Auto leasing is passA©. Brace for real estate leasing!

People used to associate leasing with a way of buying a car without paying customs duties. Then, companies realised they could buy industrial equipment in leasing. But why not buy a whole plant or an office building in leasing?
Realty leasing contracts worth 200,000 dollars were closed in the first half of the year, accounting for less than 0.1% of the total leasing deals. Considering the share of this type of contracts on the European leasing market (20%), the untapped potential of this segment is huge.
“The extremely low value of real estate leasing in Romania at this time is mainly triggered by legislative shortcomings,” says the chairman of the National Union of Romanian Leasing Companies (UNSLR), Ioan Ban. According to Ban, although a stronger increase of this segment had been projected for this year, growth will only occur from now on, as the necessary legislative framework has just been adopted.
There are two possible scenarios for developing realty leasing. “On the one hand, there is the traditional leasing of an already built structure, which system is the best for now, as there are too many production and storage spaces,” says Iulian Marin Ion, lending director with Demir Romlease.
The second scenario, which is deemed as the most interesting by analysts, will be the building’s construction in leasing, especially considering the big-size real estate projects scheduled for the next years.
“Commercial banks have made the first step toward funding the purchase of buildings when they started granting mortgage credits,” says Cornel Coca Constantinescu, deputy chairman of UNSLR. This segment has witnessed a surge this year and, according to Constantinescu, it is just a matter of time before this kind of growth becomes apparent on the leasing market, as well, especially since leasing is aimed at big projects.
But why go to a leasing company and not to a bank? For the same reasons why people would rather buy a car in leasing: the file is processed much faster, the company’s indebtedness remains at the same levels, while the customers can change their mind in the end and say no.
However, given the big value of contracts, the timeline is too tight.
“There are many investors willing to sell in leasing, but not so many customers, because the credit must be returned in a quite short period of time. The timeline should be more relaxed, somewhere around 8 or 10 years, similar to the amortisation period,” says Radu Lucianu, commercial department manager with realtor Eurisko Consulting.