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Gabriela Dragulin
Head of Real Estate Finance
UniCredit Bank Romania

24 June 2021

UniCredit Bank is a leading European bank, present across 17 countries. It has 208 branches spread across the territory of Romania and is one of the main financial players that offer financing on the local real estate market.


You have been Head of Real Estate Finance at UniCredit Bank for 12 years - how did your career path lead you here?

20 years ago, I started my career in the risk division and after successfully completing various tasks here, I gained enough experience to pass to the next level and become the head of real estate finance. Since it involves high value financing, this job requires both selling and risk assessment skills, analyzing the project as a whole being a vital step when offering credit to developers. August 2009 debuted with the economic crisis and the financial environment greatly changed, negotiation and problem solving becoming important day to day tasks. A similar scenario is seen nowadays, in the context of the pandemic.

How does the real estate sector fare in the larger portfolio of UniCredit Bank?

Real estate has been a relevant sector in our company ever since 2005, when it first took shape. UniCredit was a go-to partner from the beginning, financing many transactions for local and international developers alike, and we continue on growing this portfolio as the market evolves.

You were mentioning similarities between the 2009 financial crisis and the 2020 pandemic, but how did it exactly affect your activity and the real estate market, as a whole?

The pandemic was an unexpected event and generated a totally unknown economic context, the real estate sector being especially impacted, it was quite different from the financial crisis of 2009. In 2020 we had to look at how we could in fact help our clients, following Government Emergency Ordinance measures and other regulations meant to mitigate clients' losses as much as possible. We analyzed all the demands that were asking for a grace period (negotiated interest, banking fees, etc.) and offered additional support if needed.


Fortunately, we have a healthy portfolio and we didn't encounter situations where clients weren't able to pay their loans. In fact, some of them even thrived and used the extra capital to pay their installments in advance.


The residential sector really managed to ride the wave and registered an amazing growth. Also, e-commerce became the star of the show and prompted a boom in the logistics sector. Office developers were pushed towards reinventing their spaces, thus giving way to new projects, and retail developers reoriented even more than before towards commercial centers (retail parks) where every shop has individual access directly from the parking lot.

As you mentioned, real estate sectors were impacted in different ways - how did this situation reflect on the banks’ appetite to finance the industry, and yours in particular?

For sure some banks became more cautious, but large financing remained open. For our side we are interested in collaborations with developers who know how to adapt to the new context and are planning their projects accordingly. Medium and large transactions prevail in our portfolio, so it's vital to collaborate with an experienced client with a good reputation and good creditworthiness. Evidently, the previous / existing relationship with UniCredit Group, with a positive track record, is of course an advantage. The same goes for availability of partial/temporary recourse structure. The experience and the presence of the developer/ investor on the local market are definitely criteria we look at when contemplating financing.

What are some of the most notable common risks when financing a real estate project?

The nature of risk depends on the development phase of each project - in an incipient stage there is a chance to go over budget or miss the deadline. It's vital that developers are able to cover their part of the cost, but also help the project in case some of the risks mentioned before do happen. In order to mitigate these issues, we always pay attention to the experience of the construction companies (and project managers) involved and we hire a third-party observer that analyses all the specific details and reports back to us.


Finalized projects pose a specific challenge regarding the capacity to generate future income and new ventures are more cautiously analyzed because they have no history on the market. As a result, we do our best to assess if the concept will bode well with the trends, so that the project generates enough cash to repay the debt and insure the expected returns for the owners.


The future of the Romanian real estate market is powered by high hopes - what are your main ambitions in the next two-three years?

In the near future, we intend to significantly expand our real estate financing portfolio, both towards international developers and investors, and local, smaller companies. We hope to increase our transactions in order to have the risk shared between multiple projects, while keeping the high quality of our clients and without compromising on our risk and compliance framework. Contracts that have cross-sell potential are important to us – for instance, when financing a residential project we also offer retail mortgages that come with associated benefits.

Do you have a final message about the Romanian real estate market?

We encourage investors to believe in the Romanian market and come have a chat about financing. We have strong experience with property transactions, a dedicated real estate consultation team and are ready to support their business plans here.

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