Real estate project gets tourist twist

A young and inexperienced entrepreneur who decides to set up his own business gains management experience in time, step by step. As he matures, he needs to learn the difference between a manager and an entrepreneur. But when you have plenty of management knowledge and start a business from scratch, the chances of succeeding are much higher. Plus, you know how to react in times of crisis. Ion Turcu, the developer of the residential compound Stupinii Noi in Brasov, is one of the businesspeople who have worked out how to turn the current crisis to their own advantage. His first foray into the business world took place back in 1991. Since then, he has run many businesses from different fields such as food, tourism and plastics. Nesland Brasov (specialized in the distribution and sale of food industry equipment), Camro (tourism and hiring self-locations), Moulding Painting (small plastic mouldings for export), Agrovit (vinegar producer but with leasing as its main activity at present) and Bressan (real estate activities) are among the companies in which Turcu is currently involved as shareholder or business partner. How did the residential compound building take shape? “As a result of a great cooperation with one of my Italian business partners, who is experienced in real estate, we decided to start building a residential compound in Brasov,” remembers Turcu. He adds that the decision to get involved in the business was not a difficult one, due to his ongoing experience in the construction industry. “Since I started out in business I have been involved in building and setting up different locations for my own businesses, including the Nesland office building and Vila Daria, which we own in Poiana Brasov,” says Turcu. It's obvious that the financial support offered by the Italian business partner in this project has been one of the most important elements in running the Stupinii Noi project. Starting to build the residential compound did not require a visionary approach, Turcu says. Like many other Romanian businesspeople involved in real estate projects in recent years, the entrepreneur decided to invest in a residential compound building because of the higher yields, lack of both new and old available homes and the mirage of future real estate market development. But personal factors were also at play. “I think that the most powerful thought behind the idea was to have my own house in a residential compound too,” says Turcu. The dream came true: the businessman also built a house for his family, into which they will move in the near future. The 51-villa project was developed with a EUR 9.5 million investment. It is no secret that the Romanian real estate segment has been badly hit by the crisis. Real estate transactions have simply frozen due to the combined earnings of the population shrinking, tighter lending conditions and job insecurity. As a consequence, just 15 villas at Stupinii Noi have been sold so far. But rather than throw in the towel, Turcu has torn up the old plan and gone back to the drawing board. He has included the 36 remaining houses in a tourist circuit of Brasov County, as part of a residential tourism project. “We did this to vault the crisis and to rake in some money when nothing is selling. Besides, we had noticed increased demand for renting holiday homes,” adds Turcu. The businessman expects 100 percent occupancy for his 36 villas over the winter and up to 50 percent for the rest of the year. “Judging by the current local economic situation, it likely that we will recoup the investment 10 years from now,” says Turcu. The residential tourism project targets families with children or pets who are seeking self-catering holiday accommodation. The cost per night depends on the available space in each house, ranging from EUR 90 for a 150-sqm villa to EUR 140 for a 215-sqm place. As for the most difficult moment since the beginning of the project, Turcu says that the frozen real estate market combined with increased costs of borrowing made him realize that he had to find a way out of the woods. However, he says there is no place for regret in his business – and there never will be. “It's much worse not to come to a decision rather than make the wrong one. It could cost you much more.” If he started another business from scratch, he would probably be more cautious and tenacious. On top of that, he would try to whittle away everything he couldn't anticipate from the very beginning. As for the future, Turcu intends to extend the residential tourism concept nationwide, targeting other cities. “The real estate segment is not an investment opportunity, at least for the moment. But I expect things to be better in the next two years,” predicts Turcu.