August 9 (SeeNews) - Real estate agency RE/MAX Romania said on Wednesday it has put up for sale a landmark building in the western city of Arad, Palatul Copiilor, for a starting price of 2.5 million euro ($2.95 million).
The transaction is expected to close in about two years, RE/MAX said in a press release.
"We expect potential buyers to come from large-scale private investors who want average rent yields of 7%-8% a year. We also take into account private clients active in education, health, financial, banking or hotel services. Another option, less likely however, is that of public institutions," RE/MAX Romania broker Beatrice Cioflica said.
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The property, a former children's culture house dating back to the Communist era, would be most suitable for a hotel and/ or restaurant, learning center, dwelling or office space, Cioflica added.
The building is located on a land plot of 2,495 sqm and has a usable area of 2,220 sq m consisting of 37 rooms.
Although at present it is in good condition, the building will require investment in modernisation depending on the degree of conversion, the property agency said. For example, if it is to be turned into a hotel, the cost of revamping it could range from 500 to 600 euro per built sq m, while if it is going to be turned into an office, the price per sq m will be between 200 and 250 euro.
"Although we are talking about a niche, the premium property market has been on the rise for several years, especially due to the large number of property restitution. It was also one of the segments least affected by the real estate crisis, with constant prices ," RE/MAX Romania president Razvan Cuc said.
RE/MAX was founded in 1973 in Denver and is present in 100 countries with over 7,000 offices and 100,000 agents.
In Romania, RE/MAX currently has 17 offices in eleven cities and 170 real estate agents.
In 2016, the agency has brokered 1,000 real estate transactions in Romania worth 100 million euro, up 130% on the year. RE/MAX Romania aims to reach 25 offices, 250 real estate agents and a turnover of 2.5 million euro in 2017, up 67% on the year.
($ = 0.8468 euro)