Russian investors silently turn to Romanian real estate haven

The Russians are coming. Increasingly more Russian businessmen are looking for a safe haven in other parts of the world, Romania included, because of their country’s grimmer business environment, which is now the stage of a political-financial scandal involving Russia’s richest businessman Mikhail Hodorkovsky, President Vladimir Putin and Premier Mikhail Kasyanov, together with other high-profile politicians and businessmen. In fact, the exodus of Russian businesspeople may have started when Roman Abramovich decided to leave the country.

“In the past nine months, many Russian managers have been asking for our help in order to start businesses in Bulgaria, Romania and Hungary,” a Moscow banker said recently. “I can see what is happening now. They had started to liquidate their businesses in Russia.”

Cristof Ruehl, chef economist of the World Bank in Moscow, estimates that, after the massive capital inflows posted in the second quarter of 2003 (worth 2.3bn dollars), the net capital outflows amounted to $9.8 billion in Q3 alone.

Infrastructure is capital for any new business, so that the investors must first pay a visit to a realtor, in order to look for a piece of land or some office space.

“We have seen increased interest from the Russian investors, as they are noticing the opportunities provided by the Romanian real estate market and are planning to make the most of these opportunities. We couldn’t say for sure whether the Russian investors suddenly displayed more interest in the Romanian market at the exact same time Mikhail Hodorkovsky was arrested. At any rate, this interest is real and lands are preferred, followed by office space, hotels and commercial spaces,” says Ionut Dumitrescu, general manager of real estate company Eurisko.

Alexandru Nitescu, head of the Projects & Investments department at realtor Regatta, confirms the Russian investors’ increasing interest in Romania, but believes that the effects of Hodorkovsky’s arrest will only become apparent later. “The globalisation trend has naturally led to the arrival on the Romanian realty market of the buyers from the former Soviet Union countries, Russia mainly. Interest in real estate followed interest in the Romanian economy, as several Romanian enterprises had been bought by the Russians. It is too soon to be talking about an investment exodus, since the major moves will only show effects in a couple of months,” Nitescu says.
dorin.oancea@zf.ro