Imobil Invest

Imobil Invest Blog: Luxury Downtown Apartments Chisinau, Moldova

Please be informed that on July 1, the Public Property Agency announced competition for three 100% stakes of State companies and eight Real Estate/production properties.

Among them are concrete production facility, pharmaceutical production and distribution enterprises, buildings downtown and in good areas of Chisinau, a restaurant, a distillery, etc.

The deadline for document submission is July 28, 2008.

Please contact us for further information, detailed listing and competition participation.

Information is provided by the Ministry of Economy of Moldova.

Thermal Plants put up for sale

July 3 2008

Three Thermal Plants – two from Chisinau and one from Balti in which the state has a 100% stake — will be included on the privatization list, as the Government endorsed the respective legislative initiatives on June 2, Info - Prim Neo reports

Setting these plants for privatization is part of the Energy Strategy providing for increasing the local capacities of generating power. Now Moldova produces locally only 1/3 of the power it needs, depending on external sources, especially Ukraine. Officials regret the plants’ equipment is worn out, the investments needed are big, as the Government does not have the money. Moreover: it takes a relatively long time to recuperate the investments in this sector – some 10-15 years. On the other hand, modernizing their equipment could better the consumption of the natural gas important to produce electricity, they say.

Officials say investors from Spain, the Czech Republic and Russia are inclined to buy the plants.

The legislative initiative also provides for privatizing the state-run company Air Moldova, the Parliament’s Cafe and Codru hotel.

Under the law, the list of the public assets to be privatized is made up by the Government.

On Wednesday,July 2 , the Economy Ministry announced the next auctions round selling state stakes in companies for September 22 on the Moldova Stock Exchange. The state puts up for sale SA “Tutun – CTC”, state’s stake 90.81%, starting price 300 million lei; SA “Magazinul Universal Central “Unic”, state’s stake – 82.29 %, starting price – 300 million lei; SA “Sigma”, state stake – 71.67%”, starting price – 35 million lei; SA “Zorile”, state stake – 60.26%, starting price – 44 million lei; SA “Micron”, state stake – 72.11%, starting price – 13 million lei; SA “Floare - Carpet”, state’s stake – 59.49%, starting price – 72.5 million lei; SA “Introscop”, the state’s stake in which is 60.17% and the starting price of the assets being established at 32 million lei.

Info-Prim Neo

P.S. By information provided by the Ministry of Economy, additional information and details on present privatization round conditions, timing, etc. can be obtained after July 7, 2008.
Please email us or call at +373 22 270075, +373 69 101359 for details and possibilities of participation in this privatization round.

Investment in Real Estate in Moldova was popular for a number of years. Due to high rate of growth in property market and attractive rental potentials, many small investors prefer to invest their savings into apartments in the capital of the country - relatively liquid asset with the capacity of bringing continuous revenue.

As the trust to banking system was blown away with a number of bankruptcies of some financial institutions, and large scale fraudulent schemes during and after the collapse of the USSR, real estate became the niche for personal investment.

During 2001-2008 apartment prices in the capital went up 7-10 times. At the same time average rental potential changes 3-5 times.

Moscow properties are among the most expensive, and the average rental potential is estimated at 5.18% per year in 2007. In most of Eastern European countries, rental yields do not go over 6.5%, according to Property Secrets.

Chisinau, with much lesser prices still provide an average of 7-12% per year rental potential, added by a moderate (10-15%) price growth per year.