|Return||SIGNS OF THE TIMES – Real Estate Market in Romania
Major investment in real estate developments and shopping centres April 11, 2008
Major investment in real estate developments and shopping centres coming next week
Floreasca City by Raiffeisen Evolution
Raiffeisen Evolution real estate developer, a division of Austrian financial group Raiffeisen, is launching, on Wednesday, its mixed Floreasca City project in northern Bucharest, an investment of EUR 200250 M.
The project will consist of a mall the Promenade Mall an office tower about 130 in height – the Sky Tower, the highest office building in Bucharest and a second office building.
The Promenade Mall could be the second mall in the north of the Capital, following Baneasa Shopping City – the largest shopping centre in Bucharest and in the country to be launched this week.
Since the end of 2007, Raiffeisen Evolution, is also the owner of 11 hectares in the Straulesti area, purchased from Petrom for EUR 90 M, where it is planning to develop a large-scale project. On the other hand, Raiffeisen Evolution is the developer of the Oracle Tower in northern Bucharest sold for EUR 20 M to insurance company Unique, in 2005.
InCity Residences showroom opening
Anchor Group is opening, on Tuesday, the showroom for its InCity Residences residential development. Anchor Group is among the lead developers in Romania.
With an investment volume of EUR 340 M in finalised or planned projects, Anchor Group holds vast experience in the development of retail, residential and office projects. Its main accounts are: Bucharest Mall Romania’s first mall – , Plaza Romania, en of the most popular shopping and leisure destinations in Bucharest – Anchor Plaza the first class A office building integrated with a shopping centre and InCity Residences – a residential ensemble situated in the Bucharest city centre. InCity Residences includes 500 apartments with modern architecture and customised interior design and finishings. The construction began in August 2006 and is to be finalised in the latter half of 2008.
Baneasa Shopping City Mall
The Baneasa Shopping City Mall, an inherent part of the Baneasa Commercial Area is pending official opening on April 18, 2008, according to a press release issued by the developer, Baneasa Developments.
Apart from prominent fashion brands, Baneasa Shopping City is also introducing the country’s first three-floor food court dedicated to the fast food segment, a first floor accommodating restaurants and a second floor dedicated to the club & lounge area. In its last construction phase, Baneasa Shopping City will bring a unique concept to the market the largest entertainment centre in Romania.
Real estate consultancies’ fees to reach 100m euros
Construction work rhythm places Romania 5th in the EU
A significant growth has been taking place over the recent years in constructions. Triggered by an increased living standard, by land retrocession, by the “hunger” for houses in the country, by new lending policies pursued by banks, the construction sector witnesses a steady dynamics, contributing to the GDP growth and, unfortunately, to raising the trade deficit because of imports of construction materials, equipment and accessories.
According to Eurostat, the construction work growth rhythm in Romania is three times faster than the European Union average, and ranks 5th in the EU member country top that is led by Bulgaria. Construction works registered a 29.8 per cent growth in the first quarter of this year in Romania, compared with the same period last year, the 27-state average being of 29.8 per cent. Bulgaria ranks first in the table, with a 62.8 per cent growth. Lithuania, with a 43.5 per cent growth rhythm, Poland with a 51.3 per cent growth and Slovenia with 35.7 per cent also surpassed Romania.
When we refer to this sector of economy, we need to take into consideration several “branches”. There are, on one side, individual constructions, belonging to people who build a house or a villa on their own land. Then it is about the high pace at which super-markets and hyper-markets emerge in Bucharest and in other important cities of the world. One should not overlook the developments in tourist areas, particularly in the mountain areas, which are also growing fast.
Lastly, the big cities, mainly in the outskirts but not only, important district projects are developed, with the participation of famous foreign and Romanian companies. They meet the lodging and upgrading expansion needs, resulting in the establishment of small “cities” around large cities. One should underline that the amplitude of such projects is stimulated, as mentioned, by the increased incomes of certain social categories and by the accessibility of loans from commercial banks. In a few years, both Bucharest and other cities of Romania will have a new “look”, both from an aesthetic viewpoint and in terms of conveniences provided to the new owners.
The way these projects look like, what are the prospects provided by them, what are the facilities provided to clients these are only a few questions that the current supplement intend to answer to, in an attempt to offer an accurate and ample image of existent projects. Naturally, the supplement is unable to cover all aspects, but it is a good start in describing immediate projects.
Buyers’ preferences in terms of new housing units are beginning to crystallise, and developers adjust their supply to the demand. The buzz word is “comfort”; but this is also a matter of convenience. Areas are calculated to meet buyers’ needs, so as to have housing units in new projects available for prices comparable to those in old blocks of flats.
Although every Romanian dreams of an apartment with an inside staircase, in actual fact most buyers of housing units in the new residential complexes choose studios. In many projects, the first and best selling units were one-bedroom apartments. This is owing both to the small price per unit, small area and to the fact that studios are easier to rent or sell.
Real estate experts claim the easiest apartments to sell are the two or three-bedroom ones, with areas ranging from 45 and 60 sq m for the two-room flats and 60-100 sq m for the three-room units, located in areas with easy access to public transportation means.
Developers are already beginning to adjust their supply to the demand in the market. The first effect is the low supply of four-bedroom units. For instance, most projects promoted in this year’s Real Bucharest real estate trade fair only included two and three-room apartments and studios. For those who want to buy a four-room apartment, the only choices are villa complexes or the complexes addressing customers in high-income categories, who can afford larger apartments.
Blocks of flats addressing the middle class will not include large-area flats. Moreover, areas of such units are expected to decrease, according to some experts, given the incomes of the target group on the one hand, and the announced rise in utility prices, on the other hand. The new offer addressing the middle class will settle, in terms of flat area, within values similar to those of old flats, while luxury apartments will vary in size, depending on the concept of the project and of the type of flat (e.g. penthouse). The difference between new and old apartments will not be made by areas, which will be comparable, but rather by the safety level, the finishing quality and the efficient partitioning of the existing space.
450 MN euros worth project in Bucharest commercial center
UK developer Modus Properties will invest, along with partner company Nova Imobiliare, some 450 million euros in the construction of a new commercial center in Bucharest, the largest facility of its kind until today.
The complex will measure a total of 162,000 square meters (some 200,000 square yards), but only 52,000 square meters will be opened in the first phase, before the end of 2009.
Beside stores, the complex will include 16 movie theaters, restaurants, pubs, coffee shops, entertainment areas and 8,000 parking spaces. The “Colosseum Shopping Center” will be built in the North – Western edge of Bucharest.
Bucharest Real Estate Space Boom
Real estate investments in Romania are dropping
44% more office space in 2006
The prices of land plots in Bucharest will continue to grow but at a slower pace than the last few years and only in the areas where the market has not reached its peak, according to real estate agency Regatta. The market is presently expanding beyond the administrative borders of the Capital as the number of plots available in-city is too low to meet the growing demand. “The trend will continue,” said Alexandru Nitescu, Investments-Lands director, Regatta.
Euro Habitat develops residential area
Local real estate market still immature, realtor says
Land prices to stabilize nationwide
|As EU date nears, Bucharest shakes off a drab image
By Roxana Popescu, International Herald Tribune
MAY 6, 2005