Dragos Paval, owner of Romania’s biggest DIY retailer Dedeman, is reportedly close to signing an agreement with Africa Israel Investments for the acquisition of an office building project in Bucharest, in a transaction estimated at €164mn, Ziarul Financiar reported on May 23 quoting unnamed market sources. If it goes ahead, the deal will be the largest ever in the Romanian office segment, and the only deal over €100mn in the local office real estate market in recent years.

Africa Israel Investments, controlled by Israeli investor Lev Leviev, signed a non-binding agreement to sell the AFI Park office buildings in November last year, but the identity of the buyer was not been revealed. Paval’s possible acquisition would mark the entrance of a new important player on the office market, which is currently dominated by foreign companies.

AFI Park office buildings are linked to AFI Palace Cotroceni shopping mall, forming the biggest retail and business complex in Romania and one of the biggest in CEE. Each of the five buildings has 10 above ground office floors and two underground floors with 2,500 dedicated parking places.

The transaction comes at a time when the Romanian real estate market is recovering. The volume of office space delivered last year in Romania tripled compared to the previous year to 280,000 square metres, an analysis by ESOP Consulting quoted by local media earlier this year. The figure equals the combined volume of office space delivered between 2013 and 2015 and confirms the revival of the real estate market. Demand for office space increased last year supported by the robust economic growth and the expansion of some companies in the country.

Dedeman, controlled by Paval brothers, is the only company owned by Romanians to exceed the €1bn threshold in turnover. Last year, Dedeman's turnover increased by more than 20% to RON5.25bn. This year, Dedeman estimates its turnover will go up by 7%.