Revetas Capital and Cerberus Capital Management acquire Bucharest hotel portfolio

Revetas Capital Advisors and Cerberus Capital have acquired the Project Nemo, a leading hotel complex with approximately 926,000 square feet of gross leasable area in a prime location in Bucharest, Romania. No financial terms were disclosed.

The complex includes the Radisson Blu and Park Inn hotels, featuring a total of 697 guest rooms operated by the Rezidor Hotel Group, as well as approximately 81,000 square feet of prime retail space anchored by high-end tenants such as Burberry and Hugo Boss.

“Project Nemo is one of the most compelling hospitality and retail assets in the CEE region. As the fastest growing economy in the EU, Romania offers tremendous upside potential,” said Eric Assimakopoulos, managing partner at Revetas.

The country was the EU’s top performer in the first half of 2017 (with GDP growth estimated at 5.8 percent) and is expected to hold this position throughout the rest of the year, with a GDP increase forecasted at 5.3 percent, according to JLL. Liquidity improved over the past year as there is still significant yield spread between Romania and Poland or the Czech Republic. However, the availability of quality product is still relatively low, but improving. On the financing side, terms and conditions have improved significantly over the past year getting closer to what can be expected in the core CEE markets. Consequently, sentiment is strong, with total volumes for 2017 estimated to reach close to €1 billion ($1.2 billion).

For the first nine months of 2017, the property investment volume for Romania is estimated at €610 million ($729 million), a value almost 44 percent higher than the one registered in the same period of 2016 (€423 million/$506 million), according to JLL. The number of transactions increased, with the average deal size standing at approximately €25.3 million ($30.24 million).

Bucharest accounted for more than 25 percent of the total investment volume, less than in the same period of 2016, showing that liquidity in secondary cities has significantly improved. Market volumes were dominated by retail transactions (60 percent), while deals involving office buildings reached close to 25 percent, the remainder being represented by industrial and hotel assets.

The largest transaction registered in first 9 months of 2017 was the acquisition of 50 percent of Iulius Group’s retail and office portfolio (Iulius Mall Cluj-Napoca, Iulius Mall Iasi, Iulius Mall Timisoara and Iulius Mall Suceava and 3 office buildings) by South African group Atterbury. This is the first acquisition of the fund in Romania, buying shares in one of the largest retail owners in the country.

The most notable office transaction was the acquisition of Coresi Business Park by Immochan from Ascenta Management for around €50 million ($60 million). This marked the entrance to the office market for the investor/developer who had been previously focused on retail projects. In industrial, the largest deal was the acquisition of the Renault Warehouse Oarja by Globalworth, for approximately €42 million ($50 million).