Lucian Azoitei
Founder & CEO
Forty Management SA

02 July 2021

Forty Management SA is a developer of premium mixed-use real estate and urban green reconversions unde Central District brand. They are among the first developers to bring the Crystal Lagoons franchise to Europe and the first to implement it in Romania. 

 

You are on the market for 15 years now - how did Forty come to life and what do you envision for its future?

In 2002 I co-founded PAZO Group, one of the main importers of ceramic wall and floor tiles and premium sanitary ware in Romania - we contributed to over 90% of the projects developed here. This experience helped build a really strong understanding of the real estate market and set the stage for Forty Management. 

With Forty, our goal from the get go was to register national premieres with every project we developed. Fortunately this approach was well received, all our projects have been sold before they were fully completed, even one year prior! Offering the best quality of living is the trademark of our company and going forward we believe that we can best do this through mixed-use projects.

You've mentioned "national premieres", will you please expand on that? What unlikely features did you make available in your buildings?

A specific example is that of Central District 4 Elements, which includes a running track on the roof, an outdoor cinema, barbeque, Wi-Fi, etc. Oftentimes Romanian developers match the market demand, never surpassing it through increased quality, but we always acted contrary to this "custom" and delivered more than the contract stated. Clients don't always know how to verbalize their wishes, but they can give some indicators towards what's important for them: community, socializing, relaxation, etc. A developer is an aggregator that creates the concept, positions it on the market and offers it to the client. A house is as good as its structure and this is why we always collaborate with the best professionals that can deliver perfect projects.

Central District Lagoon City is yet another example, the first mixed-use self-sustainable project in Eastern Europe. What are some of its special characteristics and when will it be ready?

All the projects we developed until now are sustainable, but Central District Lagoon City has all its utilities created inside the project (air conditioning, heat, etc.). However, we will be connected to urban utilities because the law requires it; even though we won't be using them on a daily basis, at most they will be good for back-up. 

 

I first came in contact with the Crystal Lagoons concept six years ago in the USA, where it gained traction as an alternative to obsolete malls, overall an impressive idea for transformation.

There are 600 projects of this kind all over the world, bar Europe, so I was one of the first developers to adapt the franchise to our continent. If everything works well, we hope to have the Central District Lagoon City ready by next spring and the whole complex, that is able to accommodate 2500 people, by 2025.

 

The residential sector thrived during the pandemic, has this in any way influenced your business plans?

Our business model is somewhat particular in the sense that it is based on a pre-established roadmap. In other words, we do not follow market prices rather we create our own standards based on the value we offer with each project developed.

A happy client is the best launch pad to the next profitable venture and this is the base philosophy that drives our company. We think about development in such a way that the properties we make available have a solid growth of at least 20% in the first years of use. This concept is for us #SmartDevelopment. In effect, some of our products grew even more in value - for example, one of the apartments sold with EUR 200,000 in 2017 is now worth EUR 400,000.

Romania is often perceived as a high-risk market, would you agree? What are some of the real challenges a developer can encounter here?

Two main challenges stand out in my view: the relationship with authorities and the extremely low quality of financing options. Unfortunately, it is impossible to implement projects over EUR 100 million due to the weak infrastructure behind them: stock market, pension funds, investment funds, risk capital, REITs etc. The market is perceived as a high risk one because only small projects (that go unnoticed by investors) are developed here. It's a vicious cycle that hopefully will come to an end very soon, and I’ve seen some changes in this way.

Turning our focus towards the future, what objectives are you pursuing with priority in the coming two-three years?

Every one of our projects is governed by a symbol: 99 A.I. Cuza Blvd. is known for its extensive green spaces and trees on the façade and 4 Elements shows that people can live in great residences by paying a low price. As a result, our intention is to develop a tower (near Miorita Fountain) that is going to become the tallest and most luxurious residential building in Romania. Once this project comes to life, we are going to concentrate exclusively on implementing the Crystal Lagoons concept, since it's a highly scalable idea. We intend to repeat this pattern in Budapest, Warsaw, Prague, etc. since extending the project to other cities is part of the franchise contract.




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