Speculative investors look outside the city, study finds

The increasing number of residential developments and the demand for industrial and logistic spaces has generated a shift in developers' attention from the central and secondary areas of Bucharest to the periphery and neighbouring counties, such as Ilfov.
The study found that 110 hectares of agriculture plots surrounding Bucharest and 490 hectares of agriculture plot in Ilfov county were transformed into construction sites in 2006. According to the Romanian National Institute of Statistics, local agricultural plots stood at 5,400 hectares in 2000 but six years later such land occupied at most 4,400 hectares.
Last year saw several important land transactions involving foreign investors from Israel, Spain, Greece, Ireland, Great Britain and Austria. Raiffeisen Evolution, for example, acquired 11 hectares for EUR 90 million in northern Bucharest in 2007, where it is developing the EUR 250 million mixed project Floreasca City. The same year, developers such as AFi Europe, Real4you and Spanish company IUE Leader paid sums ranging from EUR 30 to 77 million for plots located in the eastern and western corners of Bucharest to develop projects on former industrial platforms.
Speculative investors targeting land are looking mainly at locations with ongoing residential developments and also the neighbouring areas of the main highways. According to the studies on the market, Western Bucharest is likely to develop as the second most productive residential area after northern Bucharest, while eastern Bucharest has seen a boost in the demand for small and medium-seized industrial spaces and warehouses.

Magda Purice