Blake Horsley, head of the investment and office department ofColliers International real estate consultancy, says Romania mustcome up with a nice economic story to regain its appeal in the eyesof major real estate investors, who have forgotten Romania despitethe significant price adjustment.
Horsley also says that the high price paid by the developers thatbought land in 2006-2008 could be "amortised" only by completingsome low-cost constructions.
Thus, this year, some investors are likely to start works forcertain projects to avoid bankruptcy, considering that in order tobuy land many of them resorted to banking loans that have in themeantime fallen due.
"Some developers will go bankrupt unless they start projects in thecoming period. Some will think this year that the money lost bypurchasing the land at a high price may be recouped from the profitgenerated from constructions and thus reach break-even. When itcomes to profit, they may make it in 15-20 years, if they keep theprojects," Horsley believes.
In early 2011, some mall and shopping centre developers announcedthey would embark upon some projects that have been "abandoned" inthe past two years, both in and outside Bucharest, but overall thereal estate market still has few active investors.
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