The Romanian real estate market is much more prepared to absorb the shocks of a crisis then it was in 2008 as the demand is sustainable, Mihai Zaharia, director of Investments and Capital Markets at Globalworth, said at BR’s Foreign Investors Summit.
“I think it is more important not to try to guess when the crisis arrives, but to be prepared for it any time. Now the structure of the Romanian market is much more prepared to absorb the shocks of a crisis,” Zaharia indicates.
He points out that the rent level is 10-20 percent below the pre-crisis level and the demand is much more sustainable in the long run.
“The quality of the players in the market is better – they are more experienced and more cautious,” Zaharia said.
Globalworth director underlined the importance of infrastructure in real estate developments.
“Infrastructure is needed to create such a pole like Orhideea. If it was not the Basarab bridge, is there such a pole? (…) The idea of creating a pole linked to infrastructure is the healthiest in the long run,” he said.
According to Globalworth manager, there would be three major directions in the Romanian real estate market: creating communities, implementing technology and coworking.
“At this time, in our real estate portfolio 100,000 people enter every day. We want to create a community, an identity. We promote young artists through technology. Employees of our tenants can admire this through technology,” Zaharia said.
“This community will give value to our entire portfolio. It means creating a space for the community to communicate. We will sell places in a community,” he added.
In the same panel, Antoniu Panait managing director at VASTINT Romania, said that Bucharest has evolved a lot during the last decade.
“The city is very unbalanced because at the beginning the management of the companies was made up of expats and wanted to be located near the airport. Now the HR departments have a bigger role, they have a role in the location decision. People want to work close to home. A trip longer than 30 minutes to the office reduces productivity,” he indicates.
The Romanians employees have also evolved, according to VASTINT manager.
“If a few years ago, employees were working anywhere, now employers run after employees. The city is balancing now. The Orhideea area has grown very fast in recent years. More than 100,000 square meters in a few years. Bucharest is evolving and there is place for big developers,” Panait said.
Vlad Tanase, partner NNDKP Real Estate practice, spoked about the problems in the real estate market.
“The problem in Romania compared to other countries is that you never know if your PUZ (local urban plan) is approved. As an investor, if you just read the PUG (general urban plan) or the PUZ, you would do nothing. You must always make proposals for PUZ changes,” he said.
“It’s hard to buy land if you do not know if urbanistic coefficients will be approved. It’s even more difficult to obtain approval for a project than it was before,” Tanase added.
Catalin Gavrila, head of Land Development at Crosspoint Real Estate, commented on how Bucharest has evolved in unexpected ways. “It was difficult 10 years ago to see how the center-west area of Bucharest will evolve,” he explained.