BREC Talks

Established in 2010, Ben Adams Architects has quickly developed a reputation for elegant, contextual architecture balancing function with an appropriate degree of innovation and flair.  With offices in London and Los Angeles, the architectural studio has in its portfolio clients such as Nobu Hotel, Derwent London, The Science Museum, Great Portland Estates etc. The company’s founder, Ben Adams, has recently visited Bucharest for un upcoming project and shared with BREC his opinions on the development of the city.

I think the market in Bucharest is maturing as new office buildings, shopping malls and residential projects appear in different parts of the city. What I haven’t seen is the kind of characterful mixed-use buildings that are common in cities like London and Los Angeles. They can be large or small, and the mix of uses is what makes local neighborhoods desirable, interesting and also valuable.

I think Bucharest needs to shout about its growth and the returns that are on offer from what is a low commercial basis. It means you can acquire land at low cost and build projects in phases according to demand. I know that a lot of office space in Bucharest is pre-let before the buildings are begun, or complete, and this suggests that there is a big opportunity for investors in speculative buildings that stand out from the crowd.

Office buildings need to be interesting, creative, non-standard and exciting to be in. For many years the office market was boring and repetitive and then everything changed about ten years ago in London, New York and Los Angeles. Bucharest is still building largely boring buildings and needs to wake up to the demand for better buildings that let at higher rents. There is some evidence of this happening near the Government in Piata Victoriei but it is an exception for the moment.

(31.07.2018)

With an experience of 15 years, ADNBA has established a reputation as a creative designer for residential compounds, being responsible for projects such as Urban Spaces, Occidentului 40, Forte Partners’ Aviatiei Park or Avalon Estate of Prime Kapital. As residential sector is rapidly developing we took the opportunity to question the co-founder of the architectural company, Adrian Untaru about the challenges of this new evolution.

We think there are too few examples of projects developed on long term, projects with mixed functions, much more suitable to a coherent development of the city. We don’t have a strategy for the city’s development. We have many small developers that don’t allow the risk to get out of a pattern and, in this way, we have an excess of similar products, wit no possibility of being differentiated. The demand for new homes is high, whatever there is on the market is being sold and we produce what has been sold.

Yes. There is indeed a bigger involvement of developers in the design stage. Their experiences have probably shown that a project not thoroughly designed has small chances to go well. Also, the increasing competition on the market is probably the single benefit of this intense residential demand.

We do receive those type of requests, but there are more likely exceptions. We have recently been involved in the development of such a project. A design process which took 18 months for an 8-hectare plot. There we had the opportunity to create a community as we envision, with a housing mix specific to a community, where we have individual and in line houses and apartments in low rise buildings, all of those along a service area, a club, a kindergarten, and a park accessible to all residents. We would like to see more approaches of this type and we refer here to a long-term development strategy.

We believe, or better said we hope for a quality increase of the new residential developments. And we do not refer here to a more expensive finishing, which doesn’t necessarily lead to a different way of living. We hope for an education of consumption towards the quality of the living space, towards a building in which we enjoy staying as well as we enjoy looking at it. Homes are, for most of us, the most important investment during lifetime. The way these homes pass the time test directly influences the investment. This can go up or down, according to the overall quality of the entire project. And in the last couple of years we have noticed many examples in both cases, enough to help this economic education we need so badly.
On the other hand, is possible that the new generations to be more mobile and to prefer to rent, instead of buying. In this situation it would be much easier to change a home in a less qualitative project. This process could lead to new opportunities on the market: specialized entities which own and professionally administrate residential assets; a qualified client able to evaluate the sustainability of a new development.

In conclusion: integrated developments, probably of big dimensions, with common facilities which will bring a plus in quality living, responsible developed.

(3.07.2018)

The local branch of worldwide real estate services company Colliers has a history of more than 20 years on the Romanian market, offering a complete range of real estate advisory services. We took the opportunity to conversate with company’s leader about the investment market and new players on this segment.

Investors’ appetite for real estate assets is obviously increasing as compared to last year, with the office sector taking the lead. In the first semester there have been two major deals and we believe other large transactions will follow.
The appeal of the Romanian real estate sector is given by the local vs regional yields differentiator as well as the effervescence of the local business environment, a fact acknowledged by the impressive economic increase (6.9% in 2017, the biggest in European Union).

Romania has been historically a market searched by speculative investors, but we can notice this trend changing. We can see a stronger interest from institutional investors, which look for large buildings and excellent tenants. Of course, an effect of the market’s development is attracting top investors from regions which have not been yet extremely active on the local market (including North America and Asia).

In 2017 we had a reduced number of products at the standards of institutional investors, but beginning with 2018 we have a much larger offer. The most common opinions from them are referring to the predictability of Romania’s economic policies. I believe we need more stability in this regard to attract more institutional investors. In other words, the eternal story of structural reforms still remains on the agenda. The most important ones would be the improvement of the educational system and the development of the terrestrial infrastructure (especially roads and railways), which would significantly progress the perspective of the local economy on a longer term and, implicit, would also create new opportunities for the real estate segment.

(28.06.2018)

Roxana Dudau, Associated Partner heads Noerr’s Real Estate & Construction Department in Romania. She is a well-known & reputable real estate expert on the Romanian market. BREC talked with Roxana about the main factors influencing the local real estate investment market, the quality of the products and the pottential of each sector.

It is clear that the quality of the real estate products developed during the last years in-creased tremendously. All new projects envisage to obtain a green certification, and this is pursued starting with the inception phase. This applies not only for office buildings, but late-ly also for retail and residential products. There is an increased interest in high quality mixed use projects (mostly involving urban regeneration or reconversion of former industrial platforms) as well as for smart city technologies not only in Bucharest but also in regional cities.
The most important piece of advice for investors (especially for larger investments involving urban regeneration) is to conduct a local survey with the aim to involve the local community in the process of creating the concept of the new investment or adapting it to local needs and also to establish a direct communication with the local decision makers/authorities to identify the best means to include the new investment within the larger urban plan of the lo-cality. Big projects often require a strategic approach of extending the existing infrastructure or creating a new one to sustain the new needs resulting from such investments.

I think the office sector shall further expand in 2018. The retail segment will expand as well, but mostly in the regional cities and in smaller schemes, as in Bucharest no new large pro-jects have been announced (except for some extensions). The star of the year 2018 seems to be the residential sector, which will likely record the fastest growth.

As new generations enter workforce market and start spending money, new, innovative real estate products are developed targeting them. Zoku Amsterdam was opened in 2016 and is a “combination between Airbnb and WeWork”, as Business Insider pointed out. The company is now developing in Europe, so BREC talked in an exclusive interview with Marc Jongerius, Managing Director & Co-founder Zoku about targeted cities and the expansion model.

Zoku aims to create an international community network of Zokus through an international rollout in cities that are innovative, tolerant and have a large international network.
In the next years, it is our ambition to open at least five new locations with around 750 units, focusing on European cities such as London, Berlin, Paris, Hamburg, Barcelona, Vienna Zurich or Copenhagen.
Zoku is always looking for interesting opportunities in areas that will be rapidly developing in the upcoming years. When we find an opportunity in a city that matches our pre-defined criteria, we will definitely always look into it.

Zoku will keep the operation of its hotels within the company and can be realized in existing buildings as well as on new-built locations.

A smart coffee shop concept is an “anchor” for a successful office building: a benefit for tenants and a landmark for the building, attracting new clientele in the place. With new office hubs and retail formats developing, we sat down with Răzvan Crișan, Co-founder of m60 and talked about the specialty coffee market development and opportunities.

Theoretically, there are around 40 places in Bucharest, called as ‘specialty coffee shops’, but I believe that only 10-15 are preoccupied to do a truly good job. And when I say a good job, I am referring to investments in equipment, working with good beans and most of all the investment in the staff to offer a nice experience for the clients. At M60 we decided to serve along specialty coffee, simple but delicious food. If you do your job honestly, with a coffee shop like m60 you can reach an annual turnover of over 2 million RON, like us, in the third year.

We started in 2015 and we have succeeded to double our business. Regarding the clients’ daily average, we have increased significantly, at a level of 250-300 persons. We have three criteria which we try to implement every time we invest in a new location: we focus on quality design, with an original approach, that suits the location, we offer very good quality products, trying as much as we can to buy from local producers and we invest in creating a motivated and involved team. Interestingly, when we chose the location from Mendeleev street we were discouraged by real estate experts on the market, arguing the area was inappropriate. The lesson here was that sometimes you don’t listen to the expert’s opinion and trust your entrepreneurial instinct, especially when you are a start-up.

The technology center of Deutsche Bank is operational since 2014 in BOB office building from UpGround and employs 500 IT & C specialists . The center develops top software solutions for the banks’ global operations and represents a platform for highly skilled engineers. BUCHAREST REAL ESTATE CLUB exchanged views with Marian Popa, Director of DB Global Technology in Bucharest about the future of workspace and expectations related to the services on the local real estate market.

A competitive workforce market generates quality, and this has positive effects as competition is the most severe arbitrator. We try to perceive our workspace as a partner – I think this is the principal differentiating factor. A partner which helps you to perform, which generates good mood and stimulates the creativity of the occupants. And, as it mainly is a problem of human interaction, the project manager was the HR Department. The achieved results prove that it has been a successful project, which we are about to multiplicate.

The workspace of the future is directly related to the development of technology. The more freedom technology offers us, the more virtual the workspace will become. The “working anywhere” concept will evolve and will be the future trend, while holograms, future networks of 6-7-10G, augmented multi-tasking will allow us in the future to consider the office anywhere.

Romanian real estate market starts to enter a pre-maturity phase and I sense the need of its transformation in a supplier for habitat services. I am referring here to complete relocation services: from temporary apartments offers, shared-car services (the road from home to office is constantly done for 22 days per month), catering, conferences facilities, etc. The transformation of this industry from a predilect “hard” area to a “soft” area will determine a qualitative increase of used spaces, in the benefit of both parties.

One of the proposed routes in the initiative is China – Port Batumi-Port Constanta. If the railway road will include Romania, the new created infrastructure will have a massive impact on the local logistics sector, with the potential of attracting new, important players on the market.

On the occasion of the 16+1 Summit (China-Central and Estearn European Countries) in Riga, November 2016, the China – Central and Eastearn European investment Fund was launched – a private equity fund meant to support investment projects implemented through the 16+1 Cooperation Format.

Industrial and Commercial Bank of China (ICBC) Financial Group was designated by the Chinese Government to launch consultations with potential partners, for the establishment and operationalisation of the fund. Thus, under the coordination of Sino-Central Eastern Europe Financial Holding Corporation (CEEFC), member of ICBC, consultations, strategic lines and ways of operation of the Fund have been established. CEFC, together wth ECE partners and other Anchor Investors will contribute to the initial capital with EUR 1 bln., as Limited Partners. Other premium institutional investors are expected to contribute with EUR 9 bln., following a fund raising campaign.

The Fund will mainly finance projects in the ECE region, as well as projects developed under the new Silk Roads Initiative in other regions. Under market conditions, without irredeemable component, public projects will be financed (such as transportation infrastructure, energy, utilities and other public projects). A special attention will be provided to private sector projects able to generate important growth in the following period – companies activating in healthcare sector, agriculture, IT&C, High-Tech, Real Estate, states the Romanian Ambassador to the People`s Republic of China.

The Initiative is considered the biggest foreign spending program by any one country since the U.S.’ Marshall Plan to rebuild post-World War II Europe. BUCHAREST REAL ESTATE CLUB`s key question in the context: How will Romania and ECE private Real Estate sector will benefit from?

Following the opening of a new office in Romania by Axis Communication, the market leader in network video, we sat down for an interview with Bogdan Gavril, Sales Engineer & Trainer, CEE Region at Axis Communications to find out more about the company’s innovative solutions for retailers and smart city.

We believe that the road to a smarter traffic is by monitoring it. From congestion and stopped vehicles to serious accidents and extreme weather, we understand the everyday traffic management challenges and to keep the traffic moving as smooth as possible, we need the very latest information at hand.

Axis Communications is working with partners across the globe to offer smart network video solutions, that can provide reliable and detailed traffic video around the clock, automatically alert for incidents such as congestion and stopped vehicles. Our products stand up to the toughest weather conditions and provide real-time and historic traffic data. One of our recent local integration was done in Bucharest, Pasajul Unirea. The solution was developed by Axis Communications and one of our partners and consists of three pillars:

• Axis network cameras with technologies that allow the units to monitor in any light conditions.
• Citilog video-based Automatic Incident Detection system, that identify incidents and accidents within seconds on highways, bridges and tunnels. The application was installed directly on Axis Cameras, through the AXIS Camera Application Platform.
• Number OK LPR – Software that can recognize car’s license plate numbers and control executive units /barriers and automatic gates. Number OK can recognize license plate’s patterns, regardless of the plate state and lighting conditions.