Dezvoltarea pieței de imobiliare în prezent și viitor la ‘Real Estate & Construction Forum’
Source: Financiarul.ro.
Current and Future Trends in the Real Estate Market at the ‘Real Estate & Construction Forum’
On November 21, the seventh edition of the ‘Real Estate & Construction Forum’ took place at the Radisson Blu Hotel. The conference featured two interactive discussion sessions with key players in the real estate sector, moderated by Mihai Pătrulescu – Senior Associate, Colliers International.
The first session included notable figures such as Dimitris Pergamalis – Head of Construction and Development, Globalworth; Andrei Pogonaru – Partner, Central European Financial Services S.A.; Dumitru Minciu – General Manager, Novart Engineering; Raluca Crişan – General Director, Ceetrus România; Roxana Dudău – Associated Partner, Head of Real Estate & Construction Department, NOERR; Lucian Anghel – Founder and CEO, Timepal România & Facilities Management Services.
Discussions began with an exploration of evolving customer needs in the entertainment segment of real estate. Andrei Pogonaru, owner of Veranda Mall, emphasized that ‘each mall’s development strategy is unique. With 400,000 residents aged 25 to 40 living near Veranda Mall, my goal is to attract them after work, not during business hours. I aim to create an experience that embodies the concept of a third place – beyond home and office.’ Regarding the Obor area, he noted: ‘There’s a return to historical averages. This area has always been a commercial hub, historically filled with merchants selling from their yards. This was the case 300 years ago where Veranda Mall now stands. Gradually, I see a resurgence in retail and residential properties. The dynamics of the area have shifted, leading to potential office projects and co-working spaces. I foresee a mix of 60% residential, 20% commercial, and the remainder office.’
Raluca Crişan added, ‘the evolution of consumer needs reflects societal trends and highlights a desire for reconnection among people. As retail professionals, we’ve recognized this sensitivity. It has brought us closer to the concept of community. In Brașov, there was a need for a vibrant space, more than just a mall. Once we understood this, we committed to creating a joyful environment daily, collaborating with local residents. Brașov has a rich trading history, and developing Coressi, this artificial platform, was a challenge that turned into the largest urban regeneration project. Its success stemmed from our connection with the community, including support and vision from local authorities. For Romania, growth will emerge from the development of regional cities.’
Dimitris Pergamalis discussed the evolution of office buildings, stating, ‘developers are heavily focused on storytelling and community in their projects. Globalworth has adopted a different concept: community and atmosphere – collaborating with adjacent spaces, green areas, co-working, etc., to foster a community. For instance, we organized an interactive art event in our buildings, attracting around 100,000 visitors. We must focus on storytelling, build community, and offer something extra – Globalworth Tower has already hosted three art events. Regarding the Barbu Văcărescu area, we were fortunate to start its development in 2007-2008 when we arrived in Bucharest. It is the capital’s primary business district, and we firmly believe in its future growth. Thus, we adopted the Globalworth District concept to introduce an attractive element. The Dimitrie Pompeiu area aligns with this concept – creating a community with access to specially designed outdoor spaces that can attract individuals beyond the business sector.’
On retail demand, Andrei presented an optimistic outlook: ‘Successful brands from Western Europe, even from the Baltic states, see Romania as a competitive market opportunity. Major European cinema operators have already entered the country. Competition is beneficial for malls, but new brands are also driving the market towards greater volatility. For consumers, we can talk about the best experience yet – a golden age for consumers.’
‘In terms of office construction, we observe a rising demand. In 2018, 130,000 square meters were delivered, and in 2019, we will deliver 40,000 square meters from Renault Bucharest Connected, plus 35,000 square meters from Globalworth Campus, along with a large conference room. In 2020, not all office spaces will be absorbed, and we won’t face a crisis, but rather a slight pause, requiring developers to focus on smart buildings, green structures, and community creation. Co-working spaces will serve as a good buffer during this correction period,’ Dimitris stated.
The topic of green buildings led to an engaging discussion on Near-Zero Energy Buildings. Roxana Dudău spoke about the implementation of the EU Directive, which mandates that all new buildings with construction permits must be nearly zero-energy. ‘We expect local authorities to encourage developers to invest in such buildings. In Bucharest, the implementation of fiscal incentives has not been successful, but cities like Cluj and Timișoara are ahead in this regard.’
Lucian Anghel added to the conversation about green buildings, stating, ‘there is good news regarding energy efficiency, including funds allocated to support companies in adopting such solutions. Currently, efforts are underway to refresh old buildings to achieve greater energy efficiency. Regarding smart metering, it’s crucial to assess how costs are allocated before efficiency improvements. Some costs are borne by owners and not passed on to tenants. In Romania, 69% of companies have not implemented a smart metering system for their main equipment, according to a 2018 study by EnergyPal, and only 35% of companies would allocate a budget for implementing smart metering systems.’
The discussion continued with our guests, shifting to the topic of construction costs, both for labor and raw materials.
‘This is a reality we are directly facing, and we are trying to address it intelligently – adopting a proactive stance, collaborating with our partners, relying on their expertise, and approaching the contractors we work with to propose collaboration. We have observed cost increases of 40% for labor, and we have consulted with contractors to determine how much we should raise their rates. In reality, this is not a bold act but an intelligent approach. Of course, this will also impact the selling prices of apartments and office spaces,’ Raluca explained.
Dimitris shared his perspective: ‘Cost increases are expected; this is already happening globally. In Romania, costs for materials and labor have risen. This presents an opportunity to change design and management practices in construction, introducing a value-engineering system that needs to be developed. There is a cost and revenue contribution, but the issue arises when costs increase while revenues do not. Another challenge is the labor shortage, which affects delivery and work quality. We have addressed this situation by importing labor, which helps us deliver projects, but it remains a critical aspect that requires careful study.’
For the development and expansion of Veranda Mall, ‘we converted spaces and reconfigured layouts, which was extremely costly. Nighttime labor costs have risen significantly,’ Andrei noted.
Lucian further emphasized that service charges are not less than 4 euros per square meter, while Dimitris pointed out that construction losses are around 40% due to design, execution, or poor integration between design and execution.
Regarding common mistakes in this sector, Dumitru Minciu mentioned, ‘the level of adoption and openness of clients towards new digital products that support them. In this regard, we have initiated the creation of a technology guide to explain what digitalization means in construction projects.’ Roxana added that ‘clients often do not hire a legal consultant from the outset and enter negotiations unprepared. From the developers’ perspective, there is often a lack of due diligence regarding land – whether necessary permits or approvals exist.‘
In the second session, we welcomed: Sînziana Pardhan – Country Head P3 România; Andreea Hamza – Head of Sales & Marketing Hagag Development Europe; Narcisa Chirilă – Tax Manager PKF FINCONTA; Daniel Paraschiv – Business Development Manager for Transilvania CTP Invest; Bogdan Oșlobeanu – General Director Impact Developer & Contractor; Ahmet Buyukhanli – CEO Opus Land Development; Mauricio Mesa Gomez – General Director Cordia Romania.
We reviewed several aspects related to the companies represented by our guests: Sînziana – ‘P3 acquired 16 hectares in Dragomirești with access to the ring road, where we plan to develop 80,000 square meters.’; Daniel – ‘we own 1 million square meters of industrial space in Romania and are approaching 5 million square meters in our entire portfolio. We have 300,000 square meters in the pipeline, of which 50% are already constructed.’ Andreea – ‘we are focusing on consolidating constructions on Calea Văcărești, with other residential and office developments starting in 2019.’ Bogdan – ‘the Greenfield development includes 45,000 apartments based on a market-validated concept.’
Regarding market prospects, Sînziana stated: ‘In 2018-2019, the market is developing more balanced compared to previous years. In 2019, the trend continues on this upward trajectory of healthy market development. We will see more aggressive players in acquisitions, and the acquisition in Dragomirești is part of P3’s strategy.’
‘Bucharest is aggressively developing at km 23, and we will complete the largest mono-block industrial space of 127,000 square meters in the spring – we have industrial park status and a fiscal advantage for both us and our tenants, who will consolidate their businesses in one location. We are even considering developing accommodation units for the workforce. At km 13, there is enough land to create a 1 million square meter park, but we won’t reach that point for at least five years. Our strategy focuses more on construction and less on acquisitions,’ Daniel stated.
When discussing acquisitions versus development, Sînziana shared, ‘in 2019, we are focusing on developing the land we have, continuing our dynamic expansion through acquisitions of existing assets that meet our criteria. We are increasingly focusing on developing logistics spaces, which we saw a demand for in 2018, but we also noticed demand in retail and e-commerce.’ Daniel added, ‘we are concentrating on finding new clients and maintaining good relationships with existing clients – organic business growth has been 40%, thanks to recommendations from our tenants. The health of our business depends on the health of our clients’ businesses.’
E-commerce was another topic discussed at the conference, serving as a primary driver in the logistics space market across Europe. ‘If we look at the figures, the annual GDP has grown by 2%, the e-commerce sector by 15%, and the delivery of logistics spaces has seen a 10% increase. We can talk about a rise in demand for logistics spaces correlated with the evolution of the e-commerce sector,’ Sînziana noted. Daniel added, ‘E-commerce is a source of tenants for us, and it will continue to grow in the coming period. We observe a slower alignment of logistics space robotization, as these investments require a payback period.’
Narcisa discussed fiscal expectations for 2019, stating, ‘there are not many legislative changes; however, the reverse taxation on property sales is extended.’ She added recommendations for property sales: ‘Both undeveloped land and „old” constructions can be sold with VAT (or under reverse taxation if the transaction occurs between VAT payers). If this option is chosen and notified to authorities, this fiscal treatment is preferable if VAT was deducted at the property acquisition, and the sale occurs within 20 years (the VAT adjustment period for real estate). In transactions between affiliated parties (including sales to company associates), the market principle must be respected, and the evaluation report can justify that the transaction occurred at market value. If it is proven that the transaction did not occur at market value, there is a risk of adjusting the income from property sales and the VAT collected for the transaction.’
The guests also discussed market interest regarding historical buildings, noting, ‘we observe an increase in demand for historical buildings and the concept of revitalizing an old building. The biggest challenge is to blend current architectural elements with the architectural style of the building – for the building on Calea Victoriei, we face this situation: we have the location, but we must maintain the existing structure, finishes, etc., to create a product that meets the needs of the most discerning buyers,’ Andreea explained.
Guests presented aspects that influenced their decision to invest in developing spaces in various areas of Bucharest – Bogdan noted, ‘B-dul Expoziției is a significant office hub: we have 200,000 square meters in the pipeline for the office sector. This presents an opportunity for developing premium residential spaces.’ Mauricio added, ‘B-dul Expoziției is very well positioned – close to Herăstrău, with access to two major boulevards and a metro line at 1 Mai. All conditions for development are present, and there are available lands, many office buildings under development, and 20,000 people will come to work in this area. Our development concept is based on a different element than the market – we target people who will work in nearby companies. We have integrated green spaces, such as gardens for yoga and areas dedicated to trending sports activities – calisthenics. We offer a high-quality product at affordable prices. We continue to observe the city and its development, traffic flows, and where offices are being built.’
Ahmet discussed the upcoming focus on developing Cosmopolis: ‘the most significant benefits for Cosmopolis residents are that we have created a community, a lifestyle with common elements for the beneficiaries – we are talking about 17,000 people currently living in Cosmopolis, enjoying a lifestyle different from that in the city center. They have access to parks, semi-Olympic pools, a beach near the lake, kindergartens, public schools, churches, etc.‘
Regarding Greenfield, Bogdan stated, ‘the project is hard to replicate due to its differentiating factor – you buy and gain access to a lifestyle akin to that of a mountain town. A complete, healthy lifestyle, unique in Bucharest, rare in Romania. There is a private school, and we will also have a public school, and in 2019 we aim to develop a community center – fitness room, swimming pool, etc. The recommendation rate is 30%, and sales come through recommendations, and at the end of the development, we expect 10,000 residents.’
The event was organized by BusinessMark.
Event partners include: CTP, NOERR, NOVART, BRISK, PKF FINCONTA, AVIS, Rent for Comfort
The official radio of the event: Europa FM.
The event was organized with the support of: Colliers International, BRCC, NRCC, BCCBR, Zelist Monitor.
Media partners: AGERPRES, Business24, Administratie.ro, Global Manager, aktual24.ro, Gazeta de stiri, Curierul Național, MoneyBuzz, DeBizz, FEMEI IN AFACERI, Financial Market, Financiarul.ro, New Money, Spatiul Construit, PRbox, Rbe Connect, PRwave, Jurnalul de Afaceri, Ziare.com, IQads, SMARK, 1asig, Social Media Romania, Monitorul de Făgăraș, MATEK, Ziarul Clujean, Cargo Magazin, Portal Management, Inturda.ro, InfoOradea, Ziarul BURSA, Transilvania Business, Agenda Construcțiilor, Tranzit, Constructiv, Avocatura, TRUCK&VAN, Finzoom, Energynomics, Antreprenor în România, Depozitinfo.ro, BirouInfo.ro.
