Head of AFI Europe: no need to quicken the leasing process of a mall

AFI Europe developer will deliver next year AFI Cotroceni Park commercial center, which is almost fully leased at this point. Reuven Havar, managing director of AFI Europe outlays the reasons why a developer must not force the leasing pace and what is the best moment to open a commercial center.

AFI Cotroceni Park is located at crossroads of Timisoara and Vasile Milea boulevards in Bucharest, in the former plot of UMEB factory and covers 76,000sqm surface for rent. The project will include four more office buildings and a hotel, the investment being estimated at nearly 300 million euros.

“The mall is almost 90% leased, but we blocked the leasing process. As a developer, if you want a good profit, it is best not to rush into leasing commercial spaces. You first sign the contract with the constructor, and when you get an idea on a price per square meter, you can start the leasing process,” said Reuven Havar, managing director of AFI Europe.

AFI Europe is developing at the moment another commercial center, located in Arad, AFI Palace, which covers 33,000 sqm and 12,000 office space, the company pumping 100 million euros in the project.

“The commercial center in Arad is 10% rented, but we will not quicken the leasing process there either. Even if near to the project will be emplaced another mall, Atrium Center Arad, we are not concerned in tenants. In the retail market, we count on the strength of our trademark, and if the rents are high, there are surely high for a reason,” AFI Europe’s managing director added.

Reuven Havar describes AFI Cotroceni Park as a “dramatic project” and remembers on how players in the local market feared to take the risks of a project of this size, when they had to select the constructor.

“We selected Danya Cebus Rom (subsidiary of Africa Israel Investments LTD), as no other constructor accepted the project. At first, we had no idea on how long it will last the construction process, but now we are certain there will not be any delays. Furthermore, it’s in constructor’s best interest to complete the project in time, as it will receive a few million euros bonus,” Havar stated.

Together with Danya Cebus ROM, AFI Europe considers developing infrastructure projects in Romania, sector which is to be exploited in the upcoming years, according to AFI Europe manager.

AFI Europe will deliver the commercial center next year, before Christmas, as it is considered a key moment to open a mall, as the purchase force is increased near the winter holidays.

“There are two key-moments to deliver a mall: Christmas and Easter, yet Christmas is more appropriate. AFI used this strategy for other projects, and proved to be the right decisions in all cases,” Havar stated.

The developer considers starting construction works for office spaces late next year, which will require a 90 million euros investment.

“We will set up the four buildings at a time, and we intend on starting late next year. Now we have to decide if the fifth building will be a hotel or an office building. Have developed a similar project in Czech Republic and we noticed that the synergy between a hotel and a mall is very good,” Reuven Havar explained.

Translated and adapted by Camelia Oancea.

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