Romania's regional cities will benefit from new employment and retail opportunities at brand new commercial centers built with the help of an €80 million EBRD loan.
The 12-year loan to regional property developers GTC and Aura Investments will be used to finance the development, construction, letting and management of retail outlets in Romanian regional cities, helping to bridge the gap in real estate development between Bucharest and the regions. The first three commercial centers will be built in Buzau, Piatra Neamt and Suceva, to the north and north-east of Bucharest, adding to the very few retail chains of international quality that exist outside of the Romanian capital. Hildegard Gacek, EBRD Director for Romania, said this project reflects the EBRD's strong emphasis on supporting the development of the Romanian regions and promoting competition in the regional property sector.
By encouraging the expansion of private investment outside of the capital, the Bank is helping attract quality new investments to the local market and introducing international standards of retail development. The total €80 million ($108.8 million) senior loan to GTC and Aura will consist of €35 million ($47.6 million) A loan for the EBRD's own account and €45 million ($61.2 million) B loan which will be fully syndicated to Raiffeisen Zentralbank Osterreich.
Supporting regional development is a core part of the EBRD's strategy for Romania, aimed at redressing continuing imbalances in economic progress between the capital and regional centers. The EBRD is supporting the private sector in the country together with foreign and local investors, with a special focus on equity and long-term funding. As the process of convergence continues with the country’s accession to the EU, the Bank will continue to support projects which accelerate and strengthen the development of all regions, with the aim to ensure improved standards of living for all Romanian citizens.
GTC has been active as a developer in the Central Eastern European real estate markets since 1994, operating in 9 countries, including Poland, Czech Republic, Hungary, Romania, Serbia and Montenegro. GTC has positioned itself as one of the leading developers in CEE with over 1,500,000 sqm of office, retail and residential space under different stages of development. Aura has been active in Romania since 2005 and is currently involved in developing over 3,500 residential units in Romania and Hungary. Aura is listed in the Tel Aviv Stock Exchange since its incorporation in 1992.
This project builds on the Bank's experience in this sector. To date the Bank has invested €280 million ($381 million) in the real estate and retail sectors with the aim of supporting regional development in over 40 cities with a total population of more than six million.
The European Bank for Reconstruction and Development is one of the largest investors in Romania, having invested €3.5 billion ($4.7 billion) in 230 projects so far and helped mobilize additional €6.4 billion ($8.7 billion) from other sources. (ebrd.com)