Federal Development, an international real estate development and asset management company, and Bulgaria's Petrol Holding, the second largest oil products wholesaler in the country, said on February 19 2008 they agreed to create a joint venture that would focus on developing mixed-use real estate opportunities in Bulgaria.
Initial plans focused on converting and redeveloping approximately 50 sites, owned by different entities within the Petrol Holding group of companies, including Petrol AD, Naftex Petrol and Evrocapital Bulgaria, which manages its real estate assets. These sites will be converted from oil servicing facilities to mixed-use developments that will likely include office, retail, and residential components.
Financial analysis showed that total investment in the projected developments would exceed 3 billion US dollars over the next 10 years. The joint venture would be called Federal Bulgaria Management and would also pursue opportunities to partner with public entities to develop sites that would enhance the quality of life for local residents, the companies said in a joint statement.
“We are excited to be entering the Bulgarian market with Petrol Holding by our side,” John Infantino, chief executive officer of Federal said. “This collaboration will ensure financially strategic market plans and a creative, talented team that shares a vision to develop world-class, vibrant communities for people to live, work and play.”
“Federal’s extensive experience structuring public/private partnerships to maximize the value of underutilized publicly-owned properties will be a real benefit for Bulgaria and its citizens as we integrate into the European Union,” Mitko Sabev, chairman of Petrol Holding said.
“The partnership with Federal allows us to capitalize on the underutilised real estate assets in our balance sheet. Although the restructuring of Petrol AD, our largest subsidiary, is not yet complete, we already see the benefits of the process of disposing of the non-core assets. We shall further continue this process in Petrol AD and its subsidiaries to the benefit of its stakeholders”, Orlin Todorov, CEO of Petrol Holding, added.
Federal Development LLC has an international property development portfolio totaling more than 7 billion US dollars.