The Bucharest court approved bankruptcy proceedings for the Armonia Braila shopping center at the beginning of December. Owned by Red Project Three, a company founded by businessman Andrew Stear and investment funds Warburg Pincus and GED, the shopping center was closed down in August 2009, soon after opening, due to low visitor numbers and weak sales recorded by the main tenant, a Carrefour hypermarket.

The investment for Armonia Braila amounted to around EUR 45 million, and the shopping center had a rentable area of ​​29,000 sqm. The main creditor was Volksbank, and the total value of the debt reaches around EUR 35 million. Casa de Insolventa Transilvania is the judiciary administrator of the shopping center and the assets’ sale process will begin next spring.

This is the third shopping center closed in Romania after Tiago Oradea and Bucharest City Mall, which have already been sold in the liquidation process. Real estate investor Ioannis Papalekas bought back the City Mall shopping center in Bucharest for EUR 17.3 million, while local firm Shopping Center Holding took over Tiago Oradea in a deal estimated at EUR 30.5 million.

Irina Popescu, irina.popescu@romania-insider.com