We know how affected was the real estate market in the last 2-3 years.How smooth or how abrupt was this line in 2011?
From our point of view, as a company serving buyers and tenants of the large middle and lower middle class segment, we felt that people both in residential and commercial were seeking more cost effective units. The markets had too many offers of large spaces and more luxurious apts, while short supply in new or renovated efficient spaces. Renting a 15 SqM office was quicker, easier and at a higher price per sqm than renting 150 SqM. The consumer behavior was affected by tighter cashflows, willingness to be satisfied by more basic housing, looking to buy fully finished products. Private houses of 160-200 SqM became too big and expensive, whereas before they were still in demand. People stopped looking at buying from blue prints. Selling a house was now dependent on having all utilities connected. What you see is what you get vs buying the dream on paper. Naturally this affected the financing potential of developers. To sum up: What developers had produced became in many cases useless and unwanted. What consumers really looked for was not to be found in ample quantities.
How do you see the real estate sector in 2012 in comparison with 2011?
I believe that those who are developing the right type of housing, with the real demand in mind, will start emerging from a flat period as soon as the public will feel more comfortable in going out there to purchase or rent properties. People need housing, want to make transitions but the leap from a 35-45 Sqm 2 room old block unit to a 90 Sqm 2 or 3 room apt with all the related monthly costs is to steep and unaffordable.
The evolution of the real estate market in Romania in the next 5 years?
While I see a growing need for affordable housing at a better quality than the old blocks and houses, much is dependent on the State navigating the economy in terms of being friendly to investors, developing infrastructures, indirectly creating jobs. I indeed see that since 2003 until now big progress has been made by all governments. You can’t ignore what you see outside and not only coming from the airport to the center. Not all should be taken for granted. However, since the country was one of the last in East Europe to emerge I would hope that reforms and other motivating strategies would be expedited in order to catch up.
What about the plans of Adel Invest in Romania?
For the time we are focusing on the properties we have in Bucharest, Ploiesti and Galati. We expand to a city that is not too far based on a project that justifies the resources to be dedicated. Currently, we are looking at developing a residential neighborhood in Giurgiu but it is in a very early stage. We are not doing large projects. We prefer to cater to foreign investors as we always did because this is our upside value. Right now Adel is in the last phase of refurbishing a historical building in the Lipscani zone (Centru Vechi) on Selari Street. In the Pantelimon area after having built and sold 4 houses we are now about to complete 4 more. After the success of the first stage we have a plan to build 32 houses in gradual stages under a unique strategy we have developed. Also, we plan to grow our property portfolio in the next 3 years and hope that at one point we’ll have a diversified business with recurring revenue that we’ll either keep or sell to a younger generation. We are also looking to make joint ventures with other property management companies.