Introduction
Bucharest is booming, yet Romania’s capital has a short supply of well-located, top quality commercial investment property. Situated on the western edge of the city, close to the arterial A1 highway, CentreWest Commercial Park is ideally located for both small businesses needing logistics space and to serve the thousands of shoppers that use the ring road every day.
Commercial properties are often the first choice for professional overseas investors because they are easier to manage and have minimal overheads. Our CentreWest units come with all the benefits of commercial investment property but at an entry price that is affordable to all.
Our logistics units represent the perfect hassle-free investment with a guaranteed 8% net rental guarantee for up to 10 years.
The retail units have the potential to be cash-positive with much higher expected yields of 15% but this is not guaranteed.
Demand for similar units from both multi-national and local businesses is strong – an ideal supply/demand situation to support future capital growth.
A 35% deposit with 65% non-status finance – virtually unheard of in this market – can secure a commercial unit in this development.
The developer of CentreWest is Paradise Valley Invest SA. Paradise Valley is a Romanian special purpose vehicle set up with the sole purpose of developing land and property in Bucharest. The key people behind Paradise Valley are George and Akis Pierides, a Cypriot father and son team.
The Pierides family is a respected name in Cyprus. They own the country’s largest electrical wholesaler, Pierides Electrical Ltd, with a 2005 turnover of more than £6 million. It is considered one of the most important companies in Cyprus, with a number of retail shops, and joined the Cyprus Stock Exchange in 2000. George and Akis are two of the main shareholders of Pierides Electrical.
As entrepreneurs, George and Akis have been actively involved in property development for more than ten years, on smaller projects in Cyprus and Greece. They have been in the Romanian market since 2005, buying and selling land and property. In order to ensure success in the market, George moved from Cyprus to Bucharest in early 2006 and has an office in central Bucharest. They are uniquely placed to capitalise on their expertise to ensure CentreWest is planned and executed to the highest standards.
To further ensure development quality and success, they are using the same trusted Cypriot project development team they have used on developments in Cyprus and Greece. Using this familiar, tried and tested team gives great security and peace of mind.
The CentreWest site is the developer’s second full-scale development in Romania.
Buyer Risk
The land on which CentreWest is to be built is currently classed as agricultural land.
The developer is in the process of obtaining municipality planning permission to develop the land and will apply for detailed planning permission for the units once municipality planning permission has been achieved. This is likely to take six to ten months.
The developer has a good track record in this, having been successful previously in buying agricultural land, gaining planning permission for his Forest View development, south of Bucharest, and having it re-zoned by the municipality for residential development.
In the unlikely event that planning doesn’t come through within ten months from the date of your first 15% payment, you will be safely covered. As stipulated in the buyer contract you will receive from the developer, in that event of delay, he will refund your 15% reservation deposit plus a penalty of 1% interest per month of delay.
Buyer Security
It is still very early on in the development cycle in Romania, where most funds deposited by prospective buyers for developments are still unsecured. However, we have secured extra protection for our investors.
To underwrite this deal for you and secure your money, we have negotiated with the two principals behind the development, George and Akis Pierides, to both give personal guarantees for any money deposited by buyers. This will show in the contract you have with the developer.
A personal guarantee means that the individual giving the guarantee is personally liable to pay the amount owed to you; that he must pay you if he is in default of payment; and that you can sue him and claim on his worldwide personal assets if he doesn’t pay.
Personal guarantees mean nothing without the means to pay them, and we must see proof of substantial assets before accepting them. As you can see from the website
(http://www.pierideselectrical.com.cy/main/data/articles/2005%20publis%20FS.pdf) of the Cyprus stock market listed electrical company that George and Akis run, they personally own more than 20% of the company, which turns over more than £6 million per annum. This is a substantial shareholding and fully supports their ability to provide personal guarantees.