Paradox of real estate crisis: Biggest company on RASDAQ is a real estate business
The real estate sector and the capital market have been among the worst hurt by the crisis in the last three years. However, real estate companies have been less affected than other sectors, such as industry and constructions, and have become some of the most valuable entities on the RASDAQ market.
Generalcom Bucureşti (GECM), controlled by French businessman
Alain Bonte, currently has the biggest capitalisation on RASDAQ, of
over 300 million RON (70 million euros), higher even than in 2007,
before the crisis, when both the Stock Exchange and the real estate
market were at all-time highs.
Unirea Shopping Center (SCDM), the company held by Dan Adamescu
which owns Unirea shopping centre in central Bucharest, is valued
at nearly 200 million RON (46 million euros) at present, around 45%
less than in July 2007.
How can this paradox be explained?
One reason is that these companies are not real estate developers,
which have in fact been significantly hurt by the crisis, they are
instead companies that own real estate assets and make revenues
from renting them out. Second, most of them inherited high street
stores in big cities, which means they have little trouble finding
tenants.