Interview with Ovidiu Sandor, owner of the Modatim group in Timisoara
Ilias Papageorgiadis: You have closed one of the most important transactions in the Romanian Real Estate sector of the last few years (an office complex in Timisoara sold to NEPI). Many people say: “I never sell a property”. You decided to accept the offer from NEPI. What convinced you to take the offer?
Ovidiu Sandor: The decision implied taking into account many factors and the offer we received was well within the plans of our project’s investors.
IP: Many owners believe that “once a client is interested, the transaction can be concluded quickly”. How long did the process take in your case? Could you share your experience?
O.S.: 9 months passed from the start of the negotiations until the end of the transaction. For someone like me that was involved in his first major transaction, I can say that the process is very demanding, with many people involved (the two parties were joined by lawyers, financial and fiscal consultants, the financing banks, etc.) The work volume was big and it involved approaching and resolving tens of issues, aspects, details. I want to mention also the role played by consultants in this process, one that could not have been finalized alone or only with my company’s team.
IP: You were one of the first businessmen in Romania that adopted the “green” concept . Did “Green building” help you sell at a higher price? Did it bring the added value that you were expecting?
O.S.: I’m certain that if we didn’t have a truly sustainable project, including in this respect, we would not have generated this kind of interest. Of course that it is difficult to estimate the influence of this particular aspect in the transaction price but I’m certain that there would be no price (no transaction) if we were talking about only a few “good”, “ok” buildings. The entire concept, the architecture, the quality of the tenants, the green building concept were contributing factors in making our project stand out and reach the quality that it had. Particularly in the current context, the high quality of the project is the one that attracts the interest of an investor.
IP: Your projects are known for their high standard of quality. When you implemented them, this was an additional cost. Ultimately, was the investment worth it? Is it worth investing in quality projects in Romania?
O.S.: Of course that a high standard of quality entails a higher cost, an investment you undertake knowingly. We built with the objective of having an office complex that will be competitive in 15-20 years as well and that will have a high standard of quality then as well as now. You can’t plan a serious real estate business if you don’t invest in quality. Particularly in the “new” economy. I think that projects with a low level of quality can’t find tenants, financing and certainly not a buyer.
IP: How do you see the Romanian real estate market evolving this year? Have you decided if the next project you will develop will be a real estate one as well?
O.S.: This year is a complicated one all over the world, for all industries. But I still think there is potential in Romania on certain real estate segments. However, we need to see how the economy will evolve in Europe. I think I will continue to invest in real estate but I don’t think I will limit myself to this area. We’ll have to wait and see.
* the interview was taken on the 29th of March 2012