When an investor that has seen all the changes the Romanian real estate market has been through in the last ten years says, “the trend has changed,” things on the real estate market could turn not “rosy”, but less grey, Business Construct magazine writes.
Sitting in a blue armchair in a meeting room of the GTC headquarters in Bucharest’s Primaverii district, Shimon Galon, who has developed real estate projects worth around EUR400 million on the Romanian market, he no longer has the frown on his face that he had in 2010, when he was complaining that “It’s no use to bring people to the mall because stores are doing badly anyway. The woman with a smile on her face and carrying shopping bags is not there.”
After opening three malls since the beginning of the crisis, with an occupancy rate at the time of around 70%. Galon is a few days away from opening his fourth Galleria project, in Arad, where the situation appears to have significantly changed.
“In October 2010 the Arad mall was “zero”. (…) Now we have one empty space covering 113 square meters. Of course it’s unusual, it remains to be seen if the mall performs, but it has every chance of succeeding,” says Galon, who attracted to the Arad mall tenants such as Cora, Inditex, Mango and Cinema City, companies targeted by all mall owners.
According to him, the mall owners helped the tenants arrange their stores and charged rent correlated to the tenant’s turnover.
“If things go well for the large, international tenants, things will go very well for us too. We expect revenue of around EUR4.8 million from rent at Galleria Arad in the first year. We will see if we were right,” says Galon, who, in order to reach this revenue would have to collect EUR12 each month for every square meter of the mall.
During the interview Galon talked several times about the importance of people being aware of the positive signals on the real estate market.
“We have to see the good signs on the market and so the snowball will start to grow again and turn into a snowman. But let’s not think tomorrow we will have a box of money. The important thing is the trend.”
Galon adds that it has become difficult to find billboard space to advertise on in Arad, which might be signs of an improvement.
A graph of the three malls in GTC’s portfolio shows that traffic increased 20-30% this year in its malls in Piatra-Neamt, Buzau and Suceava, the latter being the town with the largest number of malls per capita.
“Sales have increased significantly in malls, there are tenants present in all our malls who told us they had 40% higher sales than last year,” says Galon, who measures the number of monthly visitors against the lettable area, obtaining results comparable to those of a mall held by GTC in Prague.
After the completion at the beginning of October of the Galleria Arad project, Galon will have another project under development, the Ana Tower office tower, for which he has partnered with George Copos.
The project is located next to Crowne Plaza hotel, a few hundred meters away from City Gate, the two towers in Piata Presei square in northern Bucharest, also held by GTC, and visible to anyone who comes to Bucharest from Ploiesti, including from the two airports.
Since the 18-floor towers are already finalized and rented out, Galon has already started marketing the Ana Tower project.
(English version by Daniela Stoican)