The office market appears to be the most attractive, but the residential and commercial market could bring over 10% a year outturn, say the real estate representatives in the local market. Using a Financial Times example, ZF asked ten representatives of the most important companies in Real Estate what will they do with a million euros: “If you had 1 million euros at your disposal to invest in the local real estate market, how and in what will you place the money for the best outturn in the next 5 to 7 years?”. Form the perspective of nine managers the outturns given in the present by the real estate market are higher than the deposits interests, and the risks are also high.
Codrin Matei, Managing Partner at Crosspoint, made the some comments regarding the real estate investments this year.
“First of all it depends on the appetite for risk of each person. To those with a lower risk appetite I will recommend to invest 1 million euros in several apartments with 1 and 2 bedrooms, more specific in new residential buildings, and even buy off plan.
The value of transactions should not be over 140,000 euros per unit for the 1 bedroom apartment, and 180,000 euros per unit for the 2 bedrooms apartment. Here I’m considering the apartments with a high level of finishing, and situated in areas with a high demand for spaces (specially in the new developed business district, the area Barbu Vacarescu – Pipera – Calea Floreasca).
On long term this investment will bring a good outturn, but the consistent gain will come from the value appreciation of a later transaction.
To those who have a medium or higher appetite for risk I will recommend to buy a land and to develop a residential project. I believe that in the present real estate market the demand still exists, specially in some areas of Bucharest.
There are some assets in liquidation at low prices, but unfortunately these kind of occasions come rarely and are not available to anyone. The banks still prefer to hold on to these assets and wait for an eventual market rebound, in order to limit their losses.”
Other Real Estate representatives in the local market answered the ZF challenge: Valentin Ilie, CEO at Coldwell Banker Affiliates of Romania, Horatiu Florescu, President & CEO The Advisers/Knight Frank, Mihnea Serbanescu, general manager at DTZ Echinox, Razvan Iorgu, CBRE Romania, Ilinca Paun, managing director Colliers International, Viorel Lacatus, investment agency director at BNP Paribas Real Estate, Alexandru Petrescu, managing partner at ESOP Consulting l CORFAC International, Andrei Vacaru, head of research & consultancy at Jones Lang LaSalle.
The entire article has been published in the printed issue of Ziarul Financiar on 20th of January 2014, by Cristi Moga.