Sotheby's International Realty was founded in 1976 and provides independent brokerage services in over 75 countries around the world, with a focus on historical and luxury estates. After joining forces with Artmark Historical Estate in 2020 they manage over 250 properties across Romania.
Tell us a bit about yourself: how did your career path lead you to Sotheby’s and what is the vision for the 2020 born company?
I have been in industry since my student days back in 1997, and I can wholeheartedly say that I have witnessed the Romanian real estate market evolve. I remember that during those times Pipera was a former industrial platform and the residential market was mainly based on rentals. The retail segment was represented by the commercial spaces situated on the ground floor of apartment buildings and the industrial segment was quasi-inexistent. Access to capital was a game changer.
Fast forwarding through years of brokering real estate transaction, in 2018 I became the CEO of Artmark Historical Estate, that spun off from artwork into the historic and luxury real estate niche. Joining forces with a global brand seemed like the natural step to gain notoriety, so in July 2020 we started our collaboration with Sotheby’s International Realty. Even though it was a tough year due to the full-blown global pandemic, we surpassed all obstacles and had the best year in the company’s history.
What is Romania’s available market pool of historical and luxury properties and what does customers’ buying appetite look like?
In our 2018 market report we recorded around 10,000 historical buildings, listed as class A or class B monuments. What is specific to Romania is that the majority of them were confiscated aggressively during the communist regime, but after 1990 the restitution process was equally aggressive, so equilibrium was achieved. Our portfolio includes a variety of centuries-old palaces, castles, mansions and villas.
All of these buildings carry impressive histories with them or were designed by famous architects. Their value does not merely consist in functionality, as living or office spaces - we also have the chance to revive a set of associated values, as a homage to their glorious past.
Moreover, developers are starting to perceive the real opportunity of repurposed buildings as a real opportunity for them, be it as unique residences or centrally located classy office spaces. We also have examples of success stories with hotels that have flourished starting with the ‘90s: Athénée Palace, Continental Hotel, Cișmigiu Hotel and many more, success stories with office concepts implemented into such buildings (e.g. Metropolis Center, Palatul Universul), retail units such as Cărtureșt Verona or Cărturești Carusel.
What would be the profile of a typical investor in such assets, and what is the split between Romanian and foreign demand?
The majority is thus far represented by Romanian clients, but there is a rise in international clients. Romania is an easily accessible country thanks to its strategic geographical position. On one hand there is the B2B segment that either buys buildings to repurpose them as business headquarters or invest directly in historical apartments. And on the other hand, we have the end-users segment on the lookout for residences, because owning a uniquely designed French neo-gothic house, like Niculescu-Dorobanti for example, simply enthralls them. Also, the pandemic gave way to a new type of private client who is after a secondary (often countryside) residence.
Yes, the pandemic really brought to our attention the importance of our dwellings. The impact was palpable for you, then?
Exactly! Real estate buying patterns shifted and we saw an increased interest in suburban areas or extra-urban areas, for example. The “Zoom room” became a pivotal point of our pandemic existence, and that room could be anywhere. The outdoor space that comes with these extra-urban buildings is also extremely important, especially for families with children. At the same time, those who are still attached to city life wanted to move into a bigger and cozier apartment.
What are the particularities of the Romanian luxury market, in your opinion, from challenges to advantages?
Often, the challenges can also be the advantages. National loan options can be tricky, but the silver lining is that the owners of class A national monument buildings are able to access European funds. For example, the RO-CULTURA program that was active in 2019 offered between EUR 200,000 and 2 million per project and the owner had to contribute 10%. Also, the luxury real estate segment offers another opportunity in Romania simply because it is in its pioneering phase. Luxury properties with round the clock security, ample reception areas and a concierge, with top-notch finishes and amenities are only starting to emerge as a trend.
A promising future ahead, then - what are Romania Sotheby's International Realty’s plans for the coming two to three years?
First of all, we intend to consolidate our position in the historical and heritage buildings segment and finalize a series of ongoing portfolio transactions with some landmarks buildings. We want to extend our luxury properties selection as well as create new links with various consultants all over Romania so as to become a hub for Sotheby’s Realty International in the region. And of the flipside we wish to emphasize the pool of available international properties for Romanian clients, since, as we speak, we have requests for properties in Greece, France or Spain. But our main intention is to be able to reclaim as many heritage buildings as possible and to reintegrate them in the public or private circuit with the help of our partners.
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