Star Residence Invest wants to acquire an office building in Bucharest for 19 million euros

Star Residence Invest (REIT), a company established as a vehicle for investing in real estate assets, oriented towards distributing dividends obtained from rentals, wants to acquire an office building in Bucharest, for the amount of 19 million euros, according to a report by the issuer published yesterday on the website of the Bucharest Stock Exchange (BVB).

The company signed a letter of intent regarding the acquisition of the property, which has a total built area of 13,755 square meters, of which 9,500 square meters is rentable area, the building being structured on two basement levels, ground floor and five upper floors, with a footprint of 1,218 square meters. The property, located on Polonă Street, benefits from 136 parking spaces in the basement and another 60 parking spaces rented on a neighboring plot.

According to the BVB report, the estimated return on investment is 11% per year.

In addition to this transaction, the company owns in its portfolio a plot of land with an area of 25,000 square meters in Bucharest, a commercial space with an area of 1,400 square meters in the center of Cluj, as well as apartments and parking spaces in Bucharest.

"The letter of intent presents certain suspensive clauses and the company will continue to inform shareholders about the significant progress related to this acquisition and other relevant investments. In line with the growth strategy, the company intends to continue the acquisition of income-generating properties, with the aim of consolidating a stable and performing portfolio. The financing of these acquisitions will be carried out through capital increases and attracting bank loans or other forms of financing," the BVB report states.

Last summer, the company announced that it was in the process of liquidating its assets, as it does not record income from the rental of the properties it owns. In September 2023, RCTI Company unilaterally terminated the rental agreement for the 14 apartments and 26 parking spaces in the Star Residence Invest assets.

In June of this year, the company announced the conclusion of transactions for the sale of two apartments and four parking spaces, for the total price of 0.45 million euros, VAT included. "We will continue the steps to capitalize on the real estate assets owned, seeking to identify the best solutions in this regard," the issuer's report at the time stated.

The company has the stock symbol REIT, although in our country there is still no law regulating Real Estate Investment Trust entities. REITs are companies that own, operate or finance income-generating properties in various real estate sectors. They allow investors to obtain income from real estate without having to buy, manage or finance the properties directly.

For the first three months of this year, Star Residence Invest reported total revenues of one million lei, well above those in the same period last year and a loss of 0.15 million lei, higher than that in the January-March 2024 period, of 0.18 lei. In mid-2024, Momentum Capital from Bucharest owned 35.7% of the company, while Ion-Gheorghe Manea had almost 20% of Star Residence Invest, a company with a stock market valuation of almost 14 million lei.