{"id":6120,"date":"2011-02-21T09:54:55","date_gmt":"2011-02-21T07:54:55","guid":{"rendered":"http:\/\/http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=6120"},"modified":"2015-01-26T20:16:44","modified_gmt":"2015-01-26T18:16:44","slug":"commercial-retail-segmentsrestart-the-romanian-real-estate-market","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2011\/02\/21\/commercial-retail-segmentsrestart-the-romanian-real-estate-market\/","title":{"rendered":"Commercial \u2013 Retail segments restart the Romanian Real Estate market"},"content":{"rendered":"

\n\t(As I keep on telling you since 2009…)<\/strong>\n<\/p>\n

\n\tIt was spring 2008 when I restructured my company's activities for the first time. The second (and final) one occurred in spring of 2009. It was announced to the media in a press conference back then, plus in the launching of my first book about Romania, in English language.\n<\/p>\n

\n\tAt that time I kept on explaining that the retail and the commercial sectors would be the only ones in which transactions would occur:\n<\/p>\n

\n\tJune 2009: "Properties which generate income will be the majority of the few investments that I expect to finalize"<\/strong>
\n\t"Properties which generate income will be the majority of the few investments that I expect to finalize. These are the only ones that might convince a bank to approve a loan for buying them. Why? Because they seem to have a clear "pay back strategy", through the monthly revenues".\n<\/p>\n

\n\tJune 2009: "Retail chains already started their expansion plans. Once they find lands at attractive prices, we will see transactions in this segment as well"<\/strong>
\n\t"The prices of lands are still very high, but they will fall. When they reach again lower levels, you will see some major investors returning. Among the first ones you will find the retail chains, which already started their expansion plans. Once they find lands at attractive prices, you will see important transactions in this segment as well".\n<\/p>\n

\n\tNovember 2009 (After MAPIC): "Welcome to… 2011!" <\/strong>\n<\/p>\n

\n\tAfter my presence at MAPIC exhibition, in November 2009, I told you once more exactly the same, considering 2010 as a "lost" year:\n<\/p>\n

\n\t"Everyone is talking about 2011. 2010 is considered a "lost year". Major companies have decided to freeze any opening of new outlet during the next 13 months. They expect that next year we will reach the bottom of the crisis, with the available consumers' income falling to its lowest level throughout the decade 2001 – 2010".\n<\/p>\n

\n\t(read the whole article about "Memories from MAPIC", on November 20th<\/sup>, 2009, here<\/span><\/strong><\/a>)\n<\/p>\n

\n\t2009 – 2010: Only major transactions were related to income properties and lands<\/strong>
\n\tDuring the past two years, the market was almost idle. The few serious transactions happened only in these segments, exactly as described above. Except NEPI fund and its major acquisitions of office buildings and retail parks, most of the other important transactions were related to lands (at discount price) and income properties with high yields.\n<\/p>\n

\n\tAs my company was involved in lots of similar transactions, I can tell you one thing: We had been discussing for tens of different investments and plans. But only these 2 categories were the ones which finally brought the investors to the notary's table. Only for income properties and lands I saw the papers getting… inked.\n<\/p>\n

\n\t2011: Romanian Real Estate market restarts from Retail – Commercial segments<\/strong>
\n\tThis year started with more optimism, as I had analyzed to you during the previous weeks. Things are not expected to be "super", but they look like being slowly improving. This does not mean that the prices of properties should see any increase (especially in the residential sector), as the demand is still very weak, but there are some things that have changed.\n<\/p>\n

\n\tThe most important change is again the expansion plans of companies involved in the domains above. Retailers and developers (plus gas stations chains) who bought lands at attractive prices prepare now to launch projects worth hundreds of millions of Euro\n<\/p>\n

\n\t(you can read a relevant analysis here<\/strong><\/a>)\n<\/p>\n

\n\tNow there is real interest<\/strong>
\n\tBucharest, Constanta, Brasov, Craiova, Arad, Iasi and Oradea are already announced in the media. In the same time I confirm to you that my company works for similar projects in another 2 cities, except Bucharest. It is not easy at all, we consume hundreds of working hours in order to move on with a project, but there is a major difference comparing to the past: Now there is real interest. It is stronger and more concrete than the past.\n<\/p>\n

\n\tAgain, all major projects are connected to properties which generate income. Coincidence? I don't think so<\/strong>
\n\tAll these projects, retail parks, shopping malls or commercial galleries, are strictly focused on one direction: To generate income, to provide a measurable tool for the bank to evaluate the risk and the payment back.\n<\/p>\n

\n\tIs it a coincidence? I don't think so. It is the only way to access big sums of (borrowed) money nowadays (provided ofcourse that the bank has money to lend).\n<\/p>\n

\n\tWhat is going to be the impact in Romanian economy?<\/strong>
\n\tIn the beginning it will be minor. But once the investors will start paying the construction costs, the situation will slowly change. But this is very important, because only when people start investing again, the economy will enter into real, healthy, positive path. All this money will generate taxes, jobs, incomes for other people and the economic chain will move again. Plus they represent the first sign of trust to Romania, after a long period of doubt for the country's potential.<\/strong>\n<\/p>\n

\n\tWhen are we going to feel the difference?<\/strong>
\n\tOnly in 2013! If you remember, this is exactly the result of my analysis regarding the market and what will happen this year and the next one (you can refresh your memory here<\/span><\/strong><\/a>).\n<\/p>\n

\n\tAll these projects need 18 – 30 months in order to finalize. Ofcourse you will hear people telling you that they will finish fast, but most of them will face "unexpected difficulties" and they will delay. This is not a problem. The important is for the "engine" to restart. And this will be visible only in 2013, after the completion of these projects and the start of many others.\n<\/p>\n

\n\tSo did we finish with the crisis?<\/strong>
\n\tNo, but we started making steps towards the right path. It takes long time, hard work, many factors to be positive (and some luck) in order to change the market's direction.\n<\/p>\n

\n\t(Next Monday I will share with you the big risk we face, which can actually block the recovery process).\n<\/p>\n

\n\tTomorrow:
\n\tWhy so many new retail projects now? What do retailers know, that we don't?<\/strong>\n<\/p>\n

\n\tOn Monday, 28.02.2011:<\/strong>\n<\/p>\n

\n\tCan sick mentality poison the recovery process?<\/strong>\n<\/p>\n

\n\tOn Tuesday, 01.03.2011:
\n\tWhat is going to happen with new residential developments?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

(As I keep on telling you since 2009…) It was spring 2008 when I restructured my company's activities for the first time. The second (and final) one occurred in spring of 2009. It was announced to the media in a press conference back then, plus in the launching of my first book about Romania, in […]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[216,17,236],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/6120"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=6120"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/6120\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=6120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=6120"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=6120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}