MAS seizes Romania deal
• JSE-listed company pushes in residential property
JSE-listed MAS Real Estate’s Romanian partner, PKM Developments, is behind the largest multi-use property development in that country’s history.
JSE-listed MAS Real Estate’s Romanian partner, PKM Developments, is behind the largest multi-use property development in that country’s history.
MAS CEO Werner Behrens said the company saw large potential in investing deeper in Romania, the second-largest economy in Eastern Europe after Poland. MAS already has exposure to shopping centres — which PKM developed for the company — and now it is pushing into residential property for the first time.
PKM was co-founded by Martin Slabbert, one of the founders of New Europe Property Investments, which is the largest shopping centre owner in Eastern Europe.
PKM develops properties for a joint venture with MAS. MAS owns 40% of the partnership and PKM owns the balance.
Maggie Kitshoff, director residential at PKM, said Romanians had not been exposed to highquality residential property in the past.
PKM has now begun work on the Silk District in Iasi, the second-largest city in Romania.
“The development pipeline consists of three residential projects comprising approximately 3,700 residential units in total. Two of the projects are in Bucharest, with the third in Iasi,” Kitshoff says.
Kitshoff says residential offers massive opportunities.
“The Silk District residential development is the most exciting and largest residential development in Romania’s history. The development has 2,500 apartments and the office development has 100,000m² of class A offices, which are the primary components of the project.”
She said developments of this nature were in low supply in Iasi. “The Silk District combines these components extremely well and effectively opens an opportunity for us to build an entire new neighbourhood in Iasi. In doing so we are constructing a development with high curb appeal to function seamlessly on a continuous basis, with sustainable support functions that will enhance the overall quality and functionality of the new neighbourhood.”
MAS and PKM’s total development pipeline is now worth €800m.
All 2,500 apartments in the Silk District will be built for sale.
PKM is also building Avalon Estate and Marmura Residence. Marmura is located on a 1.3ha plot in Bucharest. It is designed to appeal to Romania’s growing middle class.
The Avalon Estate is a medium to high-end residential project located near Bucharest’s central business district of the city. Kitshoff said it is a gated community concept situated on a lake with a predominantly low density, low height regime that includes almost 3ha of central parks and green areas.
She said Romanians’ spending power and wealth were growing strongly and there was strong demand for better residential offerings than those built by Romania’s old communist government and subsequently by European companies in the past 20 years.
“We are focusing on building a brand that Romanian clients can trust. Sales prices are pitched to be competitive even if the product is of a higher standard than what is offered in the market by other developers. The average cost of a unit is €1,350/m² for the Avalon development and €1,200/m² for Marmura excluding VAT.”
Romania’s GDP grew at 5% in the first quarter of 2019.