George Doholici, the general manager of Jules Verne Imobiliare, the real estate developer, which is building 10 million euro block of flats in Bucharest, says investments in IT and real estate are the most profitable on the domestic market at the moment.
“In France, the profit rate related to the real estate sector has reached 3-4%, and this may happen in Romania, as well in 10 years. For the time being, though, real estate investments are among the most profitable in Romania,” says George Doholici.
The company will invest 10 million euros in a residential project located close to Piata Unirii in the centre of Bucharest, and the funds will come from the company”s French associates, as well as from banking loans.
“Six months after we purchased the plot of land, its price surged by 70%, in line with banking assessors. For us, it would be profitable to sell the land now, take the money and leave. But we do not want to speculate, we want to invest,” adds George Doholici.
The plot of land the block will be built on (works are scheduled to start this April) has about 1,500 square metres and was acquired last June. Doholici chose not to disclose the purchasing price.
The block will have a surface area of 8,000 square metres distributed over 11 storeys, of which two are subterranean. A number of 47 flats and 64 subterranean parking spots will be built.
The flats will have a built area ranging between 60 and 270 square metres and a sale price estimated at 1,300 euros per built square metre not including VAT.
“With this project, we are targeting three types of customers: persons with average and above-the-average incomes, multinationals or joint ventures wanting lodgings for their expat employees and investors in real estate who do not buy flats to live in them, but to trade them on the market,” specified Doholici.
He also says Jules Verne Imobiliare will develop other similar projects in the future, located in Victoria Square and Mosilor, as well as commercial buildings.
“The prices of flats located in the old buildings of the capital city are already too high and will stagnate or even fall on the medium and long term. Instead, plots of land situated in areas with a high growth potential will witness exponential price increases. Even Bucharest districts that are less highly regarded, such as Colentina and Pantelimon, will have new blocks with prices the medium segment of the population can also afford,” Doholici also specifies.
On the other hand, Doholici believes, the northern part of the capital city, particularly Pipera, has almost reached saturation in terms of real estate developments.
Jules Verne Imobiliare is 70% held by CIFE French group, with global turnover worth above 250 million euros. George Doholici owns 10% in the company, and the remaining 20% belongs to a French-Romanian firm.
Toward the medium segment
* The first residential projects development on the Romanian market addressed the luxury sector
* As demand for projects on the luxury sector is dwindling, developers are increasingly focusing on the medium sector
* Plots of land situated on the outskirts of cities are the most wanted for the development of residential projects, while land plots located inside cities
are more difficult to find and have increasingly higher prices