ALB: Leasing market to rise 50% in coming years

The leasing market is expected to maintain its 50-55% growth rate over the next few years, with the fastest growth rate estimated for the segment of real estate leasing, according to the general secretary of the Leasing and Non-Bank Financial Services Association (ALB), Adriana Ahciarliu.
Last year, the level of funding granted by leasing companies stood at 3.26 billion euros and could reach 4.6 billion euros this year.
“ALB estimates, and those made by Leaseeurope (the European Federation of Leasing Company Associations i.e.) show that Romania has the highest development potential in the field of real estate leasing, because there is a very high demand for funding in this sector,” says Ahciarliu.
While in 2003, real estate leasing accounted for less than 1% of the overall market, at the end of the first half of this year, funding for the real estate sector accounted for 7%, with ALB estimating it will increase its share to 10% in 2008.
The bulk of this funding is dedicated to the construction of office space – 54%, with the remaining amount separated between the construction of commercial space – 34%, and the development of residential projects – 12%.
“The share held by real estate leasing will rise to the detriment of auto funding, which continues to rise from one year to the next, but only in terms of volume, rather than in terms of market share. In the coming years, auto leasing will largely be incorporated into operational leasing, which offers full fleet management services,” explains the general secretary of ALB.
Another sector of the leasing market expected to continue to register rapid development is equipment leasing, which now accounts for 25% of overall funding.
“This niche will develop alongside the various economic sectors. For example, real estate development requires equipment, the acquisition of which can be financed through leasing,” adds Ahciarliu.
Leasing companies financed a total of about 2.17 billion euros in assets in the first half, a 46% increase on the corresponding period of 2006.