More feedback for Bucharest’s Old City
* the article was first published on the 16th of November 2011
Hello to everyone from Cannes! As MAPIC has just opened its doors, my team is already inside and our meetings have started.
I will be able to tell you more about it tomorrow, so today I would like to share with you my interview for Romania Insider, regarding Bucharest’s Old City, a topic that looks very interesting for many of you, if I go by your comments and messages.
“Only half renovated, Bucharest’s Old Town is years away from full development
The Old Town part of Bucharest, also known by the name Lipscani after one of the streets in the area, has seen great development over the past years, and most of it was for leisure – you’ll find a high density of bars and restaurants on its pedestrian streets. It has become one of the most vibrant parts of the city, but its development cycle is far from being complete. It would need around three to five years to fully develop, after the street revamping will end, most buildings will be renovated and investors will be mature enough to know what to invest in, Ilias Papageorgiadis, CEO of More Real Estate tells Romania-Insider.com. His company has recently issued a report that analyzes this area of Bucharest.
Around half of the properties in Bucharest’s Old Town are still not refurbished, a very high ratio that would normally decrease by 5 to 7 percent each year, Papageorgiadis says.
The half that has been renovated hosts mostly leisure units, and less than a third is covered by retail. The tenant mix is made of 57 percent leisure, 27 percent services and 19 percent fashion, found a recent report issued by More Real Estate. There are only two hotels in the area. “I find it quite difficult to see many new hotels opening in the area in the near future, as the prices are already very high and the possibility for someone to create a feasible project is limited,” he goes on.
What can increase in the normal evolution scenario is retail, adds Papageorgiadis, who thinks the expansion of only restaurants and coffee shops is wrong.
Less than one third of property owners are foreigners, while Romanians dominate the area. Apart from the the biggest owner in the area – the Bucharest municipality- there are less than 20 large owners. Most of the properties in the Old Town have not been sold more than once or twice. “Right now the interest of foreigners is multiplied, but I doubt they find many opportunities to invest,” Papageorgiadis also says.
The average rental prices in the Old Town went down from EUR 55 per sqm in 2008, reaching EUR 35 in the first half of 2010, only to go back up again at EUR 45 in the first half of 2011, triggered by strong demand, according to More Real Estate.
Corina Saceanu
November 2nd 2011 – Romania Insider”