Horsley, Colliers: Real estate investors will keep off until economy picks up

Blake Horsley, head of the investment and office department of Colliers International real estate consultancy, says Romania must come up with a nice economic story to regain its appeal in the eyes of major real estate investors, who have forgotten Romania despite the significant price adjustment.
Horsley also says that the high price paid by the developers that bought land in 2006-2008 could be "amortised" only by completing some low-cost constructions.
Thus, this year, some investors are likely to start works for certain projects to avoid bankruptcy, considering that in order to buy land many of them resorted to banking loans that have in the meantime fallen due.
"Some developers will go bankrupt unless they start projects in the coming period. Some will think this year that the money lost by purchasing the land at a high price may be recouped from the profit generated from constructions and thus reach break-even. When it comes to profit, they may make it in 15-20 years, if they keep the projects," Horsley believes.
In early 2011, some mall and shopping centre developers announced they would embark upon some projects that have been "abandoned" in the past two years, both in and outside Bucharest, but overall the real estate market still has few active investors.