made, so IGD could recover the investment in a period of time even shorter than ten years.
"The negotiations were difficult, considering that the American partners are professionals and also tough," said Carbonari.
Building the Winmarkt network started about ten years ago and consisted of restructuring 15 companies business-wise, aligning structures and sizes, building a unique brand, and investments in modernization.
The network is the largest of its kind on the local market. On the other hand, developers such as GTC or investment fund Immoeast announced plans for the development of networks of small shopping centers, under the brands of the Galleria and STOP.SHOP, brands that could compete in the coming years in the number of units.
Perhaps the most important advantage of the Winmarkt network is the positioning of the stores in city centers, in terms of shopping center developers have difficulty finding large pieces of land in central areas, at prices that make the shopping center development projects feasible.
Winmarkt's sale was made in a broad campaign of exits made by the Americans from NCH who have gave up, at the beginning of 2007 ,their assets and liabilities with a cumulative value of around 500 million euros.
Property was the most profitable for the funds managed by NCH, considering that sales of the Electroaparataj factories, Tricodava and Electrical Engineering, a stake in the project Cotroceni Park, next to the 15 shopping centers Winmarkt, generating revenues of 400 million euros.
IGD is a company owned 54% of two co-operatives who, according to Carbonari, are the main player on the retail market in Italy, with a market share of 30%, and the remaining shares are held by investment funds through the exchange of values in Italy. At the end of last year, in the companies portfolio there were ten commercial centers, 14 hypermarkets and three projects under development.
Source: Ziarul Financiar, May 9, 2008
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