ROMANIA PROPERTY CLUB

Leading Sustainable and Innovative Real Estate Development in Romania

1,000 hotel rooms internationally affiliated to launch between 2024-2028

1,000 hotel rooms internationally affiliated to launch between 2024-2028 2560 1919 ROMANIA PROPERTY CLUB

Constanta, one of Romania’s main touristic destinations, continues to attract the interest of hotel investors and operators, but still flies under the radar, as compared with other regions.

Based on the supply of hotel rooms, Constanta city (including Mamaia) can attract demand for medium quality hotels and services. This trend is about to change in the next 3-4 years due to economic shifts in the area (NATO military base and Schengen space for Constanta port). The new highway (Constanta – Olimp) connecting with the southern part of the seaside is also expected to bring new opportunities for tourism developments.

CONCLUSIONS FROM EST HOSPITALITY
  • 69% of total number of rooms are ranked to 1*, 2* and 3*;
  • only 300 rooms are ranked to a hotel operator (ie Ramada and Continental Hotels) which represent less than 3% from total number of rooms;
  • increase in the number of arrivals +3.4% and overnights +6% in hotels for 2023 as compared with 2022;
  • major decrease compared to 2022 for arrivals -9.90% and overnights – 7.9% in apartments for rent because of offer excess;
  • new international brands such as Crowne Plaza & Radisson enter Constanta market;
  • 1,000 hotel rooms internationally affiliated are under development in five hotels.

“With the inauguration of the new hotels, in the following four years the number of rooms will increase by 8.3% Major hotels operators will also enter the market giving a vote of confidence for the Romanian seaside.” 

Increased traffic accelerates investments at Constanta Port

Increased traffic accelerates investments at Constanta Port 1657 1080 ROMANIA PROPERTY CLUB

The historically high traffic posted in 2023 – over 90 million tons of cargo – provided further incentive to central authorities to upgrade existing facilities.

The main goods shipped through Constanta are cereals (38% of the traffic), seeds, iron minerals, steel cast, oil products, and fertilizers.

Most recently, the Ministry of Transportation announced massive 1 billion EUR investments for Constanta Sud, meant to upgrade Wharfs III S and IV S and add 17 new deep-sea berths, 155 ha of operating area, and 36 ha of logistics platforms.

Infrastructure investments for the port sum up to 1.5 billion EUR. The “Administration of the Sea Ports” National Company recently organized a 108 million EUR bid to upgrade the road access points to the port. Furthermore, there is a schedule to upgrade rail infrastructure and deploy new trains. For financing, the Government is reaching out to both internal and EU funding and pursues PPPs with Middle Eastern and South Korean investors, to enhance global trade partnerships and unlock new commerce routes.

GREEN PORT MASTER PLAN & QATAR ON THE AGENDA

Authorities of Constanta Port announced they are working on the “Green Port Master Plan”, taking in consideration the requirements of the Alternative Fuel Infrastructure Regulation (AFIR) and FuelEU maritime regulation, proposed by the European Commission.

The PIONEERS project, which takes place over five years (2021-2026), has received funding under the HORIZON 2020 program, the Green Ports as Multimodal Hubs for Sustainable and Smart Mobility axis, which aims to support ports to meet the European Commission’s requirements on transition to climate neutrality by 2050.

Romania’s PM, Marcel Ciolacu met in April 2024 his Quatar counterpart, Seik Mohammed bin Abdulrahman bin Jassim Al Thani, the Romanian official declaring a target for Romania to become Quatar investments bridge towards European Union, with projects worth of 15 billion EUR under analysis.

2023 – ANOTHER HISTORICAL YEAR FOR CONSTANTA PORT

After the 12% increase in 2022 over 2021, 2023 brought another record high for the annual traffic, reaching 92,5 million tons, a 22.5% increase over 2022.

Maritime traffic increased by 18% YOY, up to 71 million tons, and river traffic increased by 40% compared to the previous year, reaching 22 million tons.

Cereals remained at the top of traffic increases, with more than 50%, surpassing 36 million tons in 2023, compared to 2022 when 24 million tons were recorded.

Regarding Ukraine, the total traffic of goods was 25 million tons in 2023. Ukrainian grains that transited the port of Constanta represented more than 14 million tons.

One United Properties invests in second phase of Mamaia project

One United Properties invests in second phase of Mamaia project 2560 1602 ROMANIA PROPERTY CLUB

Following the success of the first phase of the complex, One United Properties has obtained the construction permit for Phase 2 of the One Mamaia Nord complex, with a total built area of approximately 17,000 square meters, currently under development.

One Mamaia Nord currently consists of two residential buildings bordering the Black Sea beach: Phase 1 completed in 2022 and Phase 2 under development, with estimated delivery for Q2 2025.

Both buildings are constructed according to similar criteria and share an architectural unity, with dual orientation: the main one facing the sea and the subordinate one facing the access and the lake.

The apartments have frontal or lateral sea views and a free height in rooms of about three meters, premium finishes, natural stone, and glass closures on the terraces, with permanent security and video surveillance.

This development benefits from an elegant contemporary design, with high-quality finishes and all the advantages of green buildings, such as: durable materials, energy efficiency, low-pollution installation systems, excellent indoor environmental quality.

Iulius adds Constanta on investment map

Iulius adds Constanta on investment map 1024 1033 ROMANIA PROPERTY CLUB

Following major regeneration projects in Iasi, Timisoara and Cluj-Napoca, real estate investor Iulius works on a complex development in Constanta. The project is based on a partnership between the investor and Oil Terminal on a 38-hectare plot of land centrally located, close to the port and train station.

The land used to house storage areas for petroleum products and remained unused for the past 10 years, because the previous activity impacted the quality of life in the nearby residential areas. Iulius has taken on the greening process, one considered essential and obviously beneficial for the entire community.

The main construction activity in the sector was driven by local companies, which opened or extended a series of production facilities (in consumer goods, construction) and DP World. The newly delivered RO-RO facility integrated with a logistics hub in Aiud to facilitate transportation for Romanian exporters producing in the West side of the country and the new warehousing capacity were the main developments in the county in terms of industrial and logistics. The construction of a logistics platform of 110,000 sqm was also started, an investment of 50 million Euro, which will be completed next year. “Romania is a dynamic economy and well positioned to benefit from the growth of the nearshoring sector and production,” said Rashid Abdulla, CEO and Managing Director, DP World Europe at a recent company event.

“The project in Constanța is the most ambitious undertaking of Iulius so far, the target being to offer the local community a useful project, accessible to all. The project will have multiple functions, with the potential to become a regional business hub, but also a destination for all categories of the public, for the entire year”, said Raluca Munteanu, Development Director, Iulius.

The city attracted the attention of the investor due to the excellent and unique connectivity: by sea, land and air. The concept which combines numerous and varied functions within the same project will offer multiple perspectives to the inhabitants of Constanța, but also to tourists or the business environment, who will have a new interest area in the city.

Untapped potential for logistic sector in Constanta

Untapped potential for logistic sector in Constanta 2560 1662 ROMANIA PROPERTY CLUB

The Constanta logistics market is still pending solid demand in order to grow and match the economic prospects the county is promising.

The stock of modern warehousing remained similar to 2022, close to 150,000 sq m. The main development – Constanta Business Park is conserving efforts pending more consistent tenant demand, whereas the new development announced by Olympian Parks is under the permitting approval process, expected to start this year. WDP did not announce any new developments at its two sites – in Agigea and Mihail Kogalniceanu.

The main construction activity in the sector was driven by local companies, which opened or extended a series of production facilities (in consumer goods, construction) and DP World. The newly delivered RO-RO facility integrated with a logistics hub in Aiud to facilitate transportation for Romanian exporters producing in the West side of the country and the new warehousing capacity were the main developments in the county in terms of industrial and logistics. The construction of a logistics platform of 110,000 sqm was also started, an investment of 50 million Euro, which will be completed next year. “Romania is a dynamic economy and well positioned to benefit from the growth of the nearshoring sector and production,” said Rashid Abdulla, CEO and Managing Director, DP World Europe at a recent company event.

Accession to the Schengen Area, the decrease of insurance costs for naval ships transiting the Black Sea, as well as diversification of global commerce routes should boost the logistics sector development in Constanta.

The prime asking rent for modern warehousing in Constanta is 4.3 EUR/sqm.

Security, energy and infrastructure investments open new development paths for Constanta

Security, energy and infrastructure investments open new development paths for Constanta 2560 1706 ROMANIA PROPERTY CLUB

Constanta continues its journey as a leader region for Romania, enhancing its strategic role at the Black Sea. The 775,000-population county is a critical place on the map where double-digit billion EUR private and public investments are pursued for the next decade. Energy, agriculture, maritime transportation, and security are its main strengths, along with being one of the main tourist destinations of the country.

In terms of infrastructure, developments include both government-led initiatives and the private sector. DP World, one of the operators of the Constanta Port completed a 65 million EUR investment. The Ministry of Transportation announced massive 1 bn EUR investments for Constanta Sud, meant to upgrade Wharfs III S and IV S and add 17 new deep-sea berths, 155 ha of operating area, and 36 ha of logistics platforms.

The strengthening of Constanta as a security provider for the entire Black Sea region continues through outstanding new investments in a mini-city near the Mihail Kogalniceanu military base. Works for the project spanning over 2,800 ha broke ground this year. At maturity, the estimated 2.5 billion EUR mini-city will insure housing for up to 10,000 security officers and families, and educational and healthcare infrastructure. This shall be one of the most significant NATO military bases in Europe.

Along with being one of the key ports at the Black Sea and playing a tremendous role in the defence of Europe, Constanta is one of the most impressive energy hubs in Europe. In addition to previously announced 7 billion EUR investments in extending the Cernavoda Nuclear Power Plant capacity by two reactors (extra 1412 MW installed power), the most awaited development is Neptun Deep. A 4 billion EUR joint venture between Romgaz and OMV, expects to receive the building permit for the operation of the off-shore facility that will transform Romania into the largest gas producer in Europe.

Another key development for Romania’s energy leadership is the recent regulation regarding the off-shore law. According to the World Bank, Romania can produce 76GW per year through off-shore wind parks. Legal clarity incentivizes investors to deploy capital in a predictable environment. Along with neighbouring Tulcea, Constanta is a home base for on-shore wind parks. Only in Q1 2023-Q1 2024 more than 1750 MW were approved by Transelectrica, along with further strengthening of the existing photovoltaic parks base. Constanta plays a strategic role in green and fossil fuel production and processing, export, and import of energy and petrochemical products.

Moreover, the 565,000 ha of agricultural land place Constanta at the top of the charts in terms of performance. In 2022, the total output of agricultural production and services exceeded 90 billion EUR, based on livestock, poultry, cereal, vegetables, seeds, fruits, and wine farms. More than 130 companies lead agricultural development, some of the most notable companies being Ameropa, Agricola, JD Agro, and Ostrov Winey. Public investments in the irrigation system helped producers manage crops during dry seasons.

Tourism is one of the economic pillars of Constanta, with 1,574,064 visits in 2023. In addition to the beach appeal, visitors are drawn in by cultural events such as rock and folk concerts, and major festivals (Neversea).  The upcoming 30 km of Techirghiol Alternative Route highway to be finalized in 2027 shall serve two major scopes. First, economic contribution to the tourism sector, as it eases traffic during peak summer months. Secondly, it shall ensure a speedy plug-in to the road infrastructure in Bulgaria and the connection to the Greek Alexandroupolis port – a key node for defense infrastructure delivery to Romania.

Other notable public investments in Constanta are the new Water Heating Plant (125 million EUR, secured through NRRP funds), multi-sports arena with 5,000 seats (70% completed, to be delivered in 2024),  the new Gheorghe Hagi stadium (18,000 seats, 80 million EUR financing memorandum approved), 7 million EUR upgrades to the Clinical Emergency Hospital (secured through NRRP), and a c.a. 90 million EUR new “Mother and Child” building backed by EIB. Recently completed improvements at the Mihail Kogalniceanu Airport led to a 44% increase in traffic, growth expected to continue as the full investment schedule rolls out.

The private sector announced significant development programs as well. Iulius Group revealed partnership for the 38-ha land with Oil Terminal for a large mixed-use development, while other residential and hotels investments are undergoing.

The dynamics of Constanta County led to a low unemployment rate of 2.1% and a growing average net income (933 EUR per month).

While still under the radar for some large real estate investors, due to massive investments in energy, security and infrastructure we consider Constanta an appealing destination for medium- and long-term perspectives.

How to plan the monitoring services? A guide for real estate investors

How to plan the monitoring services? A guide for real estate investors 2560 1603 ROMANIA PROPERTY CLUB

1.07.2024

There are several aspects that investors and developers should be aware of when it comes to geotechnical and structural monitoring services or monitoring the behavior of constructions over time. With the support of Sixense Romania, we have put up a useful guide:

  • Firstly, an excellent knowledge of legislation is required. Monitoring the construction behavior over time is absolutely mandatory, and the geotechnical and structural monitoring program is based on the technical project elaborated by the designer.
  • The monitoring activity should be planned from the feasibility and pre-feasibility stage. Already in the analysis phase, it is important to have all the information so that there are no surprises later on and no one is forced to „resolve” the situation on a minimal budget. If the monitoring activity is done just to be checked off, it is useless and does not really tell you anything about the health of the building.
  • When receiving and comparing offers, it is extremely important to compare them correctly. Of course, price is important, but equally important are: the real experience of the team that will be your partner in this regard, the expertise of its members, the focus on monitoring activity (and not on other add-on services), the interest with which they come to the table (beware of those who act only as intermediaries or equipment resellers, when the purpose of monitoring is by no means the sale of equipment), proof of compliance with certain quality standards, and especially certification as an authorized laboratory for construction analysis and tests.
  • Especially when talking about large-scale real estate projects, with critical structural and geotechnical risks, the recommendation for the developer is to contract directly the monitoring services – to a single specialized partner, with vast similar experience. Why? Because transparency and objectivity are needed from a third party, who can confirm the correctness of design hypotheses without other interferences. Also, the developer needs to have direct control over the quality level of the monitoring services delivered.
  • In the case of urban constructions, in areas with many neighboring constructions, it is recommended to also consider monitoring the influence zone. We recommend that, before starting excavation works, there should be an information campaign for the owners whose constructions are in the influence zone, to explain the benefits of monitoring works, to conduct a technical inspection or a survey of existing structural and non-structural defects in neighboring constructions, and to instrument constructions according to identified risks. Only in this way will we have the complete picture and all the data to help us protect the neighboring constructions, avoid difficult discussions about the existence of a certain impact on neighboring buildings, complaints to control authorities, site shutdowns etc.
  • The monitoring program should not just be checked off, done from the office, without any connection to reality or copy-pasted from other projects. It needs to be adapted to what is happening on the ground and absolutely necessary to be implementable, and provide correct, transparent data, based on which crucial decisions can be made.
  • As explained before, the monitoring activity should be done in execution, as well as in the operation phase. So it is important to implement a monitoring program on the long run, in order to make sure that you extend the total lifespan of a building.

All the above aspects should be taken into account when choosing a partner for monitoring the behavior of constructions over time in the real estate industry.

RPC Talks with Mariana Garștea, General Manager, Sixense Romania

RPC Talks with Mariana Garștea, General Manager, Sixense Romania 2560 1999 ROMANIA PROPERTY CLUB

RPC Talks to Mariana Garștea

General Manager, Sixense Romania

Profile of the company

We’ve been on the Romanian market since 2010, when Sixense Group, a global leader in the field, opened a local branch, primarily motivated, at that time, by a series of complex projects, including the First Section – Line 5, and Line 4 of the Bucharest metro.

Briefly put, we operate in the field of structural health of the built environment, or in other words, we provide expertise and digital solutions for monitoring the behavior of constructions over time, during both construction and operation.

Our portfolio includes numerous projects from various industries. We work both in the private sector, where we have significant expertise in office, retail, and industrial categories, and in the public sector, where we handle complex infrastructure projects – transportation, sports, or healthcare, to name just a few.

Most representative projects in the portfolio

Some of our most representative projects, to name just a few examples, are: the First Section – Line 5 of the Bucharest Metro, the Daneș and Sighișoara Tunnels, Line 4 of the Bucharest Metro, the New Agigea Bridge, Arcul de Triumf National Rugby Stadium, Steaua Football Stadium, Târnava Bridge, Ulmeni Bridge, Neo Floreasca Lake, Aviației Tower, The Light, Millo 6, Tandem, Sema Park, Țiriac Tower, Ana Tower, Green Court C, and many others.

Solutions for real estate sector

For real estate, we offer comprehensive solutions for monitoring construction projects over time, both during execution and in operation. What does this mean? It means that through what we do, we ensure that a project is safe, behaves as originally designed, and meets all quality standards.

During execution, we ensure that neighboring constructions are not affected and that all work on the new construction proceeds safely. And in operation, we ensure that the building behaves within parameters, is not affected by risks (vibrations, extreme temperatures, wind etc., to name just a few), and does not degrade (with the appearance of cracks or settlements, as frequent phenomena) or become a structural hazard to the community, given the natural aging process it undergoes.

Sometimes, when justified, monitoring the behavior of constructions over time may even involve implementing an automated, real-time monitoring solution. This means that sensors are deployed in the field, transmitting data to a digital platform, which automatically transforms them into valuable, useful information, easily understandable for all stakeholders involved in the project. Additionally, this system also entails real-time alerts whenever there is a danger or safety thresholds are exceeded. All of these help us intervene proactively, before a major incident or accident occurs. This process also helps streamline the investment and better plan maintenance and upkeep operations for a building.

Development plans

We are currently in a growth phase, but we aim for this scaling to be as healthy and sustainable as possible, without compromising the quality of services we offer and the work we do. In 2023, our business grew by 50%, and we are pleased to have now a team of over 25 people, which has doubled in the past year. Also, our concern for quality and the rigor of what we do – especially because we work with sensitive and critical information for the current state of the built environment – has led us to certify on several ISO standards, aiming to align internally with the same work standards. And when I talk about these certifications, it’s important to say that for us, they are not just obtained „on paper”, but we actually follow all the procedures, protocols, and recommendations that come along with them.

And because we are aware that the people in our team are the most important in the work we do – with their ability to be partners, to explain and guide – we focus heavily and invest in training and development, in order to provide them with all the skills they need to carry out their work in the best and most customer-oriented manner possible. In our profession, in addition to exceptional mastery of new technologies and a deep understanding of technical information, soft skills and good interaction with others are also needed.

Many important things are coming up for us this year, both in terms of developing our office in Bucharest and the projects that await us. We will provide more information very soon about all of these.

FIA Imobiliar BT Property enters the retail market

FIA Imobiliar BT Property enters the retail market 1600 1200 ROMANIA PROPERTY CLUB

15.05.2024

BT Property Alternative Investment Fund has acquired Funshop Park Turda (Cluj) from the Polish group Scallier. The transaction marks the fund’s entry into the retail market, where it aims to expand.

Funshop Park Turda, a retail park, has over 9,000 sqm of leasable area and BREEAM certified buildings, according to international standards.

FIA Imobiliar BT Property, managed by BT Asset Management SAI SA, a company of Banca Transilvania Financial Group, is aimed at professional investors and is established for an indefinite period.

The fund was launched in 2022 and currently has assets of EUR 32 million.

Its portfolio comprises premium real estate in Romania with a leasable area of over 40,000 sqm. It is the first alternative investment fund specialising in real estate investments authorised in Romania by the Financial Supervisory Authority.

Brasov accelerates industrial & logistics development

Brasov accelerates industrial & logistics development 2560 1884 ROMANIA PROPERTY CLUB

16.04.2024

Brasov has been an interesting center of attention during 2023, with multiple new builds and announced projects. Both institutional investors and owner-occupiers made significant commitments towards the region.

Brasov is part of the Central region on Romania’s map of modern industrial & logistics premises. Out of the total 7.02 million sqm of national stock, the center region covers 680,000 sqm, half of it being in Brasov.

Owner-occupiers such as Olympus, Ursus, Bauer, and Foerch undertook significant investments towards adding processing, storing, and office capacity.

Olympus announced a 40 million EUR expansion into state-of-the-art cold storage, warehouses, and offices.

Ursus committed to investing over 50 million EUR for the next three years, featuring a new bottling line, warehouses, offices, and an extension of the production facility.

The top three institutional investors – VGP, WDP and CTP -have started a solid development pipeline, with a total combined build capacity of over 360,000 sqm.

VGP signed multiple new tenants, including a record of 47,000 sq m with Intercars, working on the automotive strengths of the region, and an 8,500 sq m lease with DB Schenker.

CTP announced a significant new investment in the city ecosystem, by signing a multi-stage growth lease with Diehl Controls, one of the major home appliance and HVAC production companies.

One of the pioneers of the industrial market in Brasov, ICCO, has 45,000 sq m under development, whereas NEPI Rockcastle has 23,000 sq m available to let in the wider county (Rasnov).

Urban logistics operator, Modulis, is preparing Phase II for go-to-market – 33 small warehouses to cover more than 20,000 sqm.

The authorities are quite involved in pitching to new investors, thus offering large industrial platforms suitable for development. While the former CET platform is still under review and clearing, in Prejmer the local governing body opted for a Public – public-private partnership with Spanish operators Graells & Llonch.

The site, originally an impressive 82 ha plot, has attracted residents, mainly SMEs and local producers, on more than 50 ha. Through residency, companies are offered incentives such as no property tax and/or deductions.

The prime asking rent for modern Class A facilities surged from a base of 3.6 – 3.85 EUR/sqm to 4.25 – 4.5 EUR/sqm, aligned with Bucharest prime rents.

Investments towards increasing the output are not only in facilities but education as well.

In partnership with the City Hall and the dual education center, Schaeffer invested 0.5 million EUR in 2023 in scholarships and meal vouchers to train personnel.

In 2024, the plans are to increase the budget to 0.7 million EUR and contribute to the material base of the class (specialized equipment).

Along with Schaeffer, 15 other companies are partners with the dual education center, among which Draxelmeier, Vitesco, Schneider, and Preh.

This is an outstanding example of aligning the corporate and the public systems to generate a win-win situation and contribute to the economic development of a region.

To unlock further value, investors are waiting for the streamlining of the new international network and for road infrastructure projects to materialize.