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22 May 08 | Ivana Bozjak
Ivana Bozjak

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What is the relation of GERF to equity?

What is the relation of GERF to equity?
The nature of the investment is completely different. Some businessmen want private equity, others want to invest in real estate. However, since 2003 we have seen that the Balkan real estate market is very active. Since we had our offices ready, we were fully organized and had the knowledge of the area's economy; it was natural to proceed to the creation of a property fund.
How difficult is it to create a fund at this time of the global credit crisis? Are the banks more cautions as to their lending?
The hard part is not to create a fund. What has changed is the way the banks are funding. A year and a half ago we could take money for land purchase and for constructing without having a single client, nor a tenant or a buyer of a single square meter. Today banks want to see that you have booked your customers for the 30% - 40% of the project.
Isn't the investors' trust shaken due to the crisis?
In no way, because the Balkan market, especially Romanian market, has a great potential. It might not be able to speed up with the intense rhythm of last year, but it will continue having strong bases and present opportunities.
At what degree the presence of EBRD to the share capital of the fund constrains you and which are the benefits from this cooperation?
EBRD has been investing along with us in the Balkans ever since the first fund on 1993-1994. The countries that needed then the investments and the technical know-how are today members of the European Union. Now EBRD has its eyes more on the west Balkans, such as Albania, Bosnia, Montenegro, as well as, Ukraine and Russia. They think that Romania and Bulgaria have reached a level where they do not need EBRD's assistance. Now we are in discussions on how to make possible the cooperation of the second fund with the bank.
What is the influence to you from IMMO Finance's negative results, since it has a 40% share?
IMMO is a very strong company, which has purchased properties in Poland and the Czech Republic, which have already been sold. I do not see any weaknesses even if it has losses in the Stock Exchange.
At which performance do you aim when you purchase properties?
We have been aided because we had purchased land in very good prices and now the prices have speeded up. The performance is probably more than 20% and that is our minimum goal.
The private equity recently sold the Romanian supermarket chain La Fourmi. Does that mean that you are not interested in investments in commercial property and focus on offices and residences?
To make a project of that scale we want to have clients at the level of Carrefour or something similar to that. To have La Fourmi lending 2,000 square meters means nothing to us. We are looking for clients for 10,000, 12,000 or 20,000 square meters and not a local name. La Fourmi is the ideal client for the ground level floor of an office building and a small supermarket for the locals.
Is there an investment product in Greece? Would you be interested in purchasing a completed shopping mall?
In Athens there is the slow construction of product. New shopping malls will be developed, as well as, more projects will be made. However, the Balkan market races faster and the performance is still very satisfactory.

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