“The dramatic impact of the crisis will be felt in real estate. Developers will think twice before launching new projects, but I think they will finalize the projects they have started. Maybe they will not manage to sell them, so they will lease them and will need furniture,” the President and founder of Mobexpert furniture producer and retailer, Dan Sucu, told Business Standard.
The Retail Manager of IKEA’s local branch, Cornel Oprisan, agrees that the impact of the crisis will not be visible on the local furniture market this year. “There are houses that are yet to be finalized, so the furniture and accessory markets will keep growing, although at a slower rate,” Oprisan said. He estimates that the market will increase 10-12 percent this year.
Furthermore, retailers could be impacted by higher rental fees. Developers of commercial centers where furniture retailers are operating could increase rents, due to higher financing costs. Developers usually borrow money from banks to finalize projects and the financial crisis has led to more expensive lending. “The interest rate is very high at the moment. When one gets used to 5 percent interest for euro [loans] and this rises to 10 percent, one needs a period of adjustment. So developers will try to cover for the extra costs by increasing rent prices,” Sucu said.
The local furniture market was estimated at some €1.2 billion in 2007, according to association of furniture producers. This is expected to grow by some 10 percent in 2008.
