AFI Palace Cotroceni, one of the largest shopping malls in Bucharest, owned by Israeli group AFI Europe, saw its net operating income increase by 6.7 percent in the first quarter of this year (Q1), to EUR 7.3 million, AFI Europe reported. Based on Q1 results, net operating income for 2014 is assumed to exceed EUR 29 million.

AFI Properties, the parent company of AFI Europe, posted an 8 percent year-on-year growth in net operating income in Q1, to EUR 19 million. This means that AFI Palace Cotroceni contributed with a third to the operating profit of the group in the first quarter. AFI Properties is listed on the Tel Aviv Stock Exchange.

The trend was similar in 2013, when AFI Properties posted net operating income of EUR 73 million while AFI Palace Cotroceni had a net operating income of EUR 28.7 million.

AFI Palace Cotroceni is the most valuable asset which AFI holds in Romania, with a total value of about EUR 375 million as of September 30, 2013. The mall, which is over 98 percent occupied, showed an increase in shoppers’ footfall to an average of 55,000 visitors per day in Q1 2014.

AFI has another shopping mall in Ploiesti, AFI Palace Ploiesti, which is valued at EUR 64.2 million. The mall in Ploiesti is 99 percent occupied and brings in an average 15,000 visitors per day. The company didn’t release the operating income for this shopping center.

On the office segment, AFI Europe Romania has officially inaugurated on April 15, 2014, AFI Park 2 which 100 percent of its office spaces are leased. The first office building AFI Park 1, with 12,250 square meters of leasable area, is 100 percent leased while AFI Park 3 which is due to be delivered in December 2014 is already 40 percent pre-leased to UK held IT company Endava Romania.

“AFI Europe Romania is continuing to show improvement in the financial results. Following the inauguration of AFI Palace Ploiesti and AFI Park 2, AFI Europe Romania portfolio of income producing assets has grown significantly to more than 135,000 square meters of gross leasable areas with an average occupancy rate in all assets of 97 percent and an net operating income in 2013 of more than EUR 31 million. We plan to continue our momentum of developments with additional office buildings and shopping malls,” said David Hay, CEO AFI Europe Romania.

AFI Europe Romania is now focusing on the development of additional retail projects – AFI Palace B.Noi the shopping mall to be constructed in Bucharestii Noi, the retail park in Arad - AFI Palace Arad and the new office project AFI Business Park located in Bucharest on Progresului Boulevard.

Romania is currently the most important market where AFI Properties is currently focusing its development activity. In addition to Romania, AFI Europe operates in 7 countries in Central Eastern Europe (CEE) including Czech Republic, Serbia, Germany and Poland.

Andrei Chirileasa, andrei@romania-insider.com