BCR is one of the most prominent banks in Romania, with a history of over 30 years and operations across several divisions, including but not limited to leasing, assets management, private pensions, housing banks and real estate financing.
To start off, could you please explain how the real estate sector fits into the broader portfolio of BCR Romania?
Real estate certainly has an important share of the portfolio both in Romania and in the region, but we attentively select the projects and pay increased attention to construction quality, sponsors' experience and future potential of the building. We have a strong focus on the commercial sector: offices, industrial and retail. Residential segment in on our agenda for near future, with special attention on energy efficient developments.
We are mainly interested in big tickets, with solid capital, as they are more reliable and with a higher impact on the sustainability of metropolitan areas.
On average a big ticket in Romania for prime projects has a value between EUR 50 million and 150 million. Unfortunately, out of all projects, only 10-15% are of high quality and with increased attention to details, so the target is extremely specific for us, especially since we have multiple selection criteria.
You mentioned several criteria when assessing a project, including construction and sponsor quality. Are there any specific aspects that you can highlight?
High value projects usually have specific certifications: energy efficiency, life quality inside the building, a design aligned with the last trends etc. It is highly important to approve loans only to buildings that are sustainable, high quality of building materials and decreased impact on the environment. These kinds of projects are considered attractive for the market in the long term. Sponsor quality translates into solid experience on the market, especially in prime projects. We are open both to international and local investors - our goal being to sustain the local market as much as we can and to support those investments that focus on wellbeing and building communities.
At the moment you have no residential clients in your portfolio, even though the segment thrived during the pandemic. What is the reason behind this and what does the future hold?
We are closely analyzing the market as it tends to become more mature. Some properties are reaching a higher quality in building materials, and we see more projects developed in a sustainable manner, in phases and that thrive to coagulate a community around them (schools, parks, facilities, etc.). We are confident that this will happen in two-three years at a larger scale. At this point in time, the market is dominated by budget projects (First Home program), but as the income rises so does the purchasing power and clients will understand that quality of living is important. In the long run the maintenance cost becomes highly important, thus the shift towards sustainable properties will increase. All in all, we are interested in this segment and we are waiting for the right moment to jump on the bandwagon and support flagship developments.
The pandemic affected offices and retail sectors the most - how did this propagate into your activity?
We kept close to our clients and didn't change our attitude towards the market in any shape or form. We didn't block or postpone projects, rather we continued our day-to-day tasks as per usual, so we managed to maintain an excellent transactions level.
Since our portfolio is based on high quality projects, we suffered only a minor impact caused by the pandemic, very few of our properties being marginally affected. Only a small number of our clients accessed the benefits offered through Government Emergency Ordinance. Retail, entertainment and office sectors will slowly but surely recover in the coming months because, ultimately, peoples' innate need for socialization prevails. As such, economic growth is looming over the horizon.
Looking at the coming two-three years, what would you say are BCR's main objectives in terms of real estate?
Enhancing even more the quality of the assets and projects we are financing is one of the main objectives that comes to mind. Also, attracting high caliber investors that have just entered the market and investors that are being present inside the most important real estate projects are points of interest. One major focus is to support prime green projects to rise and provide the support for extensive refurbishment towards energy and maintenance efficient projects.
Do you have a final message about the real estate market in Romania?
Romania offers a great deal of bountiful opportunities, but investors need to be physically present here in order to feel the market and take advantage of them. No matter how saturated the market might look, a good quality product will always find its clients and, bottom line, there is enough room for growth on the long run.
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