Residential deliveries dominate 2008 openings in Bucharest

Almost 40 residential projects to be finished this year will deliver around 7,500 homes in Bucharest. The capital will also see three new malls opening by the end of the year. A smaller number of projects, almost by half, but overall a similar number of new apartments will be delivered in 2009 in the capital, according to developers' announcements. The expected correction on the residential market could however lower the pace of deliveries after 2009, experts believe, as most of the developers have divided projects into phases, to be completed based upon market demand.
Several residential projects will be fully delivered this year in Bucharest, while in the case of bigger projects, of over 1,000 apartments, only the first phases will be completed.
In 2008, the rest of the country will mainly see retail openings, with 19 mall and retail park projects scheduled for delivery in 12 cities. The retail deliveries this year have been fueled by around EUR 1.3 billion investments from 13 developers and investors. In 2009, retail delivery in the country will continue at a similar pace, with malls opening in new cities, or units added in cities where the competition is already high. Chains of commercial centers will also start to take shape.
Most of the residential projects scheduled for delivery in Bucharest will be completed in the second part of the year, while only around 1,600 housing units will be finished in the first half of the year. Some of the projects scheduled for delivery in late 2008 might however see delays due to the shortage of construction workers, a problem which has already delayed projects set for delivery at the end of last year.
The bulk of the apartments and villas which will be delivered in Bucharest this year have already sold out, and in view of the upcoming end of works, current owners who were buying new apartments for their investment potential have already put the apartments up for sale.
The wave of sellers will increase once the rest of the projects approach completion, and the transactions will reveal the actual ratio between end-users and investors among the residential buyers for new projects. The moment will also mean the beginning of an exit period for the investment funds which have bought into these projects.
The biggest residential delivery of this year will be Edenia compound in eastern Bucharest, which will bring 800 new apartments on the market. The compound will be finished in the third quarter of the year, according to previous announcements. Anchor Group's InCity Residences, to feature 500 apartments, is scheduled for delivery in the first half of the year. Orhideea Gardens, a 400-apartment project from Trend Imobiliar, will be ready around September, according to the latest data on the market.
The first mall to be opened this year in Bucharest will be Baneasa Shopping City, which will bring 85,000 sqm of retail space, which represents half of the existing modern retail stock in the capital city. Sun Plaza and Liberty Center, both scheduled to be ready during this year, will add almost 100,000 sqm of retail space, and thus the Bucharest stock will double.
The first mall opening this year in the capital is also the first such opening in the last three years. Since 2005, when City Mall was opened, only four malls have been present on this market segment. The 2008 on-time delivery for Bucharest malls will allow developers to enjoy a relatively calm period, before the expected retail oversupply hits the city. At least four new malls will be delivered in Bucharest in 2009, among them the long awaited Dambovita Center.
Office project delivery in 2008 is expected to bring up to 400,000 sqm of additional space, taking the total Bucharest supply to 1 million sqm. Around 40 percent of the expected office buildings this year will be located in the Pipera area.
While in Bucharest residential makes up the bulk of deliveries this year, secondary cities in the country will see completed several commercial centers. Suceava and Constanta will each have three retail openings this year. While Constanta already has malls up and running, Suceava lacks such developments. Developers GTC, Iulius Group and Priceton will thus compete for the first mall opening in the city. Meanwhile, Braila, Focsani and Arad will each have two modern commercial centers by the end of 2008.

By Corina Saceanu