Foreign investors present on the Romanian market but with no intensive real estate market activities in the past two years, are keeping an eye on properties which are to be foreclosed by banks, as their owners are incapable of repaying their loans. Thus, investors are lying in wait for substantial discounts from the lenders who will sell these properties. “Foreclosed properties will appear on the market. Lenders will want to sell them and will offer large discounts. At the same time, the bank will need help for asset management and we may get involved in such partnerships,” said Gijs Klomp, Managing Director on Romania of ING Real Estate Investment Management (ING-REIM). The local representative of the German ECE Projektmanagement company, Radu Merica, is interested in continuing developments begun by foreclosed companies. Real estate projects with the highest risk of failure are those in an early stage of construction, with wide exposure on bank loans. The mall retail segment is presently most affected, due to the large amount of money needed for such development projects. Moreover, companies which had projects exceeding €50 million, such as in the case of malls, need to restructure their plans. “Loans of over €50 million are not financeable because banks cannot syndicate,” said Perry Zizzi, Partner of Badea Clifford Chance law firm. Players on the local real estate market are expecting the first significant bankruptcies as of the second half of 2009, considering some companies will become insolvent. “Few companies will survive the summer, a period which has always been dead. Expenses will bury many enterprises,” said Andrei Diaconescu, Partner of the Capital Partners investment company. (A.U.)
