Investitors are diverting their focus from real estate
Publish date: 18-08-2008Uncertainty on the residential real estate market, a situation which has led to a drop in apartment buyers, is leading to a change in strategy of companies involved in this area, both specialized and occasional investors. Some investors have withdrawn, cancelled or postponed projects. In the pats six months, prices on this segment have dropped 10 percent for older apartments, while new apartments stagnated, compared to the past few years, which witnessed spectacular growth, of some 30 percent annually.
In this new light, developers such as Sonae Sierra, one of the major players on the Portuguese market, and Energoconstructia, one of Romania's largest construction companies, have abandoned local Real estate projects..
"We decided to abandon the project which we intended to build on land we own in the Berceni area, because the real estate market is confusing at the moment, and fluctuations are significant on this market. We are already negotiating with an investor to sell a piece of land of some seven hectares in the Progres area, and are asking €500 per square meter, without VAT," according to a statement for Business Standard by Constantin Tabacaru, the company's Technical Manager. The company stands to make some €35 million from this transaction. At the beginning of this year, representatives of Energoconstructia had announced they would begin construction of 15 four to eleven-floor buildings, with some 3,000 apartments, on a piece of land of 67,000 square meters, in an investment worth some €100 mln. This has now been cancelled.
Business Standard
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