Luxury nesters pump in the cash

Newsroom 16/06/2008 | 15:50

“A good bargain is sold in less than a week. Many of these properties don't even get on the market and sell even if the owner didn't have a clear intention to sell. They may receive an offer from an investor and accept it. If the price is higher, it may take six months or even one year to sell. But in this case one bets on an offer which is unique and waits for the right buyer,” says Simona Costache, general manager of real estate agency Perfect Casa.
The current offer for luxury villas is bigger than in previous years. Perfect Casa alone has 30 such villas on sale in its portfolio, with price tags between EUR 2 and 10 million each.
Many of these villas on sale used to be the property of the state during the communist period, but were returned to their original owners or their beneficiaries after Law 112 in 1995 governed the process.
The new owners were not allowed to sell for ten years, and for many the ten-year period has ended, which would explain the higher number of such villas on sale, says Costache. Those who bought villas as investments have seen prices increase enough to allow them to get healthy profit margins.
“The difference between the price I paid for the villa in 2004 and the price for which I am selling it now is very big. However, I have invested consistently in renovating it in the meantime,” Julia Kristensen, the owner of a 530-sqm villa close to Victoriei Square tells Business Review. Kristensen, who owns the Scabal fashion retail business in Romania, bought the villa, which was built at the beginning of the last century and renovated it, but initially she was not planning to sell it. On its ground floor she has opened a showroom for the fashion business, but needed to sell the villa as she had bought another one which required a higher investment: EUR 5 million. She is now working on the renovation of the new villa, which is located in the Lascar Catargiu area.
“The renovation can cost up to EUR 300,000 and it can take up to one year,” says Kristensen remembering the renovation works for the 11-roomed villa she has now put up for sale for EUR 2.8 million. She is planning to move the Scabal showroom to the newly acquired villa. She doesn't trust local architects for such a renovation so she hired an Italian architect. She has also chosen to use imported construction materials.
The prices of such villas may seem too high to attract any buyers or to be sold at the asking price. Transactions, however, are sealed. Costache of Perfect Casa remembers the recent EUR 5 million transaction of the villa which will host the fashion brands showroom. The strong points of the 900-sqm villa, which was built on a 450-sqm plot, were its downtown location, its architecture and its perfect state, says Costache.
Kristensen initially bought the first villa in order to live in it. “I was planning to move the showroom to another location and start living there. I also have a property in Snagov, but it is too far and the villa seemed perfect for a townhouse,” she said.
Buying and selling properties is not her trade, she says, but it just happened that she sold one and bought another. “I would rather buy a property and renovate it than rent the space I need,” says Kristensen.
But there are others who don't share this opinion and so once acquired, such properties can provide good sources of monthly revenues, as they can be rented for as much as EUR 12,000 per month. A 700-sqm villa in the Kisellef area, on sale for EUR 4 million, can be rented out for EUR 12,000, according to data from Perfect Casa.
The price of such a villa can hardly be compared to the price of another similar villa, as these properties are unique, say realtors. The price reflects the architectural value, its structure, how the property looks, whether it needs renovation or consolidation, is part of the cultural patrimony, or if the owners of the villa also own the land.
Owner Lyudmila Shumilov built her 590-sqm villa in the Domenii area of Bucharest in 1996. She hasn't calculated the exact amount invested in the construction, but, she says, she used imported construction materials and furnishings, and the design and technologies were new at the time of construction, so the investment was pretty high. Shumilov, who sold one of her interior design business, Alma Interior, but kept Fresco Interior, is selling her villa for EUR 2.1 million because she is planning to move to London.
The price tag for the four-floor villa came after an evaluation by the bank, which granted her a small loan, she says. The money she will get for the villa in Bucharest will partially finance her new house in London, says Shumilov, who is planning to start a new interior design business in UK, while also keeping her Fresco Design business in Romania.
While old villas can be priced as high as EUR 11 million, which is the asking price of a 900 sqm villa in Dorobanti, new ones have prices ranging between EUR 650,000 and 4.35 million, according to a survey recently released by real estate agency Regatta. The most expensive of the properties listed is located in the Baneasa area. It has a 1,200-sqm built area and various facilities on the 4,000-sqm land plot. The least expensive is a 400 sqm villa, also in Baneasa. Old villas can be found mostly in downtown Bucharest, while newer ones are usually in the north of the city.

By Corina Saceanu

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