Retail remains the growth engine of the local real estate market

Newsroom 02/04/2012 | 10:50

Oana Iliescu, managing director of DTZ Echinox, talked to BR about the growth perspective of the local real estate industry this year and whether any new investors are expected to enter the market.

 

How attractive is the Romanian real estate market to new investors from a regional perspective?

The signals we’re getting lead us to believe that on the short and medium term, at least, we shouldn’t expect new players to enter the market. The unstable business environment and the challenges investors face in their countries of origin and on most European markets where they have operations continue to keep many of them away from Romania. The market remains volatile and the transactions that are being closed are mainly atypical.

What do you think will be the most attractive real estate segments this year?

We believe that retail will remain one of the most attractive segments of the market this year, despite the significant reduction in deliveries of new shopping centers. Hypermarket and DIY retailers continue to expand and will generate new transactions and new real estate developments. Given the lack of new projects, the need to expand will drive the other retailers to turn to street spaces – such as Bucharest’s old center which has so far been dominated by restaurants and cafes – and to existing shopping centers which will undergo reorganization and repositioning in order to accommodate this demand.

What turnover did DTZ Echinox report last year and where do you see growth coming from this year?

The revenues reported by DTZ Echinox last year amount to approximately EUR 3 million, up 10 percent y-o-y. About half of this comes from the retail segment where we are the exclusive or co-exclusive representatives of ten shopping centers, totaling more than 400,000 sqm. We also manage four shopping centers that together cover 163,500 sqm. In 2011 we closed transactions involving 40,000 leasable sqm.

Since the market plummeted in 2009 we have managed to adapt and reach a stable cost structure which has ensured us profit in the past three years. Between 2009 and 2011 we reported a turnover increase of about 10 percent each year and for 2012 we estimate a similar growth pace.

simona.bazavan@business-review.ro

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