The EU accession gives confidence to the investors in the Romanian real estatePublish date: 03-01-2007
The Romanian real estate market will continue its evolution in 2007, being considered by investors as the most attractive in the region. The real estate analysts state that Romania will attract an increasing number of projects in which tens or even hundreds of millions of EUR will be invested.
Adama is proud of a project portfolio representing total investment worth more than eur 400 m
The Real Estate development company Adama evolved quite dramatically this year, and has now positioned itself as one of the leading developers on the Romanian market, in particular in the segment of middle-class residential projects, stated, for ‘Nine O’ Clock,’ David Flusberg, the founder and president of Adama. “To date we have a local operation of more than 40 Romanian and international colleagues, and a project portfolio representing total investment value of more than EUR 400 M, including 5,000 residential units in construction and planning in 16 projects. We are extremely happy about this year’s results, and expect an even stronger year in 2007”, added Flusberg.
In 2006, Adama neared completion of 2 projects, began construction on 3 more projects (both of which are experiencing sales results stronger than the company’s projections), and began the final planning and marketing launch of an additional 5 projects. Adama also had great success in expanding their activities outside of Bucharest, making land acquisitions and beginning projects in Ploiesti, Bacau, Iasi and Brasov, and putting business development teams into place in other significant Romanian cities. 2006 was a year in which Adama continued to build its brand on the Romanian market, launching the EVO and European Standards System concepts – and backing its marketing messages with real-world results in Edenia, Evocasa Titanium, and other projects now being executed. In 2007, Adama also began project activities outside of Romania, and they are now present in Moldova and Ukraine.
“We, at Adama, expect 2007 to be an extremely exciting year for Romania, for the Romanian Real Estate market, and for our company’s continued evolution. We will continue to expand our land portfolio, and expect to add several thousand more residential units in planning to our pipeline of future projects in Romania” planned Flusberg. The company also intends to continue to build its team, in particular their sales and engineering-related staff, and is actively looking for ambitious, talented and dynamic individuals who want to build a career Adama, said Flusberg. “As a company with experience in other regional markets, where competition also increased over time, we know that Romania now is just entering the beginning of its development cycle, and we do not anticipate reduced margins for the time being. Just the opposite - we welcome competition as a healthy force for the creation of a true Real Estate market, one in which customers learn to trust the strongest and best developers, and the connection between quality and price becomes more deeply understood by all market players”, concluded Flusberg.
DTZ Echinox’s turnover up by 200 pc in 2006
The turnover of DTZ Echinox real estate services company increased by 200 per cent in 2006, against 2005, reflecting strong growth in all departments, said Tim Wilkinson, the Managing Director of the company, for ‘Nine O’ Clock.’
“We are extremely pleased with the rate of growth of the business year-on-year. Our main achievements for 2006 were advising the purchaser in the largest office investment transaction to date in Bucharest (Sema Park, EUR 90 M), advising HP in the largest office letting transaction in Bucharest to date (15,000 sq m) and the continued success of the letting of Cefin Logistics Park. We valuated over EUR1 billion worth of property” said Wilkinson. Wilkinson expects 2007 to out perform 2006 by some margin. “We do not expect the additional competition to negatively affect turnover due to the strong growth rate of the property market coupled with the expected further consolidation of our position on the market”, he added.
DTZ Echinox real estate services company provides services to investors, occupiers and owners across all sectors of the market. DTZ is a real estate advisory and consultancy firm. More than 10,000 staff advises and act for leading multi-national companies, major financial institutions, governments, developers and investors in 40 countries around the world. With 200 offices in 163 cities, DTZ provides integrated services in corporate consulting, agency, brokerage, valuation, corporate finance, property management and research. In the Americas, DTZ delivers capital markets services and solutions to investors through DTZ Rockwood, and occupational real estate solutions to multi-national corporate through an alliance with The Staubach Company.
Eurisko: the prices of the old flats will not drop after accession
The developers of residential projects must find solutions targeting the medium class, in order to benefit from the great demand in the market, according to a survey of the real estate company Eurisko, which does not believe that the price of the old flats will fall after accession. “The residential market remains the most controversial segment. Numerous residential projects are in progress, and the developers say that the new dwellings are intended for the categories of population with average income. Based on this hypothesis, which does not exactly match the reality, we draw the conclusion that the prices of the old flats will fall starting next year. But we have reserves in this respect. The developers need to find solutions that really target the medium class of the population in order to take advantage of the opportunity offered by the big demand in the market,” stated the Eurisko survey. The company also cautions over the future of the office market, where the degree of non-occupation could increase in the future, if the development of the major projects in progress is not doubled by a general improvement of the business environment in Romania, which would attract more foreign companies or stimulate the setting up of other local companies. In Bucharest there are at this moment one million square meters of offices, and 111,000 firms.
Presently, the stock of office spaces existent in Bucharest is only half of the one which existed in Warsaw in 2003, but both the number of registered companies and the surface of the city are twice smaller. Referring to the market of the industrial spaces, the survey shows that there are development opportunities chiefly outside Bucharest, and the investment yield can be much bigger around the country than in Bucharest. Eurisko also concludes that the retail segment presents the best development perspectives after the accession to the European Union.
Presently, in Bucharest, the real estate investment yield oscillates from 7.7-8 per cent, in the office segment, to 9-10 per cent for the industrial real estate and retail investments. Prior to accession, the real estate investment yield oscillated between 8 and 10 per cent in Budapest, between 8.5 and 10 per cent in Prague, and between 9 and 10 per cent in Warsaw.
“This is a new argument in favour of the fact that the effects of the integration process, be it in the countries from the region or in our country, have reached the uppermost point prior to January 1, 2007.” The real estate company Eurisko is active in the market since 1997, and has now around 60 consultants at national level.
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