The big real estate transactions have rarefied against last year

The situations in which will be paid tens of million euro for land will be less this year against last year. The limit could be quartered to 68 million euro, sum that represents the value that was paid for 1,63 hectares from Satul Francez (French Village), located in the area of Herastrau Park in the north of Bucharest. The value can increase if there turn up for sale building plots with big surfaces in the central area.

According to the real estate consultants, it is unlikely that in the second quarter of this year to be signed a real estate transaction more profitable than the one from Satul Francez (French Village). At the middle of July, Costica Costanda sold to the real estate developer Raptis Kavouras almost 1,63 hectares for 68 million euro. “The respective transactions closed, because the dynamic of the lands from the northern area is different against the rest of the Bucharest, and the luxury segment it isn’t obstructed”, Bogdan Cornigeanu, director of the land department within the real estate consulting company Neocasa, mentions. The main reason for this situation is given by the fact that the financing for developing real estate projects is obtained with difficulty. “In the periods in which there are financing problems the big real estate transactions are the first affected. Even the big developers are facing with financing problems. It’s a period, so that the developers that say that they don’t want to sell say non-senses, because it isn’t anymore what it was. The developers don’t sell land because nobody buys it”, Calin Clinciu, director of development within the group of real estate companies Euroest, details. In these conditions, this year it is possible to be signed several real estate transactions amounted between 10 and 20 million euro.

The consequence of this situation is that the developers that have big surfaces of lands but on which they don’t afford to build will wait to have enough financial power to start working. Another variant, in case in which they haven’t started the project is to associate with an investment fund. These variants were adopted by the real estate developers and by the investments funds yet from last year.

It’s possible, if…

Cristian Toma, broker at the real estate consulting company Coldwell Banker Affiliates of Romania, estimates that for this year will surely be transactions on the segment of the lands whose value won’t exceed the one of the Satul Francez (French Village). Moreover, Cristian Toma stakes also on touching values of over 100 million euro, sum that could be paid only by an investment fund. “The ones that buy these lands are the big developers, but together with the investment funds or development banks. The developers can’t involve on their own in big projects and especially that credits for buying lands with big values aren’t anymore so easily granted”, Bogdan Cornigeanu, completes the terms in which this type of transactions with land could be signed.

One of the lands for which it could be paid over 100 million euro is, for example, the tramway shed from the area of Victoria Square, located behind Victoria Palace. The lot has a surface of 3,5 hectares, and the prices in the area are over 5.000 euro/ square meter, according to the real estate agents. As a matter of fact, of two - three years, lands whose value exceed 100 million euro, but that haven’t been sold yet are being negotiated on the market. “Nobody risks anymore to buy a surface of 100 million euro and to build 10.000 houses, till the real estate market doesn’t recover”, Bogdan Cornigeanu adds.

Another land that could be sold this year for a bigger sum is the one on which is situated the bread plant Lujerului, at the crossing between boulevard Timisoara and boulevard Iuliu Maniu. The lot has a surface of over 3,58 hectares. A square meter varies between 800 and 1.500 euro, so the price could reach from over 28,68 to more then 53,78 million euro. “For a big land the price in the area varies between 700 and 800 euro”, Clain Clinciu mentions. So the transaction value would worth about 27 million euro.

Nothing unusual

According to the real estate agents, generally, the period of negotiations for selling a land varies between two and seven months. “This type of negotiations can also vary between 12 and 18 months. Not necessarily the period of negotiations is longer, but the time required for making the feasibility studies for project and the periods required for elaborating the studies type ‘’due dilligence’’ juridical, respective technical for property, take a lot of time”, Valentin Croitoru, Managing Partner, within real estate agency Realtime explains. The only thing that was prolonged is the time for finding a buyer in order to begin the negotiations.

Residential, retail, industrial

The lots bought in the north of the capital with prices of over 50 million euro are used for luxury residential ensembles. The ones from Raptis Kavouras, the buyers of the lot from Satul Francez (French Village) have also chosen this type of variant. They have announced that they will build on those 1,63 hectares a residential complex with  350 apartments, the asked price being of 5.500 euro/ build square meter.  Moreover, these intend to build a luxury commercial gallery with a surface of 5.000 square meters. Besides the residential, Cristian Toma mentions that 50 millions euro could be also paid for the lands directed to retail projects and for the logistical parks.