| Northrop Grumman,
the large American construction firm is already in the market constructing
new homes along with scores of other European and international building
firms of reputation. As leaders in their industry, they are fully convinced
that the projections for suburban Bucharest will become a current reality.
The savvy world
investor, according to surveys, now identifies Romania as one of the top
three investment locations in the world (along with China and Brazil) and
the number one opportunity in Europe. Foreign Direct Investment in Romania
is at roughly 3.5 billion dollars currently tied only with Czech Republic
for the number one spot in Central & Eastern Europe. Decreasing investment
rates there and expected investments in Romania will most likely push Romania
on top.
Tesco and Walmart
have already announced plans to follow in the footsteps of European giant
Carefour to enter this thriving market.
Unemployment
here is at just 6%, one of the lowest rates in all of Europe. Combined
with a low per-head personal debt, more spending cash, and the introduction
of credit an amazing new consumer based society is being built.
Statistics
show that inflation is low and GDP is high (three times higher in many
cases then in Western Europe) in Romania.
The vision
of the Bucharest metropolitan area is quickly becoming a reality.
Farmland near Bucharest will soon resemble suburban Detroit or Chicago,
complete with modern family homes, shopping complexes, and modern highways.
This phenomenon has already occurred in some areas outside of the city
limits.
2,000 square
meters plots of land can now be purchased in the new suburban district
of Bucharest for 40,000 Euro (That about $48,000 USD). That' s about $20
per square meter in a city where downtown prime real estate is going for
as much as $2,000 a square meter and property in the currently developed
suburban region goes for between $150 and $350 a square meter. Between
now and the years proceeding the EU ascension of Romania (analyst predict
Romania
will join in 2007 -2008 and growth will continue at impressive rates up
to about 2010) property prices in the new suburbs should increase at least
30% per year.
The key to
realizing profit is to buy land in an area where developers are looking
to build in a strategic location, where other like-minded investors have
also invested in land. This is where a reputable estate agency comes into
the picture. As they usually have direct relationships with developers
and have a keen understanding of where to buy, they more then earn their
5% or so commissions.
New structures
have now been put in place to allow foreign investors to invest in land
without formation of private companies (foreign citizens may not own raw
land as private individuals) and the process of forming a company for such
a purpose is now a relatively expedited one - when you are working with
someone who knows what they are doing.
Deals most
absolutely exist outside of Bucharest as well. The long term investor should
also consider naturally stunning land located in proximity to up-and-coming
ski resorts in Transylvania and incredible bargains at the excellent vineyards
located between Bucharest and the aforementioned ski resorts. These opportunities
represent excellent investment opportunities but often requires a longer
"hold time" on the investment to reap full potential returns.
More details
on those properties, as well as on opportunities in Bucharest are available
for readers by contacting me directly.
One final piece
of advise - the majority of North American investors who have contacted
me come with a sound American mentality related to real estate investment.
No doubt, this mentality is tried and proven in America and represents
a very successful model for property investment on that continent. Europe
and Eastern Europe in particular represent dynamically different markets
that require the investor to approach an investment in this region with
an open and teachable mind.
This has caused
a much higher success rate among European and International investors to
date in Romania then for American ones.
The tried and
true model for cashing in on the amazing changing face of Romania and particularly
metropolitan Bucharest, tweaked and perfected by professionals from the
West operating in this region, has proved to be the best model to follow.
Perhaps the
Irish
Times article, summed it up best ".... the key thing is to have good
contacts, local knowledge, and someone here who you can trust."
Romania
presents the opportunity to make extremely profitable investments in a
future superstate of the European Union. It represents the transformation
of a nation where 30% of the population has never turned on a light, into
a Western cosmopolitan nation at a maddening pace. Under control, this
chaos can be extremely profitable for the savvy investor.
For articles
on Romania by Kevin Stillmock see below:
|
