Eurohypo, the first bank that arrived on the Romanian market to exclusively focus on the release of solid financing for the real estate sector, plans to grant loans worth 200m euros in the first year in business in Romania.
"Eurohypo had been testing the market for 2-3 years, but last year we decided to open an office here and in November we registered it. This is not our first contact with the Romanian market since Eurohypo has already sealed here, directly from Germany, two deals worth 40m euros," Fulga Dinu, Eurohypo manager for Romania and Bulgaria, told ZF.
"We release cross-border financing directly from Germany exclusively targeting the commercial and not the residential real estate segment. In principle, there are large projects, such as office buildings, shopping galleries and sometimes hotels, worth above 15m euros," explained Dinu.
For the Romanian market, Eurohypo will allocate development loans for the construction periods, which, after the end of such periods, turn into long-term investment loans falling due in 15-20 years. "We are speaking of financing exclusively destined to large real estate projects, not retail ones, because this is Eurohypo's strategy internationally," Dinu also said. The German bank's strategy both in Romania and in Eastern Europe is to release financing through representative offices.
"We are focusing on deals and volumes of 20-50 million euros, which unfortunately are quite few now. Our financing target for the first year of activity on the market revolves around 200 million euros," stated Dinu.
Bucharest is not Eurohypo's only target, with the bank also eyeing major cities with a real estate growth potential, such as Cluj-Napoca, Iasi, Constanta, Timisoara, Brasov.
Eurohypo's Romanian office will have four employees at most in the next six months, with the bank being in talks with its first potential customers.
Dinu considers the bank's main advantage is that it has already had a contact with the Romanian market. She believes the main factor that appealed to Eurohypo is that the Romanian market is relatively undeveloped and there's huge demand for office buildings, shopping centres and logistic centres. "I think we will witness a boom on the domestic market over the next 3-4 years, but it will be a while before we catch up with Poland or Hungary. The market will stabilise afterwards and then probably move downward. I can maintain, though, that there will be no problem with high-quality properties," stated Dinu.
Dinu specified the Romanian office would also operate in Bulgaria, for which the bank has not set any financing target, yet. Eurohypo owns assets worth 240 billion euros, being Germany's fifth largest private financial group. Commerzbank group holds 98% in it, with the rest of 2% being listed on the Frankfurt Stock Exchange.
Eurohypo
The first bank that arrived in Romania to exclusively release solid financing for the real estate sector
Intends to grant 200m-euro loans in its first year of activity in Romania
Is targeting not just Bucharest, but also major cities with real estate growth potential
Its office in Romania will have 4 employees at most in the first six months
It has been mainly drawn to Romania by the fact that the market is relatively undeveloped
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