Investments worth billions of euros, along with the presence of world-class investors, as well as the fact that Romania is one of the main targets for investors in the region are some of the main factors behind the booming financial results being witnessed by companies on the local real estate market.
Real estate consulting companies are witnessing an approximately 20% profit margin on a market nearing 50 million euros this year, also influenced by the fast growth rate witnessed throughout the entire country.
The local real estate market is on the brink of booming. This extends beyond local investors, as there are many foreign investors who have either started projects worth hundreds of millions of euros, or are testing the waters with smaller projects.
Once on a new market, the investors' first dealings are with real estate companies and then law firms. However, some may choose to go the other way around, from consultants to investors.
"First of all, one must draw the line between the real estate consulting market and the market of small agencies and firms who speculate on the market. It is difficult to find 10 consulting companies on the current market. I think the total value of the market reached 35 million euros in 2006. In 2007, it could reach 50 million euros," stated Bogdan Georgescu, Managing Partner of real estate consulting company Colliers. The company posted 11.9 million-euro turnover in 2006, alongside a 2.83 million-euro profit, and is the main player on the Romanian real estate consulting market.
Developments on the local market in 2006 prompted Colliers' business to experience an over 100% surge, from 5.2 million euros. Profit also soared, by over 200%, from 0.8 million euros in 2005.
"The rental of office spaces continues to be the strongest sector in terms of generated revenues, with an almost 30% market share, followed by land sales and investments (real estate transactions). The residential, retail, consulting and industrial departments, in turn, all make important contributions," added Georgescu.
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