Lessons from MIPIM (regarding Romania)

• The “passion for Romania” is still very strong. Too many investors interested, too   many projects “on the way”, too many nice ideas still coming up. The only difference comparing to the past is that the investors nowadays are more conservative, they have heard many stories about the country and they will move only when something really good comes up to their attention.

• The companies which are already players in the market are very aggressive and they just ask to find the right property in a normal price. They simply don’t pay what each crazy person may ask, but they proceed immediately for everything good that comes up. They know that the demand exists and it is really strong, this is why they will continue to be aggressive in the market. (A really good sign, I would say…)

• The presence of the country was more emphasized than ever. A nice luxurious stand was hosting the city of Bucharest and 7 major developers, the number of visitors from Romania was the biggest than ever, more exhibitors from the country and also 2 brokering companies, the only ones from the Balkans. My company, MORE International Invest, and Neocasa, belonging to the president of real estate agencies, mrs Cleciu. In the same time, I met many other agencies, which really left very good impression to the businessmen and the investors. Companies like Real Time, Cagead and more, added points to the country’s overall image.

• (Now you will ask me why I mention other companies which are “opponents”. Simply because 1. The sun rises for everyone. 2. Being there, they did their best and Romania needs every serious company which tries to upgrade the status of the market. 3. I appreciate and respect all the good works, especially when they come from companies with history and good past.)

• Surprisingly I had very big interest for income properties, I can easily raise 1 billion euro for the right ones. I really didn’t expect this to happen and I was happily surprised to find out that a big queue of investors are still looking at the Romanian market, despite the low yields that the market is offering today. The new important message that came up for this category of properties is that the investors do not think anymore about investing in a property whose income is less than 7% per year (the “ultra special” cases may reach 6.5%, but in Romania all people present as “ultra special” something normal, sometimes not even that and they get really upset when you tell them the truth).

• I expect the logistics sector to reach maturity faster than any other segment of Romanian market. Really too many new projects are in the pipeline, while the serious players are preparing for the final phase of their major expansion. And when I say expansion, I am talking for hundreds of thousands or couple of million of sq.m. around the country. The demand for space is expected to cease in the upcoming years and the investors who intend to enter in the market after 2009 will really face serious problems in renting their sq.m. to AAA tenants with the right contracts.

• The market of shopping malls, retail boxes and other retail developments looks quite strong at the moment and we had many new companies (or existing ones) interested in developing projects. This year we expect almost all the cities to be covered by projects and the market will go to its final stage, which will be bigger and bigger projects fighting to capture the market share of the smaller ones. I will tell you in another day about my opinion for the future of this market, but today it is really booming. What is very interesting is the fact that we have many experts in commercial development being involved, so the majority of the projects will be placed in the best possible way.

• The market of offices has interest in the Capital but also in other major cities too, with investors looking at projects located from Iasi and Timisoara to Cluj, Brasov and Constanta. Inside Bucharest the situation seems to remain the same, with the demand higher than the supply, but with the prices of rentals to be much different than some crazy asked ones. The risk gets higher when we go out of the city centre and in MIPIM this was more than clear in the words of the investors and developers. Major projects are still interesting and there is much more product to enter the market.

• Last but not least, the residential sector. The majority of the investors is targeting to the middle class, a wise choice for the “present and the future” of Bucharest. With the right price, there will be no problem for any number of developed projects. Ofcourse the problem is that the supply of lands which combines all these is really limited. But, as my company had a carefully selected portfolio of properties, we didn’t have any problem to capture the attention of people with very good sites. The future in the residential market of Romania is more than bright, especially if it will be combined with serious and well planned developments.