“Romania is a market that is not liquid enough to ensure safe profitable exit, like Poland. It’s a paradox, Romania’s economic growth is higher, but real estate market-wise, Poland is more attractive. There is no direct connection between macroeconomic figures and the state of the real estate business.”
There are only a few developers driving the local real estate sector, as they conduct all the main deals on the market. South Africa’s NEPI and Ioannis Papalekas’ Globalworth were the main actors on the real estate deal market last year, which stood at a EUR1.2 billion.
“Romania has a perception problem. Investors look at the political scene, as swell, they think there are legislative flaws, that the corruption issue has not been addressed yet. Romania also has the advantage of being a large market, but the disadvantage is that besides Bucharest, the other cities are very small. Poland has such cities with about 1 million people each. If Bucharest offers few exit options, the other cities offer almost none.”
The differences between Bucharest and the rest of the country can be seen in the volume of investments attracted. Bucharest has about 2.2 million square meters of office space, while the stock of modern office space in the main cities in the rest of the country, Cluj-Napoca, Timisoara, Iasi and Brasov, stood at about 490,000 square meters at the end of last year.
TriGranit Development owns several plots of land in Romania, among which a 14,000 square meter plot in Bucurestii Noi (NW Bucharest) and a 24-hectare plot in Brasov. Macarie says the developer is now looking for buyers for these plots or partners for developing them.
A sale is unlikely, Macarie says, because the prices it can get is low, considering the company bought the plots when prices were at their highest. The solution is to have a partnership, a joint venture.
“Romania is a traditional market for us (…) and we want to return to it if the conditions are good.”
US private investment firm TPG, which also owns logistics space developer P3, is in talks to buy into TriGranit, according to EuroProperty.
The TriGranit group, which includes TriGranit Development, developed the Polus Center shopping center in Cluj sold to Austria’s Immofinanz for EUR200 million. It also started Polus Constanta, which Immofinanz bought in mid development and renamed Maritimo.
Sandor Demjan, the founder of TriGranit and one of the richest businessmen in Hungary, also bought the Atrium Center mall in Arad in 2013, developed by Atrium Centers run by Michael Israeli.
(English version by Loredana Fratila-Cristescu)