ARTEMIS GROUP. Chamber of Commerce Switzerland Romania Business Forum October 21, 2015

Transcription

1 ARTEMIS GROUP Chamber of Commerce Switzerland Romania Business Forum October 21, 2015 Swiss success story in Romania: Real Estate experiences of Artemis in Timis County Dr. Michael Soormann, President/CEO Artemis Asset Management Group

2 Agenda 1. Introduction 2. Background of our investments 3. Experiences in the first years 4. Requirements for successful investments 5. Today s projects and actual status a) Giarmata b) Sanandrei c) Dudestii d) Airport Timisoara 6. Lessons learned 7. Summary and conclusion 2

3 1. Introduction Overview of Artemis Holding AG Artemis Holding AG Board Thomas A. Erb, Chairman Dr. Alfred J. Wiederkehr, Vice-Chairman Randolf Hanslin Giannino Löliger Benoît D. Ludwig Nina Pieper Dr. Bernhard W. Stauch Alexander von Witzleben Artemis Group Management Michael Pieper, President/CEO Dr. Andreas Hauswirth Christian Mäder, CFO Dr. Michael Soormann Franke Group Artemis Real Estate Group Feintool Group (>50%) Artemis Asset Management Group Alexander Zschokke, President/CEO Dr. Andreas Hauswirth, President/CEO Heinz Loosli, President/CEO Dr. Michael Soormann, President/CEO Franke Kitchen Systems Artemis Immobilien AG Franke Foodservice Systems Real Estate Participations Franke Water Systems Franke Coffee Systems Franke Beverage Systems Franke Industrie AG Foreign Real Estate: USA Poland Romania Dr, M.Soormann 3

4 2. Background of our investments Franke with a very successful Kitchen Systems company in Bucarest Mr. Pieper as shareholder of Carpatair, located in Timisoara, a very successful airline company until 2011 Decision of Mr. Pieper in 2007 to invest in Real Estate north of Timisoara Why? Timisora with strong industrial development in the past and further big growth potentials in the future (industrial and residential) due to low labor costs, highly skilled people and many infrastructure projects Timisoara as the gate to the Western-European countries and with better history than other parts of Romania But! Low reputation of Romania in Western Europe at that time 4

5 3. Experiences in the first years Real Estate market prices extremely high in 2007 until 2009 During financial crisis Real Estate market prices collapsed Real Estate seller tried everything to sell land without titles in the «middle of nowhere» High bureaucracy and corruption, but situation improved today (slowly) Potential buyers only trust you if you can show real projects, only nice brochures are not convincing Speculative RE developer in the past destroyed trust Good relations to authorities helped a lot 5

6 4. Requirements for successful investments Local trusty people needed with Romanian language skills and know how about the local Real Estate market (own or external) Partners and partner companies required to collaborate with Financial independency is important, avoid any bank debts as long as only Real Estate investments (land) are done Own offices required to be considered as a serious company Find a way to make your projects known (expenses!) Networking and building up relationships are necessary Consider the investments as longterm projects AND: Patience is key in all what your are doing in Romania! 6

7 5. Today s projects and actual status

8 5. Today s projects and actual status Project Giarmata Project Sanandrei Project Dudesti Project Airport Timisoara Size 102 HA 10.5 HA 23.1 HA 8.1 HA PUZ approved approved approved approved Purpose industrial, commercial & residential industrial, commercial & residential industrial & Commercial commercial & airport related industries Infrastructure planning process done planning process on hold Title "Industrial Parc" approval process approved approval process appoval process Selling process first companies ask for land plots ongoing with many interested companies not yet really started due to low airport traffic no demand for the moment 8

9 a) Giarmata Lipova High way Timisoara Swiss Village and Swiss Parc Attractive area for industrial/commercial (Swiss Parc) & residential projects (Swiss Village) Close to the new highway to Arad and Hungary (done), later to Bucarest (build phase) PUZ approved and approval process for official Romanian title «Industrial Parc» ongoing Possible investors: Companies like REAL, IKEA, KIKA, OBI, European logistic companies Utilities very close by (electric power, gas, sewage) Next steps: Building streets and utilities in 2016, approval process running 9

10 a) Giarmata Swiss Village Swiss Parc 10

11 b) Sanandrei HA land at the main road Timisoara Arad close to the new ring road Direct connection road with access to the highway in the planning process Area for residential, light commercial and industrial projects PUZ approved and infrastructure built (streets, electricity, gas, water, sewage,..) Official Romanian title «Industrial Parc» received Negotiations with possible investors ongoing (logistic companies, equipment distributors) 11

12 c) Dudesti DUDESTII NOI CENAD FM LOGISTIC Total area of 23.1 HA for industrial or commercial projects TIMISOARA Common investment with an US investment company Good location between FM Logistics and a Romanian well known furniture company PUZ approved Process for infrastructure approvals started, utilities already on the land or near by, construction foreseen for 2016 Approval process for official Romanian title «Industrial Parc» ongoing 12

13 d) Airport Timisoara Land of sqm Directly located to the airport terminals, land with direct access to the airport runaways PUZ approved Possible Projects - Commercial functions like hotels, business center, offices - Airport functions like repair-, maintenance halls, hangars, catering companies Developments (e.g. infrastructure) depend on future traffic growth of the airport 13

14 d) Airport Timisoara 14

15 6. Lessons learned (1) Acquisition of Real Estate Check carefully the locations (e.g. possible road access, highway access, public transportation, industrial development in that region, ) Check availability of utilities (especially electricity) Choose a lawyer of your trust for legal consulting (e.g. titles are existing, owner is really the owner ) Don t trust arguments from people who want to sell, check and varify all information you get Be aware about market prices (buy and sell) No acquisition with time pressure 15

16 6. Lessons learned (2) Land development projects PUZ developments take always longer than expected (> one year) Approvals for infrastructure-design take more than ½ year, for building infrastructure you have to plan another year (with all approvals for electricity, gas, sewage, water ) Costs for utilities are difficult to calculate and are higher at the end than expected (unforeseen work and requirements) Not all communities support developments in a positive and proactive way Be prepaired to reject any «corruptive help» in the development phase 16

17 6. Lessons learned (3) Selling process (land and total projects) Investors are looking for many alternative locations before taking a decision Romania is in strong competition with countries like Serbia or Mazedonia Infrastructure and available labor force are important for final decisions Locations close to highways are an advantage Price per sqm (land or building) is not the only key parameter for a decision Investors have to understand how long it takes, how difficult it is and how uncertain total costs are, when changing agricultural to buildable industrial land European Funds or State Aid are of high importance and need experts to help/advice/prepare the neccessary documents 17

18 7. Summary and conclusion Artemis RE is a longterm investor, who wants to contribute to the industrial and residential development of Timis County Artemis RE invested more than 17 Mio in mentioned projects and Sanandrei «Industrial Parc» is today the only one in Timis County Artemis RE can offer «ready for build» land for sale/rent/build/finance Buying land from Artemis means, that an investor can start his activities within 9 month (avg. construction time for industrial buildings) and with total cost transparency and safety («no surprises») Artemis RE has no urgency to sell and wants to grow the profitability long term. Speculations and short term earnings are not in focus Reputation of Romania improved in the last years and we are convinced that Romania will be the first investment adress in Eastern Europe in the future we hope our activities will help to achieve this goal 18

19 Thank you for your attention 19