Investments in the renovation of historic buildings in Bucharest have exceeded 100 million euros in the last three years.
In 2015-2016, the number of investors increased, and they were interested in buying old, interwar historic buildings, located in ultra-central areas, which they renovated to international standards and introduced in the commercial circuit. In the last three years, foreign and Romanian investors have bought old, ultra-central properties and renovated them, with budgets totaling over 100 million euros.
These investors include groups specializing in real estate investments such as NEPI, Global Vision, Iberia, Hercesa, S + B Gruppe. Still, also companies or individuals who view this market as an investment option, such as FF Group Romania, which inaugurates a historic building renovated this month. In total, the stock of the 2,058 historic buildings on the list of historical monuments in Bucharest amounts to about 926,100 sqm, of which about a third, with a total surface of 277,830 sqm are renovated or under renovation and have commercial potential, according to ESOP Consulting estimates.
“An ultra-central property, with a valuable architecture, is a medium and long-term investment, which retains its value over time, or there are high chances of increasing the value of these properties. Promoted to a rent adapted to the market, it will find customers at any time, whether in the office, retail or hotel field, etc.
As a trend, I noticed that in the last two years, larger buildings, over 1,000 sq m, have been chosen as investments, which required significant budgets for renovation and more complex works, but have also generated generous rental areas, which can serve for mixed destinations. Potential current ESOP tenants interested in such buildings include embassies, cultural institutions, marketing, and advertising companies, business consulting, law firms, medical clinics, private educational institutions, and other types of companies operating in the field of professional or personal services” says Alexandru Petrescu, Managing Partner at ESOP Consulting / Corfac International.
The last property of this kind entered on the market is FF Group Romania, which is located in the Magheru-Universitate area, with maximum visibility, with a total built area of 4,858 sqm and with a leasable area of 2,160 sqm. The building has two elevators, 24-hour security, CCTV, BMS, 4 pipe air conditioning system, with fresh air supply and its central heating. The interior spaces are bright, with a height of about 3 meters to the ceiling, specific to the old villas.
Another investor of the same caliber is S + B Gruppe, which recently renovated a historic building on Magheru Boulevard, with an investment of 20 million euros and transformed it into a mixed center of offices and commercial spaces called Magheru One. Magheru One has a leasable area of 3,828 sqm, with a height of six floors + a secluded story, with 80 underground parking spaces. The building has BMS (Building Management System), generator for vital systems, four pipe air conditioning with fresh air supply, two elevators, and data voice cabling.
Esop brokered two transactions in this building, one space being rented to a media company and another one to an IT&C company.
Another property recently renovated is that of Global Vision, which has invested in a business center resulting from the renovation of an old building, located in the ultra-central area, at the University, with a total leasable area of 2,285 sqm, situated on Ug + Gf + 4 floors + attic. The office spaces for rent here are modernly compartmentalized, in the form of partitioned open space. The building has all 21st-century facilities – air conditioning through split units, Schindler elevator, voice data cabling, vital systems generator, and 24-hour security. Here you can rent offices with areas between 182 sqm and 1,291 sqm.
The NEPI project in the Victoriei Square area is again a large one. In the third quarter of this year, the complex called Aviatorilor 8 will be delivered, with a total of 9142 sqm, of which 8,400 sqm of office space. Aviatorilor 8 has in the architectural center an old, interwar historical building, Mihai Oromolu House. The project, in which NEPI will invest 37 million euros, will also have an underground car park with 204 spaces.
The pioneer in this market was the Romanian investor Ion Lazăr, who renovated the former Fabrica de Glucoza, a historical monument building in the northern area and transformed it into office space, 20 years ago. The first tenant for the office space in the Caro Complex, resulting from renovations, was the multinational company Unilever, which signed a contract with a term of 15 years from that date. The complex has been expanded several times.
Over the years, in Complex Caro, ESOP Consulting has brokered the lease of several office or service spaces, including a 470 sq m office for Dren Company and a space for the office of a medical cosmetic for corporates.
Soravia, an Austrian investor, inaugurated in 2008, a large center also resulting from the renovation of a historic building, which included a mixed office, with a leasable area of 11,000 square meters, retail on the ground floor and an aparthotel. In the period 2013-2014, the aparthotel was also transformed into offices, due to the high demand in this segment. ESOP Consulting has brokered the lease of space in this complex to the pharmaceutical company Queisser Pharma.
The Spanish groups Iberia and Hercesa represented another stage in the development of this business, they bought ultra-central historic buildings in the area of Cismigiu Park, which they renovated and delivered the resulting spaces for rent in 2012-2013.
Hercesa renovated the former Hotel Cişmigiu (photo), built in 1912, with an investment of about 15 million euros and transformed it into a beautiful office complex, with a total of 10,000 square meters the primary tenant is the Cervantes Institute.
Another old building, built in 1929, was bought and renovated by another Spanish investor, the Iberia company, and also in the Cismigiu area. It was inaugurated in 201, the new destination being offices. Out of the total of 1,700 sq m, as much as this building has, ESOP Consulting rented more than half of the spaces, over 1,000 sq m, to six companies, with various objects of activity – HR, IT, software, financial services.
Customer profile: companies that associate with an emblem image
From the experience of ESOP, which annually mediates dozens of transactions with villas in Bucharest, office spaces in historic buildings are chosen mainly by companies that use them as headquarters for business consulting, law, advertising and marketing, personal or top IT services, cultural institutions or luxury retail. ESOP tenants who have chosen historic villas include the British Council, the Macedonian Embassy, Queisser Pharma, Dren Company, Lindner, Pendulum Jobs.
The ballet house moved at the beginning of this year in a space of 238 sq m. It was arranged in a historic multi-story building renovated by a local investor, presented by ESOP, on Moşilor Street, behind the Cocor store, in area 0 of the Capital.
The rental transaction mediated by Esop Consulting reveals very well the profile of the clients interested in these spaces, companies with artistic and cultural profile, for which the beauty and authenticity of the office is an emblem.
The building chosen by the Ballet House dates from the end of the 19th century. It has a unique charm, but inside it benefits from all modern facilities. The renovation is completed at the end of last year. The building is part of the “Ansamblul de Arhitectură Calea Moşilor “, known for its commercial activities since the 19th century. The facade, composed and decorated in an eclectic manner, is representative of the houses in the architectural ensemble considered a historical monument in the Moşilor area. In total, the villa has an area of 819 square meters.
Rents increase as space is occupied.
Presentation rents for office spaces in renovated historic buildings range from 12 to 18 euros/sqm/month. The higher the occupancy rate of the building, the higher the rent. There are small vacant spaces in such buildings for rent and by 20-30% than at the date of the inauguration of the renovated property.