“The latest data in the real estate agency reports look good and so do macroeconomic results. I hope we’ll buy another plot of land this year, considering we are in talks over several plots suitable for office or residential development,” said Antoniu Panait, managing director of Vastint Romania, the property unit of Inter IKEA, a company owned by Swedish billionaire Ingvar Kamprad.
“We constantly look at various plots of land, prices are down but in some cases the asking price is still too high. If we look at the development of crises over time, we can see prices never reverted to the initial level fast, because people are not that quick to forget the effects of the crisis.”
The Swedish group also bought an about 20,000 square meter plot of land near the Carrefour Orhideea retail center in 2011. Panait says that the company is now holding a tender to award the contract to design the office development for that plot.
Under the circumstances, the number one priority and also the project that has made most progress remains the development on the Timpuri Noi site, which might generate about EUR5 million revenue a year when the two office buildings are fully rented.
“The headline rent (no incentives for the tenants i.e.) is EUR15/month. We have not begun renting the space yet but a number of companies interested in it have contacted us,” Panait said.
If the rental pace is good, the company may start work on the third office building (20,000 square meters). Construction on the residential area will not begin unless the office development is completed, he added.
Vastint devised the Timpuri Noi project as an integrated development where people could live, work and shop for what their basic needs, “the kind of project we ourselves would love to live and work in.”
Despite positive signals from the real estate market lately, Panait believes he should remain conservative, so he is in no rush to begin work on the residential part of the project.
“After having left Romania in 2009, we are now seeing real estate investors come back,” said Shlomi Mintzer, chief executive officer of Danya Cebus and general contractor of the Timpuri Noi project.
His company is due to the begin construction of an apartment building in the Vitan area of Bucharest for the Gindi group and several weeks ago began construction on the third apartment building of the City Point complex. It will also complete the buildings it is working on at the ballistic missile defense site at the Deveselu Air Base this year, Mintzer added.
(English version by Loredana Fratila-Cristescu)