A. Panayides, TerraKapital of Cyprus in EUR 9 mln Romania deal

A. Panayides Contracting Pcl (APC) and TerraKapital, a Cyprus-registered private property investment company, have signed a EUR 9 mln land deal, where they will jointly develop the “Paradise Gardens” a residential project of 120 villas and 150 apartments, in Corbeanca, one of the fastest growing suburbs in north Bucharest.

Just 6.5 kms from Bucharest International Airport, the project covers a land area of 83,000 sq.m. that borders the “Green Paradise” golf course, considered one of the most successful residential projects in Romania.

Marios St. Joannides representing TerraKapital told the Financial Mirror that this joint venture is in line with the company’s investment strategy of focusing on markets with substantial upside potential and limited downside risk with strategic partners who have the local know-how and expertise.

TerraKapital, which is structured like a closed end private fund, has been set up with the aim of generating above-average returns by investing in property assets in the Eastern Mediterranean and South-East Europe, where generally exit strategies are clear prior to investment. Terrakapital will pursue opportunity investments where appropriate bank commitments are secured, thus enhancing due diligence and returns on capital.

Terrakapital is in the second phase of capital raising following the present commitments of seed investors for EUR 5 mln, and plans to close the offering of shares to a limited number of investors at EUR 15 mln, within the next few weeks.

APC Group is the largest Cypriot company involved in real estate projects in Romania, and has concluded several strategic partnership deals with private and institutional investors who are seeking to invest in the booming Romanian real estate market.

Recently APC and Demetra Investments Plc signed a EUR 13 mln land deal for the development of 350 luxury apartments in Baneasa, Bucharest.

Real estate is one of Romania’s most attractive sectors. Local demand for residential development is growing.

Total foreign direct investments (FDI) in Romania remained above EUR 7 bln for a second year in a row. With annualized growth rate of 32.6% in November 2007, Romania is first within EU in construction works for the third consecutive month. At the same time construction works in EU-27 registered an annualized growth of 0.8% in November 2007. The unemployment rate in Romania is currently 3.9%, with Bucharest unemployment rate at 1.9%.