Romanian insurance companies are not at all indifferent to the real estate boom that has taken over Bucharest and the other big cities over the past two years. The market's biggest insurer, Allianz-Tiriac, will invest 11-12 million euros in real estate this year.
Most of the money will be directed towards the company's own headquarters, but Allianz-Tiriac is also considering investments in residential or office buildings.
"This is a good time to start investing in real estate. We have an investment plan worth 14 million euros for 2004, of which 11-12 million euros will go to the real estate sector. Our company is growing and we are in need of offices," said Cristian Constantinescu, the company's general manager.
The investments will be made by ASIT Real Estate, a company controlled by Allianz-Tiriac.
Other companies will also operate in the buildings to be purchased by Allianz-Tiriac. Thus, as it will have buildings to let, Allianz-Tiriac will become a player on the real estate market.
The company's real estate portfolio was worth 20.4 million euros at the end of last year, according to an assessment drafted by PricewaterhouseCoopers.
"The value of our real estate investments amounted to 16 million euros during the previous year. The growth was solely fuelled by the increasing market value of these buildings," Constantinescu added.
Insurance companies, especially those selling life insurance policies, have a lot of money available that has to be directed towards long-term investments, and the real estate sector fits this profile. In the West, the large investment companies also own office and apartment buildings, as well as their headquarters, and the same trend is expected to occur on the Romanian market.
"This is indeed happening in the West, but in a more sophisticated manner. The insurers put their money in investment vehicles, which issue bonds for the buildings in their portfolio, meaning that the money is not invested directly. In Romania, we still have what is called 'raw real estate', namely direct investments in buildings," says Emilia Bunea, a financial director at Interamerican.
Interamerican's real estate investments stand at around 3 million euros, including its Bucharest headquarters.
Almost every big insurer in Romania has its own headquarters, due to their significant cash flows.
Omniasig, Asirom, Astra, Unita and Ardaf all own their headquarters - either new or renovated buildings. Asirom has even invested in a seaside hotel and owns a club in central Bucharest. Asiban has recently invested in new headquarters, whereas Generali plans to build its headquarters in Bucharest, a project that will also be funded by the European Bank for Reconstruction and Development (EBRD).
Experts predict that insurers will be heading towards real estate, even if this trend won't become apparent very soon.
"No definite trend for insurers to invest in real estate has yet made itself apparent. However, we expect this trend to manifest itself in the near future, as these companies will certainly become aware of the multiple advantages they can obtain from this type of investments," stated Doru Sterescu, manager of the Investment and Land Department of real estate company Eurisko.
sorin.pislaru@zf.ro
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
