Price of land on the rise, agricultural land targeted for investments

“We have intermediated the sale of 40,000 sqm of land in Dascalu, northeast Bucharest, last year at EUR 4 per sqm. The plot was sold this year for EUR 12 per sqm, which means a 300 percent price increase,” said Lazar. Up to 80 percent of the transactions intermediated by Neoland were made for investment purposes, and only 20 percent for the immediate use of land. Those who buy land for investment purposes may choose to resell after the price has gone up or start building on a portion of the land and sell the remainder of the plot in order to finance the development, said Angelo Ciuca, executive manager of Neoland Invest. The investment in agricultural land may pay off in 10 to 15 years, but the process may also be eased by many localities' decision to co-opt agricultural land for local infrastructure. “This is the case in Corbeanca, Voluntari, Domnesti, Frumusani, and shortly for Balotesti,” according to Neoland representatives. The number of transactions with land close to Bucharest has increased due to the high profits offered by this types of transactions in the recent years, says Monica Marin, managing partner with EuroMetropola. The company has intermediated EUR 50 million in land transactions in 2006 and 2007 and posted EUR 500,000 in turnover last year. It plans to increase the value of intermediated land transactions to EUR 100 million in 2008 and to EUR 200 million in 2009, with the turnover expected to reach EUR 1 million next year and EUR 2 million in 2009. The company, now present only in Bucharest, is planning to open regional offices in Constanta, Timisoara and Brasov.

Corina Saceanu