1. 2013 represented an inflexion point regarding the transactions volume on the real estate market. How much has this volume increased in 2014-2015? What are the perspectives for 2016?
The demand for high quality real estate is directly influenced by the country’s economy and its ability to attract investors. Romania is slowly confirming its substantial growth potential and benefitting from exports to Germany, Austria and other countries in Western Europe. The fact that there are many projects in progress confirms our view: Romania’s economy is on an upward trend and is faster growing than other CEE countries.
The local real estate market has indeed picked up the pace in 2014 and 2015. In terms of rent prices and vacancy rates, we can say there is a degree of stability visible in the last period, particularly in Bucharest.
Regarding expectations, using the office sector as an indicator, we can say that we are happy to see clear recovery signs, and are optimistic for the medium term.
2. What are the characteristics of the real estate ‘consumers’ in 2015?
The difficult period that has passed strongly shook the global economy, but there was a silver lining to it as well: consumers have become better educated and more careful about their needs and how they spend their resources.
This situation can only please us, as we pride ourselves on being able to offer tailored solutions to every single one of our clients. Given our extensive experience in this, and the favourable market dynamics, we have also recently begun to develop new projects in Romania: Metroffice and IRIDE City, as well as LOG.IQ Bucharest and the next phase of LOG.IQ Ploiesti. Furthermore, the reconversion works for Armonia Mall in Arad into a logistic center are nearing completion. For all these projects we have very high expectations.
3. How have the structural changes in the banking lending process been reflected on the real estate market (2014-2015)? How has the deleveraging process affected the real estate market?
Our Romanian business is mostly based on long term partnerships with our tenants, with whom we have formed strong relationships through trust, transparency and a permanent willingness to tailor our offers according to their needs. As such, we cannot say that there have been any major changes in our relationships with our tenants as a result of the banking lending process shifts.
4. Which are the ‘stars’ of the real estate market now?
In line with our long term strategy, we closely observe the market dynamics in order to identify any new opportunities. As such, we have noticed clear signs of economic growth, particularly visible in the office sector.
Therefore, we have every confidence that IRIDE City will live up to our expectations, as it is created following our consecrated principles of always putting the needs of our clients first, in order to provide them with tailored solutions.
5. How would you describe the evolution of the premium products on the real estate market in 2015 and which are the causes?
As previously noted, a country’s economy and its ability to attract investors have a direct influence on the demand for premium real estate. Romania’s economy remains on a steady upward trend, which brings growth to all sectors, including real estate.
To us, apart from the general facilities, what truly makes a real estate product ‘premium’ is flexibility. This is the core element which we incorporate in everything we do: from our More Than Office concept, to our LOG.IQ properties. We are ready to customize our spaces specifically to their business needs. Furthermore, we offer our tenants everything they might need regarding the property on location: from asset management, property development and management, up to accounting for the individual facilities represent part of the core expertise.
6. In terms of real estate properties classification (retail/ offices/ logistics/ premium), how would you describe the dynamics in 2015? Have you been surprised by one or more of these dynamics? If positive, please detail. If negative, please also detail.
Mirroring the trend of the national economy, we have seen steady, still subtle increases on all the real estate sectors we are active in – not surprising, considering that this is a long term, gradual process.
On the office front, our biggest current project is Metroffice, which will be realised as the first part of a long-term master plan. This involves the redesign of the entire area within IMMOFINANZ’s Iride Business Park into the future Iride City.
Plans call for the transformation of this area into an innovative quarter with office, retail, leisure and residential space – in other words, a new, open and vitalised section for the city. When the final stage of construction is completed, Iride City will provide space for restaurants, a hotel and conference center and day-care center as well as park and sports facilities. When complete, Metroffice will provide work spaces for about 5,000 employees, while IRIDE City, for over 20,000.
On the logistic front, the next delivery terms for LOG.IQ Bucharest are the final quarter of this year and the first quarter of 2016 – this would represent the first phase of the project, with a rentable surface of about 40,000 sqm.
Furthermore, we are continuing works on LOG.IQ Ploiesti, a large-scale, Class A industrial development, located in the Western part of Ploiesti.
7. IMMOFINANZ targets residential and commercial segments both in Western Europe and in Eastern Europe. What are the similarities in Western and Eastern Europe? And what are the differences? What are the perspectives, from this point of view, in 2016?
We have noticed that the local market is slowly becoming more ‘western’: the clients’ knowledge level is increasing and their demands and expectations as well. Certainly, this is a positive trend that can help the market in the long term.
On the other hand, we believe the most important current obstacle for Romania is the still under-developed national infrastructure. This truly represents a major element in attracting big investors to our country, which, in turn, would provide boosts for the other branches of the economy.
