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Florin Furdui
Country Manager Romania
Portland Trust

02 July 2021

Portland Trust is a commercial real estate developer and asset manager established in 1997. It operates in Romania and the Czech Republic primarily across the offices, light industrial and retail segments. In Romania they bear the mark on several landmark office projects, such as Floreasca or Oregon Park. 


Your career has multiple facets, what eventually led you to working in real estate, and more so to staying true to it?

Even though my educational and professional background is in IT, I realized fairly swiftly upon my university graduation that my deep interest in working with people.  Upon a 20 years career in the IT&C field I changed the tide in 2008 and started my career in real estate. Back in the ‘90s I was working for ING and I really enjoyed the whole process of finding a HQ (Opera Center). Fast forwarding to 2008, I  have joined Portland Trust, after coming across the right partner at the right time to do so with.

Portland Trust is only operating in Romania and the Czech Republic – why these two markets?

Despite the impressive value of our investments, we are a small entrepreneurial team, benefitting from a long-term collaboration with US-based fund manager ARES. Because attention to detail is our motto, it would be impossible to reach excellence in a more widespread team and across too many jurisdictions. In real estate the devil is in the details, so we chose to concentrate our efforts only in the capital cities of Romania and the Czech Republic, the two markets we are most familiar with and that we believe in.

How do the two CEE capitals compare in terms of demand and challenges surrounding accomplishing high-level projects?

Both cities have room left for growth and attractive yield potential. Procedures wise, although the local Romanian administration is seen as troublesome, when we compare it with the Czech Republic, we see that things in Romania are really streamlined. In Prague, it's normal to wait three to six years for a building permit, while in Bucharest the process is normally more efficient. It's generally agreed that Bucharest has tremendous prospects at the moment with a fast-growing economy and a proactive population, this was the core characteristic that attracted us here. Prague is a somewhat more mature market and benefits from more international attention.


Bucharest is still working on fixing a twisted higher risk perception from international investors. My personal opinion is that this perception is influenced by the faulty political decisions made in the ‘90s. Against the backdrop of the 2008 financial crisis, this negative perception grew even deeper due to opportunistic investors who destabilized the real estate market. However, nowadays this discrepancy is only artificial.


Perception aside, there are some genuine challenges on the local market as well, what tops the list for you?

The main challenge lies in finding the right investments in which to put our trust and money, and where all stakeholders are aligned. We like to move fast and sometimes the local authorities do not. For example, seven years ago, when we built Oregon Park, we dealt with unexpected traffic management issues. Today they are still not completely resolved and have required a significantly  increased supplementary investment and management time from our part. Sometimes in Romania developers are put between a rock and a hard place when collaborating with public institutions. It is vital that the authorities instate a transparent and responsible decision-making system. 

Other than a well matched collaboration with local authorities, what else do you look for when selecting the “right” investments?

Because we are in the premium sector, we always look for valuable assets that can sustain this standard. When choosing a plot to build offices we are looking for infrastructure and public transport routes, safe vicinities and, of course, long and fast leases that lead to healthy profit margins and an exit in 3-5 years from the initial investment. 

Portland Trust's Romanian portfolio consists primarily of offices - did the global pandemic effect on the sector push you towards changing your strategy, or digitizing at a faster pace?

Indeed, an important part of our portfolio is concentrated on offices, but recently we also invested in renewable energy through a 131.25 MW photovoltaic project planned for 2022. In real estate we maintain our faith in the office segment.. For sure, many businesses were impacted, but the truth is that the rent collections in the A-class sector have not been solid and will continue to be so. Thanks to our "risk averse" investment model, we didn't have wasteful transactions. EXPO Business Park is 90% leased and J8 Office Park stands at 70% occupation with 3 months before the actual completion. And flipping the effects of the pandemic to a brighter side, 2020 was the first year we had 100% Romanian workforce on our building sites, thanks to the massive repatriation wave. 

All in all there will likely be some delays, but the class A office demand on the Romanian market will keep rising once the pandemic will be under control. It has become clear offices that don't offer modern facilities (fresh air and increased ventilation, purification technologies, spacious elevators, no touch, etc.) won't survive on the market.  Both EXPO Business Park and J8 Office Park stand at the top of the range in this respect, J8 being the first office building in Bucharest with ‘medical-grade’ standards. Digitalization is a valued friend, at J8 Office Park for instance we use an AI program that generates dynamic plans to support our tenants to cope better with the challenges of hybrid models for the new work environment. 

Taking a look at the next two to three years, what are the ambitions you're pursuing with priority?

Finishing the projects that are in progress at the moment (Expo Business Park and J8 Office Park) is definitely one of the short-term goals. Finding new opportunities on the office market is another plan we are constantly pursuing, as well as developing the photovoltaic energy sector we've just recently started investing in. Also, the niche industrial sector we cover is on the list of future priorities.

Do you have a final message for potential investors on the local market?

As I've constantly underlined throughout our discussion, if you look at it without false prejudice, the Romanian real estate market packs in great value. For more than 20 years, Portland Trust has successfully operated in this bountiful economic environment, so tier one investors can do the same.

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