Urban regeneration of the Tractorul Braşov site
Flavus was formed to acquire the entire asset base (plant, buildings, land, industrial equipment, brand and intellectual property) of Uzina Tractorul Braşov (UTB, also known as Tractorul), one of Romania’s largest and most important factories in communist times. Located on Braşov, one of Romania’s biggest and most dynamic cities, UTB once employed 20,000 workers and produced 100,000 tractors/year sold across the globe. UTB was the pride of communist Romania.
In 2007, after many years of heavy losses, the Romanian government, who owned UTB, finally decided to put it in liquidation and proceeded to sell the company’s assets in a public auction. Flavus Ltd, managed by Centerra, won the public auction and acquired the assets for €70m. This was major news in Romania, as this public auction was one of the largest privatisations in the country.
For Centerra, the main attraction was the location of the industrial site, in close proximity of the city centre of Braşov. The massive, 120 ha (300 acre) industrial estate was filled with many giant dilapidated halls, buildings and industrial installations. Despite its proximity, the site was completely disconnected from the city centre due to a lack of roads and urban access. It took a lot of imagination to see what this gigantic, grubby and deserted site could become – see pictures below. Centerra envisioned the possibility of converting this large formerly industrial site into a new, clean and modern sprawling urban centre.
Centerra turned this vision into reality. To give the site a new beginning, Centerra renamed the estate Coresi Braşov, commemorating the name of the first editor of books in Romanian language in the 16th century in Braşov. Coresi Braşov became one of the largest urban regeneration projects in Europe, with Centerra drawing inspiration and expert advice from various similar developments in Sweden, Czech Republic, Poland and the UK.
Centerra created value, first, by clearing up uncertainties about the assets. The public auction contained an ambiguous requirement to continue to make tractors on the site, which the government had included to save face and avoid accusations of dis-industrialising the country. In spite of many obstacles and attempts to dissuade it, Centerra decisively clarified – through a procedure at the European Commission, by winning several lawsuits, including starting proceedings against the government at ICSID (International Centre for Settlement of Investment Disputes) in Washington, and through public communications – that such obligation to make tractors did not exist. Lifting this uncertainty took a great deal of resolve and several years of dealing with various chicaneries, but ultimately created massive value in the Tractorul assets and enabled Coresi Braşov to emerge from the ashes of Tractorul.
Early on, Centerra was able to generate significant revenues. It started the urban regeneration by recognising that the area closest to the main site access had potential to become a business centre. So, it refurbished several buildings there to a high standard and attracted high-tech tenants (IBM, Waters, CGS Call Centres, Freudenberg), a bank (Raiffeisen), and a clinic (Fresenius) to form Coresi Business Park where 1500 people went to work.
At the same time, Centerra undertook a large-scale demolition project on the rest of the site, aiming to reuse and monetise every possible material, selling obsolete machinery and installations, extracting steel, copper and other metals, and by crushing concrete into aggregates used in road construction. Centerra reinjected the revenues thus generated into development as, post demolition, it had to bring the land to an acceptable environmental standard, prepare it and zone it for urban development, and then build the necessary road and utilities infrastructure.
To further anchor the Coresi urban development and entice people to the site, Centerra pre-developed Coresi Shopping, a large shopping centre at the other end of the site from Coresi Business Park. It attracted international retailers, who pre-let most of the shopping centre, and secured debt financing. Centerra had to stop just short of starting construction of Coresi Shopping due to the investors wishing to exit their investment.
By 2012, Centerra completed the transformation from a grubby, formerly industrial site to a clean, developable land with roads and utilities infrastructure built and dimensioned for a new urban centre. By delivering Coresi Business Park, Coresi Shopping as a large turnkey shopping centre development project, as well as the infrastructure to support further development, Centerra was able to create significant value in the estate. Having completed this work, Centerra negotiated the sale of the site to Immochan (now Ceetrus), property division of Auchan Group, owned by the Mulliez family in France, and who has been continuing its development on Centerra’s blueprint – see pictures.
Today, Coresi Braşov, is part of and deeply connected to the Braşov city centre, occupied by a large and flourishing shopping centre, high rise residential buildings surrounded by green spaces, and with Coresi Business Park being one of the cornerstones of the entire site – see https://coresibrasov.ro/cartier-coresi/ as well as residential developer sites https://korter.ro/coresi-avantgarden-brasov and https://coresi-avantgarden.ro/proiectul-coresi-avantgarden/
Centerra ultimately realised its vision, with thousands of people living, working, shopping and enjoying leisure activities on the former Tractorul estate today.