Comment: Cinderella’s metamorphosis - The most dynamic residential areas in Bucharest
Guest writer Georgian Marcu goes over the latest residential developments in Bucharest.
Almost a year ago, in an attempt to make a thorough analysis of the real estate market in an article entitled ‘Residential – Cinderella of the real estate market’ I wrote that ‘the only notable investments have been made in the office segment.’ In the spring of 2013, not a single noteworthy investment had been registered in the residential market in the northern part of Bucharest, even if the dynamic development of office spaces should have brought about a considerable growth in the housing department.
But many things can occur in nine months. I suggest that we make a quick review of the events which have taken place in this area lately in order to determine if anyone has ‘discovered’ Cinderella.
City Point from Aviatiei (Aviation) Area: Shikun&Binui and Red Sea Group have made a public announcement six months after the beginning of construction work saying that more than half of the 45 apartments from the first building have already been sold – a project begun in April 2013.
One United Properties, a company owned by the shareholders of Capital Partners, has initiated the construction of the Madrigal Residence Project, a project of 3.200 sq. meters, which will be concluded in August 2014. In terms of sales in the new project, in November, there was only one apartment with three bedrooms available. This is no surprise after having sold the project One Floreasca Lake entirely, a project which comprised 42 apartments with a view towards the lake.
In the Primaverii Area there are no less than six projects under construction! Out of the six projects, two are developed by investors who will most likely set new quality standards in the area, if we are to take into consideration the projects developed in the past.
Welkept Real Estate has under construction on the Primaverii Boulevard a 5-storey building with 18 apartments. For the time being, the developer is still pondering on what to do with the apartments after completing them: whether to sell or rent them. Raptis Kavouras has for sale a property located at the intersection of Primaverii Boulevard and Moliere. The 7-storey building has one apartment per level, with areas ranging from 138 and 380 sq. meters plus terraces, and within the price range of EUR 650,000 and EUR 1.8 million.
In the Aviatorilor & Kiseleff areas there are five-six projects, completed or in the last stage of completion, and three-four under construction. This is another area where a growth in quality standards is noticeable in the developed projects in comparison to the already existent buildings. The increasing quality is also visible in the sales in as much as the apartments from the last finalized project have higher prices (beginning at EUR 650.000) compared to the other projects where the sales are weaker, even if the prices are lower by 30 percent.
One Development, a company associated in media articles with the ‘famous’ Greek investor Ioannis Papalekas and Dragos Bilteanu, started in 2013 two projects, one in Floreasca, with 23 apartments and one in Pipera with 36 apartments. It is interesting to note that on the company website, under the New section, there are three projects listed as being under way in the northern part of Bucharest.
Also in Pipera, Vista Development, a company owned by the businessmen Florea Diaconu and Alessio Karkhi, develops a premium project with seven furnished villas which sell for prices beginning at EUR 550,000. The same company is developing the Vista Village Concept, a project of 42 villas in Corbeanca, as well as the largest residential complex announced after 2008 – the Vista Residential Concept, which will comprise 1,000 housing units and 100 commercial spaces in the southern part of Bucharest.
Cosmopolis, a project undertaken by Opus Land Development in Stefanestii de Jos, has announced the construction of 450 living spaces in 2014, after it has invested more than EUR 7 million in 2013 for the completion of 260 housing units.
But not only the Northern Bucharest has witnessed a fast development and high sales in the last months. Happy situations (or natural, depending on how we look at it) have been encountered in other areas of the Romanian capital.
The extended economic crisis we go through triggers a cheaper price in properties, but it also makes them highly sought, consequently the southern part of Bucharest remains the most dynamic residential area, with tens of projects underway and sales to match the customer requests.
According to the Top Sales in new apartments, developed by Wall-Street.ro, the highest sales registered in 2013 were recorded in the following projects: Militari Residence (60-80 apartments per month), Confort Urban Rahova (350 apartments), Metropolitan Residence (300 units), Cosmopolis (260 units sold and 60 rented), Appolo Residence (250 units sold), Cartierul Latin (Latin District) located in Prelungirea Ghencea (150 units sold), Brown Residence (150 units sold), Rin Grand Residence (130 units sold), New Town, in the Dristor area, (over 100 units sold and 50 rented), and Rose Garden, in Colentina (95 units sold).
Among the projects which have entered insolvency, we should mention the sales made by the Transilvania Insolvency House, valued at EUR 11.2 million in 2013, for Alia Apartments, and those of Euro Insol, a company which has announced the sale of 113 apartments valued at around EUR 10.2 million in its two years of reorganization.
BDO Business Restructuring, the judicial liquidator of Cortina Residence located in Baneasa, pa roject developed by Cefin Real Estate, has managed to sell the project for EUR 5 million, in August, last year.
There are three main conclusions resulting from the aforementioned facts:
In 2013, Cinderella has been courted especially by Romanian developers, particularly in the ‘cheap’ areas.
The stock of apartments resulting from the projects developed in the boom period is almost exhausted.
In the premium areas, the new developments are superior to those from the boom years and this is noticeable in the sales as well. It is crystal clear that in order to sell, the developers with inferior projects will be forced to adjust their prices a lot.
In other words, Cinderella is not as covered in dust as has been depicted by the media.
By Georgian Marcu, guest writer