AFI Europe in exclusivity to buy €309m of Romanian offices from Nepi Rockcastle

Dutch-registered real estate developer AFI Europe has signed a non-binding letter of intent with CEE investor-developer Nepi Rockcastle to acquire its Romanian office portfolio.

In a press release, Nepi Rockcastle said it has granted AFI Europe exclusivity with regard to conducting due diligence on four office buildings which were valued at €309.2 mln at end-December 2018 and provide a total 170,000 m2 of space.

AFI Europe, a subsidiary of Israeli-owned AFI Properties, has eight weeks from the date of signing the letter of intent to conduct the due diligence exercise.

Johannesburg-listed Nepi Rockcastle said the sale would be in line with its strategy of focusing on dominant core retail assets. The CEE-focused company has been catching the eye in Central and Eastern Europe in the past 18 months with a number of big-ticket shopping centre deals. A recent major transaction was the acquisition of a controlling stake in the Mammut shopping centre in Budapest in a deal worth €254 mln.

Nepi Rockcastle owns four office buildings in Romania, three of which are located in Bucharest (Floreasca Business Park- 36,300 m2, The Lakeview – 25,600 m2, and Victoriei Office – 7,800 m2) and one in Timisoara (City Business Centre – 47,800 m2).

The company has already sold The Office project in Cluj-Napoca, which it held in a 50-50 joint venture with Romanian investor Ovidiu Sandor, to local do-it-yourself retailer Dedeman Group in a deal reportedly valued at €120 mln.

Nepi Rockcastle stressed that the letter of intent to sell the remaining four offices is non-binding in nature and 'any transaction would be subject to completion of a sale and purchase agreement and the fulfilment of numerous conditions, including receipt of bank financing and regulatory and shareholder approvals'. 

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