WDP’s Acquisition of Romanian Logistics Parks

Popovici Nitu Stoica & Asociatii advised WDP, a Belgian developer and owner of logistics centres and warehousing, on the acquisition of the Aquila Logistics Centre in Cluj from ​SNS Logistic Investment, the Craiova Logistics Centre in Dolj from Tamo-Ko Development SRL, and the Dunca Logistics Centre in Timis from Dunca Imobiliare.

Interview with the Legal Advisers to Tamo-Ko Development: Schwartz & Asociatii

How long have you been working with Tamo–Ko Development and how did you advise them in this acquisition?

We have been working with Tamo-Ko Development for almost six years and this year we have developed together the third largest scale logistic project that totals a deal of approximately EUR 33.5 million. The logistic projects that we have developed with Tamo-Ko Development are built in three different strategic regions of the country, namely in Cluj County, Dolj County and Timis County. All of these projects were designated to the most important logistics players in Romania and now they are all owned by WDP with different tenants; the greater of the projects is currently leased by Profi Rom Food, who is also our client. Therefore, we supported the creation of a successful long-term investment partnership. Our support and legal advice took many forms and it had begun with Profi Rom Food’s warehouse logistical needs. Therefore, we facilitated together Tamo-Ko Development as one of the most dynamic developers on the profile market and from our first project to the latest, it has proven to be a fulfilling success. Our advice started with the whole package, including: land acquisition, urbanistic developing and selling implies, owners negotiations, due diligence reports, concluding Pre SPAs, SPAs, support on the urbanistic plan’s development, FIDIC Conditions for building works and, finally, the transaction with WDP. On these particular projects, we practically created a strategy development that covers tripartite interest – the tenant – Profi Rom Food, the developer – Tamo-Ko Development and the beneficiary – WDP.

This time things are different from the past crisis (the burst of the dot-com bubble in 2000-2002 and the Great Recession of 2007-2009); the impact of the pandemic is not just on the financial system generally, the valuation of sellers and the appetite of buyers to get deals done in the short term, but on a multitude of other factors affecting M&A deals.

Did you and the team face any challenges? If so, how did you work through them?

Of course, we always face challenges, as these are part of our job which occur at different stages. During these projects, we encountered a lot of challenges, from the most common that starts with the landowners, who, in most of the cases, are natural persons, to challenges that involve the development process and handles legal relations with the authorities. In any business, timely completion is the biggest challenge since it involves time-consuming and resource-intensive tasks. We are very flexible, we ensure we are efficient and when we encounter problems, we make prompt decisions, finding the ultimate legal solution in order to maintain our goal fitted on the agreed time frames.

What are your first priorities when first instructed on an acquisition like this?

My first priority is to ensure that any acquisition is concluded in a very safe, legal frame for our clients. I always focus on raising standards in the real estate field and I am confident that with most of our clients including, of course, Tamo-Ko Development, we succeed.

Does this acquisition reflect the current market during the pandemic?

The latest transaction started last year with the land acquisition. It is hard to describe the market during this pandemic since we are still in the crisis, but there are high profile examples of both, corresponding economic downturn, a time to halt acquisitions or, in some cases, pursue them. There are big companies on the market, which have all publicly stated that they are open to acquisitions despite the uncertainty created by coronavirus.

What is the current M&A market like in Romania? How do you expect this to carry on into 2021?

This time things are different from the past crisis (the burst of the dot-com bubble in 2000-2002 and the Great Recession of 2007-2009); the impact of the pandemic is not just on the financial system generally, the valuation of sellers and the appetite of buyers to get deals done in the short term, but on a multitude of other factors affecting M&A deals.

These include deal terms themselves, new due diligence issues that have arisen, the manner in which due diligence is conducted, the availability, pricing and other terms of deal financing, and the time it will take to obtain necessary regulatory and other third-party approvals for transactions.

I am on the optimistic side, part of that 60% on the market who believe that with some efforts, despite the ongoing economic uncertainty from the pandemic, many private equity professionals are looking to alternative merger and acquisition methods to navigate the crisis and pursue new disruptive business growth strategies.

I have learnt that we need to adjust ourselves to any changes, to accept the diversity, to be more united and to use our sensitivity and sensibility in order to move the wheels of this world, which proves itself to be so frail.

How has the M&A market been in 2020 in your jurisdiction? What challenges have you faced throughout the year and what lessons were learnt?

The impact of the continued spread of COVID-19 on the operations of a target company will need to be considered by both the seller and the buyer in the due diligence process.

There were a lot of challenges during this year, however, we finalised two projects that totalise EUR 67 million and we continue with acquisitions on another important project totalling EUR 13 million.

Pursuant to quarantine measures adopted in our country, we encountered many difficulties in executing documents or carrying out procedures before certain authorities, which delayed our timing of transactions. Nevertheless, with additional efforts, we managed to fulfil our obligations at the border of the deadlines.

I have learnt that we need to adjust ourselves to any changes, to accept the diversity, to be more united and to use our sensitivity and sensibility in order to move the wheels of this world, which proves itself to be so frail.

About the Firm

Schwartz & Associates is a law firm established in Timisoara, Timis County in 2010, by the co-founders who are the same associates since formation: Cristina Schwartz and Andrada Popescu. We have a solid background in matters of real estate, mergers, acquisitions, partnerships, insolvency and restructuring.

About Andrada Popescu

I am a member of Timis Bar Association from 2005. I have a broad legal background in corporate, commercial, labour, fiscal, customs law, negotiating/drafting contracts/leasing, large commercial transactions, litigation and arbitration management. I am an experienced and skilled real estate lawyer with an excellent professional reputation in handling a variety of complex transactional matters in reputed property firms.