“Banks have more assets than any other developer. They have assets worth around EUR700 million in their portfolios, but they have a potential to exceed EUR1 billion between 2011 and 2012,” estimates Sorin Preda, managing partner of Global Vision, which, among other projects, manages the UpGround project in northern Bucharest. He made the estimate at the “Property Management” seminar organized by Ziarul Financiar.
Major projects that became part of bank portfolios in the last few years include Bucharest’s City Mall, residential complexes Cortina and Blue Tower, all of which were the result of bankruptcies, where the main creditors were the financial institutions. From City Mall alone, banks have to recoup loans worth over EUR40 million.
Real estate assets that end up in bank portfolios need to be kept in good condition and prepared for sale. Property management companies provide rental services, repairs, preventive maintenance and security, but banks have started in the last few months to develop specialized departments for these operations, recruiting people from real estate.
“A real estate asset remains in a bank’s portfolio between 18 and 24 months. However, finding a buyer continues to be linked to the price. Even now, apartments sold at a discount of 25%-30% find a buyer within a few months,” says Valentin Ilie, CEO of Coldwell Banker Affiliates of Romania.
(English version by Daniela Stoican)