How dozens of factories have been transformed into offices, malls, and new apartments
We present a cover article in Business Magazin, where we are quoted, about the reconversions of the old industrial spaces in Bucharest and how many of them have been transformed into modern offices, malls, and residential complexes:
“The representatives of the real estate consulting company Esop also mention the fact that, in 1989, 15 industrial platforms were active in the Capital: Pipera, Obor, Colentina, Militari, Panduri-Viilor, Dudesti, Plevnei-Orhideelor, Stefan cel Mare, Popesti Leordeni, Republica -Faur, Mihai Bravu, Progresul, Semanatoarea. They had a total area of 2,680 hectares, representing 11.25% of the city’s area at the time. “Although we are going through a period of effervescence in the development of huge real estate projects, of tens and hundreds of millions of euros, on the lands of former industrial platforms, we estimate that less than a quarter of the spaces on these platforms have been transformed, they have undergone modern reconversions – in office, residential or commercial spaces.
The rest of the factories still own old spaces, which they have partially renovated and rented. They always carry out industrial activities or keep the areas in conservation. Therefore, we consider that there is still a great potential on this real estate segment, for capitalizing the lands and spaces on industrial platforms “, says Alexandru Petrescu, managing partner of Esop Consulting | Corfac International.
“Of the quarter that was the subject of reconversions, the representatives of Esop Consulting talk about the transformation of the Electronica factory in Pipera into the Iride office complex, which represents, chronologically, the first reconversion in Bucharest, being both the oldest and the one that will extend most in the future, being a staged development that began in the early 2000s and will continue for another 20 years from now. Iride now totals a rentable office area of 92,855 sqm but is estimated to reach 200,000 sqm in the long run.
A spectacular development is the recent transformation of the FEA (automation equipment) factory into a mixed, commercial, and office complex, consisting of Promenada Mall and Sky Tower, the tallest office tower in Romania.
The consultants offer as an example the Sema Parc project, on the site of the former Semanatoarea factory, which provides for the development in the next two or three years of an additional area of 39,000 square meters of offices and 314 apartments in phase 1 residential development, as well as the Afi project. Palace Cotroceni is another new mixed project, commercial and office, located on the former Bucharest Electric Car Plant. “So far, the development of the Pipera industrial platform has been highlighted, in two stages – first around the Pipera metro station and then at Aviatiei. In parallel, but on a smaller scale in terms of impact – because there were fewer factories available and with smaller areas – the platforms Stefan cel Mare (conversions in residential and offices) and Colentina (conversions in residential and commercial) were highlighted.
From now on we will witness an accelerated development of the Orhideea – Plevnei platform, located in the heart of the city, on the site of the former cigarette factories, IFMA, Bere Grivita, Spicul, Plevnei, being provided several offices and residential projects, scheduled to be delivered in 2016-2017 “, remarks Alexandru Petrescu. As residential developments, the representatives of ESOP Consulting offer examples such as Rose Garden on the land of the former Colentina Fabric Factory, Central Residence Park, where Olmazu Mill, Ata Enterprise, and November 7 were transformed into the In City complex.
“The renovated historic buildings on the former industrial platforms also have a particular value and a unique beauty. With office destination, the successful reconversions of Metropolis Center (from the Stefan cel Mare area, former Cartea Romaneasca Printing House) and Caro Parc (former Glucose Factory, from Pipera – Barbu Vacarescu) can be noticed “, they observe.
Real estate developments are made both on concessioned lands of some former communist factories, and on lands bought together with the assets of the factories. “Depending on the time of purchase, the size and location of the plant, they ranged from hundreds of thousands of dollars in the 1990s to tens of millions of euros today (for example, Globalworth bought Ford Hall with 25 million euros, Ikea bought with 35 million in 2010 the Timpuri Noi factory, where it now builds offices), according to ESOP Consulting consultants. They also note that there were several stages during these developments: between 1989 and 2005, factory owners tried to renovate them quickly, strictly necessary, in stages and to rent out the excess space – industrial or office.
Since 2005, during the period of accelerated real estate growth, the demolition of old buildings and the construction of large, large-scale projects from scratch have continued, a trend that continues today. Still, there are also industrial areas of the extreme periphery that will keep this destination. Furthermore, the ESOP representatives note that there are development opportunities and estimate that in the next period the residential projects will be targeted, as a result of the demand on this real estate segment and exemplify through the Globalworth residential project that will be built on the site of the former Ford hall from Calea Floreasca. Regarding the acquisition costs of some old factories, Esop representatives note that, depending on the time of the acquisition, the size and location of the factory, the purchases were made from amounts of hundreds of thousands of dollars in the 1990s to tens. Millions of euros in recent years “, the article also writes.
Starting from the statistics given by us, from our comments on the successful examples on the market together with other opinions of some key people in the real estate market, the journalist Ioana Matei made an extraordinary material, which gathers in a few pages all the 25 years the evolution of the market of old industrial spaces and how they have become attractive for investors.
Thank you, Ioana. We invite you to read the full material on the magazine’s website: 10 stories of the reconversion of the former factories. They have become places of leisure or real estate projects.