Investment briefing: strong fundamentals for Romanian real estate market
Romanian real estate market has strong fundamentals and an eventual correction will be a moderate one, that was the conclusion of the most important investors and consultants during the Investment Briefing roundtable organized last week by Bucharest Real Estate Club at Athenee Palace Hilton, in Bucharest.
The event was attended by top real estate professionals, IT companies and representatives of international chamber of commerce in Romania. Itay Banayan, VP, Real Estate for Mindspace, one of the most recent companies to enter Romanian market with a strong leasing deal of 12,000 sqm, Mihai Zaharia, Director of Investments & Capital Markets, Globalworth, Robert Miklo, Director, Investment Services, Colliers International Romania, Marian Popa, Ori Efraim, Head of Real Estate, KPMG, Oana Motoi, Managing Partner, Cromwell Evan Global and Roxana Dudau, Associated Partner, Noerr were among the speakers.
“The office segment remains our core area for portfolio development, but we are also looking more carefully towards the logistic sector. We have such a project in Timisoara that we are developing, but we are also analyzing other cities for new investments, such as: Cluj, Sibiu or Constanta. We choose to develop because there aren’t enough available products on the market”, Mihai Zaharia, Director of Investments & Capital Markets, Globalworth said during the event.
“When the next dip arrives, it will likely be shallow, supported by balanced, robust fundamentals in markets,” Robert Miklo, Director, Investment Services, Colliers International Romania argued in his presentation. He added: “Internal migration patterns will drive real estate with a strong hand and growth will come from regional hubs mostly.”
“Landlords that implemented the last valuation reports at the end of 2016, should reassure to update them until March 2019, to avoid paying the property tax at an increased quota of 5%”, said Oana Motoi, Managing Partner of Cromwell Evan Global, a recent established company active in the tax & business advisory fields.
In a premiere at a business event on the Romanian market, Itay Banayan, VP, Real Estate for Mindspace spoked about new workspace format: “We provide high-end, flexible, tech-enabled workspaces for our member-based communities of large enterprises, small businesses and entrepreneurs. We are organizing and hosting hundreds of events every month, such as lectures, workshops, networking events, tech talks or professional meetups. This is our way of making Mindspace the center of attraction for the local ecosystem. It helps to create an outstanding reputation as well as attract new customers,” he said.
The workspace format triggered quite a debate. Marian Popa, Country Manager for Deutsche Bank Technology Center which employs now 900 people in Bucharest commented: “Our employees work one day per week from home. This initiative determined the decrease of our space need by 15%. New operators such as Mindspace are good news for us because they offer a cheaper and more efficient solution. The market should reorient towards <<services area>> or else the buildings will be partially empty until 2030.”
Commenting on what can Romania implement in the legal field, in order to be more attractive for investments in real estate and to attract the long awaited institutional investors, Roxana Dudau, Associated Partner of Noerr, said: Granting fiscal incentives in Bucharest for green buildings (already implemented in Cluj Napoca and Timisoara) could attract more institutional investors. Bucharest is the city with the biggest number of green buildings and such incentives are not yet granted.”
Ori Efraim, Head of Real Estate, KPMG, presented the conclusions of the “Property Lending Barometer 2018”, a survey among 70 banks from 14 European countries: “Most Romanian banks in the KPMG survey emphasized the importance of real estate financing in their banking strategy. In comparison with last year’s query, about 40% of respondents have increased their focus on the sector significantly whilst the remaining 60% have maintained their positions. All of the banks are open to provide financing to income generating projects, whereas only 40% are open to finance new developments”, he said.
The topics discussed at the roundtable have also been presented in the media, generating new subjects on the public agenda:
Capital -> https://bit.ly/2RTDDvC
Economica -> https://bit.ly/2zOClL2
Capital -> https://bit.ly/2PXZCny
Adevarul -> https://bit.ly/2QEYumb
Economica -> https://bit.ly/2T8gF5e