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Moldova Projects. 24 hectare. Moldova. טלפון: 03-9063563/4/5 פקס : 03-9063564 bardac@bezeqint.net. City Center. Main Streets. Group’s Sites. The development of Moldova. Recently, Moldova enjoys a higher economic growth and a great financial potential;
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Moldova Projects 24 hectare
Moldova טלפון: 03-9063563/4/5 פקס: 03-9063564 bardac@bezeqint.net
City Center Main Streets Group’s Sites
The development of Moldova • Recently, Moldova enjoys a higher economic growth and a great financial potential; • The foreign investment in Moldova getting stronger countrywide; • There is a substantial increase in interest from International businesses and investors looking to access the Moldova market.
Executive summary Market in general • Moldova has been one of the best performing economies in the Balkans area; • Avg. income is one of the lowest in Europe, but so is the cost of living; • Investors have shown interest in the country due to government replacement in 2000 and increase in stability, health and local economy.
Executive summary Market in general Positive: • Moldova considered as stable, politically and economically wise; • Moody and Fitch upgraded Moldova’s credit rating; • The privatizationof the banking sector has been successfully completed, and other sectors in the country are heading towards full privatization including land. Negative: • Government's authorities still held heavy bureaucracy.
Executive summary Real Estate • Real Estate market in Moldova has been dynamic over the past 3 years; • Real Estate prices have seen a substantial increase; • Moldova will provide structural reforms and increase transparency that will influence the Real Estate sector; • Foreign investments in Real Estate can be done directly through a registered company, including constructions and limited rights over Real Estate: • E.G. leasehold or construction rights.
Executive summary Real Estate • Shopping centers, retail parks and bespoke logistics parks are being developed as well as offices and hotels; • The Real Estate section will gain from the economic growth, reform continuation, inward investment and regeneration.
Executive summary Areas of Market Opportunity • Chisinaucenter: • offices are easily absorbed, usually at premium rental levels; • Stefan Chell-mari market, connecting downtown to neighborhood, has high demand among owner-occupiers and holds opportunities for speculative office; • Demand for higher quality serviced offices is expected to increase as more businesses entering the market; • Town such as Ungen, hold great opportunities due to lack of office accommodation.
Executive summary Areas of Market Opportunity • In the past Moldova wasn’t identified as investment target because of the legacy of communist rule; • Since the number of modern warehousing facilities is reduced it is expected to increase again; • The areas between Chisinau to the airport contain opportunities in logistic sector.
Recent Economic Trends Recent Economic Trends
Recent Economic Trends Income and Expenditure • In 2004 the average monthly incomes increased by 6.3%, while the average of household spending increased by 14%; • In 2004 retail spending with household goods and appliances have shown growth of 15.3%; • In 2005 the spending has slowed but still remained over 8%; • The inflation grew within a year from 2.3% to 4.6% in 2004, however the growth occurred as the year progressed.
Economic outlook and forecasts Income and Expenditure • The inflation is expected to decrease below 4% by 2007 as long as the current account deficit declines; • The exchange rate risks are expected to decline; • Both the Euro and Moldovian Lev would be allowed to be used in cash transactions; • The GDP in Moldova is expected to rise by 40% in purchasing power parity terms between 2002-2007.
Economic outlook and forecasts Economic Outlook
Labor Market • The unemployment rate declined from over 17% in 2000 to 12% at the end of 2004 (currently 8%); • The unemployment rate is expected to continue with the decline – below 10% in 2006/2007; • In Moldova the average wages of a relatively skilled workforce is low; • The salaries in the public sector are higher than the salaries in the private sector by nearly 35%; • The average monthly wage in December 2004 stood on 147 Euro; • There is lack in qualified and experienced managerial staff; • Many Moldavian are living in the center of city.
The Real Estate market • Office market in Chisinau: • Considered as the most developed in Moldova; • The largest office scheme, business park in Chisinau , is one of the preferred destinations for tenants, which offers good quality and flexible space; • Business center Poskin and Stefan Chell-Mari in central Chisinau , has recently completed and is being offered on the market with a full vacant possession; • Office development schemes now being offered for sale and current profit in the region of 10%-13% - higher than those in Central Europe; • Avg. offices rental is 20 Euro/m2.
The Real Estate market Demand & supply • Last year the demand for quality offices increased by foreign investors and domestic companies. The increase is expected to continue; • Local occupiers prefer grade B office accommodation than grade A, because of the high price; • Due to the demand for offices spaces in Chisinau, there are constructions in process which eventually will add 45,000 m2 before the end of 2007.
The Real Estate market The retail market • International food groups are opening hypermarkets and supermarkets currently in Chisinau; • There is a growing number of other retailers such as fashion and designer; • Retails are planning to expand to other new areas; • The most important retail location is Poskin-Colomna and Stefan Chell-Mari; • Department stores are situated in the key residential quarters of Chisinau and in centers of medium to small towns; • The largest retail schemes in Moldova are the mall; • The building plans of flats is increasing.
The Real Estate market Demand & supply • During mid 1995 foreign retailers entered the Moldova market; • The demand in prime high street area is high, however a suitable supply is limited; • Poskin is the most demanded street, and finding vacant offices in the area is almost impossible; • There is shortage in the main streets of Chisinau; • New retail outlets are being developed mostly in new apartments blocks with retail units on the ground floor in the suburbs; • The largest retail development in Moldova is Chisinau’s mall.
The Real Estate market The industrial market • Distribution is expected to develop more rapidly in the near future; • Key areas of logistics activity are areas around and Chisinau airport and the main artery roads running east-west and north-south through Chisinau; • Several new logistics hubs may emerge along the main north-south road from Chisinau airport therefore the trading between Moldova and other countries in Western and Central Europe is expected to increase.
The Real Estate market Demand & supply • International and domestic companies have both shown interest in industrial Real Estate; • The demand for local, regional and international distribution has increased, due to the growth of privatized businesses and foreign firms; • There is shortage of modern warehouse space in Moldova; • Warehousing development is emerging in suburban areas where land prices are still low.
Real Estate Values and Performance The office market • Between 2000 and 2004 the office rents in Chisinau declined due to the economy weakening and increase of new development emerging on the market; • Office space, for sale, in Chisinau is offered at between 1000-1500 Euro per m2 ; • In 2003-2004 capital values were stable; • Rent is expected to increase moderately this year.
Real Estate Values and Performance The office market Prime Office Rents (€/m2/yr):
Real Estate Values and Performance The retail market • Recent years, retail rents have shown steady growth; • The average prime rents are around €15 per m2 per month: • Poskin Stefan Chell-Mari, rent is €60 m2 per month; • In the market the rent is in the range of €12-20 m2 per month; • The capital values in Chisinau are depending on the location and the supply of the retail units in each area; • The most expensive location is Stefan.
Real Estate Values and Performance The industrial market • The rents of modern industrial in Chisinau started to increase in 2004 (after a fall in 2000-2001) and expected to continue; • In 2005 the yields went down to 10%, due to the increase in demand for such Real Estate and the limited level of supply; • The second most demanded location for industrial Real Estate is Ungen.
Real Estate Values and Performance The industrial market Prime Industrial/Logistics Rents (€/m2/yr):
Recent Purchases in Moldova • Several of the largest exclusive car manufacturer has opened offices in Moldova: • BMW, Mercedes, Jaguar, Volvo, etc; • World wide Metro has opened stores located in Chisinau.
The Finance of Projects in Moldova • Only European or Moldovian companies are entitled to participate in projects that are financed by the EU money; • There are three funds for financing projects: • Eximbank – financing small and medium businesses in projects such as tourism and infrastructure to scientific education; • Ebrd- financing projects in the water and air contamination and transport area Also financing projects such us: • agriculture friendly to the environment, management of water reserves, developing of wholesalers markets, building infrastructures in villages area and technical service support to the agricultural; • World Bank manages 26 Projects in Moldova with a total budget of 175 mllion dollars.
The Finance of Projects in Moldova • Israeli companies that want to access to projects in Moldova with UN finance, would have to establish Moldovian company or do it in indirect way (Israeli company that works through Moldovian company in the country).
The World Bank • The world bank committed to 14 projects in Moldova mostly to projects that related to infrastructure: • Roads, energy, telecom, health, education, employment, agriculture; • private sector: medication industry and food manufacture, quality of environment; • In projects that are financed by the world bank, Israeli companies are entitled to participate.
The Deal - General • Purchasing a land (24 hectare); • Changing the land zoning to residential and commercial; • Removing the existing buildings; • Build a neighborhood of 420 residential units include services: • swimming pool, gym; • Sell the units to the final costumers.
The Deal – Business Plan • The Deal is subject to a bank financing; • The Bank will finance half of the land price, and in total 80% of the project costs (including the land); • The loan will bare interest of 9% in EUR; • The loan will be paid at the end of the project period.
The Deal - Costs Costs % sqm Units cost/ sqm cost Land 210,000 € 30 6,300,000 € Land 30,000 12 €360,000 € Land Tax 87,500 € Real estate agent fees 2.0% 57,600 € Demolish costs 150,000 € Buildingcosts - Apartments 70,000 400 350 € 24,500,000 € Finance costs 9.0% 1,225,000 € Planning costs 3.0% 400,000 € Sales commission 2.0% 500,000 € Legal costs 150,000 € Management costs 5.0% 1,000,000 € Additional costs (reserve) 5.0% 600,000 € Initiation fees 1.5% 300,000 € Total Cost35,630,100 € Gross sale profit before cost 70,000 x 800 = € 56,000,000
