Romanian real estate developer Qualis Properties, under a pre-insolvency procedure since November, announced on January 21 that it would not be able to pay the last coupon and the principal for the 9%, EUR 2.1 million bond (BVB: QUAL24E) issued in 2021.
The developer, active in the residential segment of the real estate market of Brasov, central Romania, invoked the market circumstances for its financial problems.
“The company claims that the real estate market in our country is facing a major crisis due to the increase in the prices of construction materials and the increase in VAT on housing,” according to the company’s note to bondholders, quoted by Economica.net.
In the first half of 2023, Qualis reported a turnover of RON 3.61 million (EUR 0.7 million), down by almost 85% compared to the same period in 2022. The company did not sell any apartments in H1, 2023, and the turnover was generated by the rental income it gets from renting industrial halls or from other real estate management services.
The company assures bondholders that it is taking steps to cash non-core assets and make the due payments as soon as possible.
At the time it issued the bond in 2021, Qualis was in the process of purchasing (pre-contract phase – 75% advance paid) a plot of land with an area of approximately 30,000 sqm in Brasov’s Civic Center area to develop a housing complex for customers with above-average incomes. The project’s market value was estimated at over EUR 60 million.
At the same time, the company’s strategy was to expand the activity in the area of individual houses in the metropolitan area of Brasov, covering the need of residents for larger homes with yards and modern facilities.
The company also targeted the industrial sector, in this sense acquiring in July 2020 land of 39,150 sqm in the urban area of Brasov, Triaj neighbourhood, where it was intending to develop warehouses of approximately 20,000 sqm for rental, in stages, depending on demand.
iulian@romania-insider.com
(Photo source: Facebook/Qualis Brasov)
