The decision to put on sale the building came shortly after the investments banks Natixis and La Banque Postale completed the merger process of their real estate divisions AEW Europe and Ciloger. The new group became third larger asset manager on the French market, with a portfolio exceeding EUR 24 billion. Apart from America House, AEW Europe also owns in Romania the retail park Promenada in Târgu Mureş.
America House in Victoriei Square was bought by AEW in autumn 2007 from Globe Trade Centre (GTC) for EUR 120.3 million and an investment yield below 6 pct., which remained invincible on the market to present day. This was the only real estate transaction with a yield comparable to those of more mature markets in Central Europe.
The yield is an indicator used in real estate market to determine the profitability of a property. The net value is calculated by deduction of annual operational costs of the building from the annual rent generated and the result is divided to the property’s value.
Today, in order to reach a gross yield of 7.5 pct, as currently on the market, the selling price of the building should exceed EUR 100 million if the building is generating annually revenues from rents of nearly EUR 8.3 million, according data from 2015 published by the Ministry of Public finances. However, this price is hard to obtain considering that the building needs substantial modernization investments, being one of the first office buildings developed in Romania. For instance, the market value of Tower Center International, a building with a similar commercial area and position, is EUR 76.5 million.
Though, the real estate consultants questioned by Capital magazine see fit the putting on sale of America House in this moment, as the yields started to decrease, which would favour the building’s owner.
America House has a rentable area of 27,500 sqm and tenants such as Deloitte, Mastercard, Ericsson, Cisco and the Embassy of Japan.
In 2008, few months after the acquisition of America House, AEW paid EUR 90 million for Promenada Mall in Târgu Mureş, bought from BelRom.
In the end of September 2015, the local portfolio of AEW was evaluated at EUR 136 million.
Real estate investment market in Romania is on an ascending trend, reflected both through transactions volume and the growing interest of foreign investors following favourable conditions of capital movement, positive macro-economic environment and betterment of the financing condition in the country. In 2016, the real estate market maintained a comfortable level of liquidity, the total investment volume being of EUR 720 million.
AEW Global is a network of companies managing real estate investments, having its headquarters in Boston. The European component of the group is AEW Europe, owned by the French financial group Natixis and La Post.
AEW is the only real estate investor with American connections present in Romania, which is not part of the hedging funds category, but of the institutional investors, which attract capital from pension funds, insurance companies or private education institutions. (source: capital.ro)