Nepi Rockcastle finalises sale of Romanian office portfolio to focus on retail

CEE developer-investor Nepi Rockcastle said this week that it has entered into an agreement with AFI Europe to dispose of its Romanian office portfolio in a deal worth over €300 mln.

Dutch-registered real estate developer AFI Europe, a subsidiary of Israeli-owned AFI Properties, was granted exclusivity on the 170,000 m2 portfolio in July.

The transaction is expected to generate, after due diligence and working capital adjustments, a cash consideration of €290 mln, payable at completion slated for 15 May 2020.

Johannesburg-listed Nepi Rockcastle said the sale allows it to focus on dominant core retail. 'The disposal of the Romanian office portfolio is in line with NEPI Rockcastle’s investment strategy focused on core dominant retail properties,' said EPI Rockcastle’s CEO Alex Morar. 'We are pleased to have reached this milestone and we look forward to growing our business and continuing to offer investors good exposure to the fast-growing CEE region. The proceeds from the disposal will be used to fund the group’s pipeline of acquisitions and developments.'

Nepi Rockcastle owns four office buildings in Romania, three 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 aggregated net operating income attributable to the Romanian office portfolio amounted to €11.8 mln for the six months ended 30 June 2019.

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. It was bought by local DIY retailer Dedeman Group in a deal reportedly valued at €120 mln.

The CEE-focused company has drawn attention in Central and Eastern Europe in the past 18 months with big-ticket shopping centre deals including the acquisition of a controlling stake in Mammut shopping centre, Budapest, a deal worth €254 mln.

Colliers International Romania was the sell-side advisor to Nepi Rockcastle and its subsidiaries.

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