Valentin Croitoru: “9% yield at least for a transaction of a commercial property”

Last week some of the top Real Estate experts (mainly the ones who were not still in vacation) gathered in Bucharest to discuss about the market, in a very interesting and successful event. I refer to Europaproperty’s SEE Commercial Real Estate Forum and the Awards Gala that followed.

One of the participants there was Mr Valentin Croitoru. Working in Romanian Real Estate business since 2000, he is managing partner at in a real estate agency and I consider him one (and some of his colleagues that I met) of the serious people, with great potential and already a lot of experience collected.
I asked his opinion regarding the event and his comments are the following:

Last week you have participated to the Europaproperty’s SEE Commercial Real Estate Forum and the Awards Gala. How would you compare it with 2008 edition?
“If I were to describe in a few words both events I would say: in 2008, after a year of 2007 full of requests for developments in all real estate segments, everybody was talking about real estate transactions, about how we can start new real estate business, how to get good financing products, how the state must sustain the real estate investments through infrastructure projects, the idea in a word was ”hurry”. In 2009 the idea in two words was ”patience” and ”rebuild”.”

What was the key message you consider that came out of this event?
“The key message of the event was: ”back to the basis and rebuild a solid market”.”

Based on the feeling you received being there and hearing all the speakers, which is the market’s direction for the upcoming period?
“We know that the real estate market was and will be always a real engine for any economy. So we must go back to the basis for a solid market development, represented by the feasibility  studies, by a correct profile for the targeted client and by low risk ”exits”.”

Are there any investors interested in purchasing properties in Romania today? What is the minimum acceptable yield by them?
All the investors are keeping close to the Romanian properties until they will receive good finance products and the yield will be bigger than 9%.

Does this yield refer to any property, or is it the minimum acceptable for the best possible property (thus all the rest should have higher yields so as to be sold)?
The yield refers to any property.  The purchasing of a property or not, will be decided by feasibility studies, by how big is the beginning of the investment for a development and by the buying power of the targeted client to achieve the product.

Based on your personal and your company’s activity, how would you describe the first half of the year? What are your expectations for the second half of 2009 and the first half of 2010?
“The first half of 2009 is and will be characterized by ”wait and see” from every real estate market player (investor, developer, client, owner, agent, bank…. In the second half of the year we are hoping to see new financing products to give to the final client the possibility to buy and thus closing the purchasing chain. The year 2009 will be the hardest year in the real estate market since 1999 till now. Many players will close their businesses, new players will come, with the know-how and prepared for smaller but real profits.
I would close with a quote I believe in: ‘The wheels are rolling, with or without us.”

(Mr Valentin Croitoru is managing partner at Real Time Imobiliare)