Real estate developer Hagag Development Europe signed a partnership with Romanian peer Niro Investment Group to refurbish a 6,800 square meter office building built by the latter on land under concession in northern Bucharest. 

The building will be renovated, and the first tenants will move in at the beginning of July. 18% of the office space has already been leased, and an occupancy rate of at least 70% is expected by the end of this year.

Hagag paid EUR 5 million to purchase 50% of the office building and will cover 50% of the EUR 0.5 million refurbishing cost, according to Economica.net.

Niro holds 49-year concession rights over the land under a contract concluded in 2005 with the state. The remaining duration of the concession contract is thus approximately 29.5 years, until September 15, 2054.

At the end of the concession period, the building will revert to the Romanian state, free of charge. Niro holds a pre-emptive right to purchase the land and the building at market price, if the asset is put up for sale by the concessionaire at that time.

iulian@romania-insider.com

(Photo source: Tsyhun/Dreamstime.com)