Residential constructions in Bucharest-Ilfov area saw a decline of over 45% between 2008 and 2012, from 8,326 houses and apartments to 4,527 units, but in 2013 the National Statistics Institute registered an increase in deliveries by over 16%, to 5,275 units, a sign the market is starting to deice at the level of Bucharest.
“As in Bucharest, on the housing segment, 2013 was a better year, there’s renewed interest in large land plots for housing unit construction. There were years when these plots were shunned by investors and there was nothing one could do with them. We are now working on a deal with a 5-ha plot in an area with a subway station, at the Bucharest outskirts, and prices have slipped below EUR100/square meter,” stated Sinziana Oprea, senior associate with Colliers.
According to her, four-five Romanian and foreign developers are now seeking land plots to build apartments with prices matching First Home scheme standards, after in recent years retailers and shopping center and office developers have been the most dynamic players on the land plot market.
The consultant believes that after the shock of 2009 and 2010 the land plot market has started slightly regaining health, so that in the past three years Colliers brokers have handled deals with land plots totally worth EUR100 million.
Opera says that in the retail area developers are more interested in land plots for shopping parks rather than for malls and retailers have started looking at the northern area of Bucharest as well, an area they have shunned in recent years on the too high land prices.
At the same time, in the officer sector developers are taking courage from the rising volume of deals, which will lead to a falling amount of vacant offices.
However, prices have not bottomed out, considering banks still hold significant portfolios for sale and investors are highly aggressive in negotiations.
In Bucharest, the upper price level stands at EUR2,500/square meter in Primaverii-Mircea Eliade. “I noticed a price decline from one year to another, even though the decline was slimmer in certain areas where owners were not under pressure to sell. For this year, we also see a slight decrease on deals with foreclosed assets put up for sale by banks,” concluded Sinziana Oprea.
Colliers is one of the largest real estate consultancies in Romania, with revenue of EUR3.4 million last year, up 10%. The market is dominated by the offices of some international groups, such as CBRE, JLL, Coldwell Banker, DTZ or Knought Frank.
(English version by Catalina Apostoiu)