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Fabian Romania Announces The Purchase Of A ‚¬4.9 Million Office Building In Bucharest
Hamilton, Bermuda, June 12, 2007 - Fabian Romania (FABROPR.BH) has reached agreement to purchase the Evocenter office building in the Pipera / Voluntari district of Bucharest for a forecast yield of 9 per cent. The Evocenter will be the Fund's fourth office building in Bucharest.
The fund had initially proposed to purchase the building empty, thereby taking the letting risk. However, during the due diligence process, the Adama Group from Israel, the developer, signed a lease taking half of the available space. The building will be completed in summer 2007 to a Class A standard and comprises 3,000m2 of net lettable area, 18 covered car parking spaces and ancillary parking close by. It is arranged over seven levels, basement, ground floor, mezzanine and four office floors.
Rents that will be achieved for the building are forecast to be ‚¬12 sqm/month for ground, mezzanine and floors one to four, ‚¬65 sqm/month for parking and ‚¬7 sqm/month for storage. Once all space is fully let, the yield is forecast to be 9 per cent.
The Fund will meet the consideration of ‚¬4.9 million from its own resources. Debt drawdown is anticipated to be during the third quarter 2007 which will reduce the ongoing equity requirement to around ‚¬1 million.
Commenting on the transaction, Mark Holdsworth, Managing Director of Fabian Capital, the Investment Advisor to the Fund said:
"We are delighted that the Fund has reached agreement to buy this commercial office building. Based on our experience and given the ongoing shortage of office space in Bucharest, we believe it is in the Fund's interest to agree to take the letting risk for the building in return for sealing a more attractive price.
By having the Adama Group, as both anchor tenant and vendor, we consider we have ensured a quality product through the alignment of interests. We are confident of letting the rest of the building out to multinational tenants in the near future."
Following the acquisition of 40-44 Banu Antonache in January 2006, the purchase of the Adama building will be the second occasion the fund has taken the letting risk.