IMPACT Developer & Contractor SA was established in 1991 as a real estate developing company that specializes in qualitative and sustainable residential projects. They focus on large scale developments, having landmark projects such as Luxuria Residence or Greenfield Baneasa.
You recently became CEO of IMPACT - what is your vision for the company on the Romanian market?
This year we celebrate 30 years of experience and during all this time we have completed several successful residential projects. Not long ago, I took the leadership position in the company at a time sparking what will surely be an unparalleled growth phase. IMPACT does not simply build apartments and houses, but rather creates communities, being the first real estate developer to put together a residential neighborhood after 1989 in Romania. The pandemic shifted clients' interest towards higher quality, integrated homes. My personal ambition is to double the company's value in four years, through careful nurturing and by creating the capability to triple the number of projects we can simultaneously develop. Our main advantage is the large land bank of over 750,000 sqm. In ten years we want to build 1 million sqm.
Regardless of the pandemic, 2020 was a highly profitable year for your company - how did you achieve this positive outcome?
The pandemic did affect our company to a certain degree, but with a healthy stock of projects on one hand and the right timing on the other hand, we managed to mitigate shortcomings and register a satisfactory profit margin. Fortunately, the demand for new housing is on the rise, mainly in Bucharest, as people are choosing to leave ageing apartments and becoming interested in modern housing options.
Building state-of-the-art apartments can be a risky move, in a market that is still finding its feet, is demand keeping up at a fast enough pace?
In general, our clients are young families with children who are drawn to spacious apartments situated in safe neighborhoods, with generous green spaces around them and nearby facilities. We developed two main concepts: Greenfield - on the outskirts of the city, close to nature, and Luxuria – an urban, compact project with underground parking, gym, reception, private park etc. The idea is to build a community around the project. And yes, demand is keeping up, this client profile is on the rise, and fast.
You mentioned Greenfield and Luxuria, both in Bucharest - do you have plans to develop projects in other secondary cities?
Of course! 2021 will in fact mark two secondary city projects. One of them is Greenfield Copou in Iasi where we are now building 1,100 apartments. We see great potential here thanks to the universities that deliver a future qualified workforce, the city still benefiting from extensive space to develop. And a second project called Boreal Plus in Constanta, where we just delivered the first set of independent houses and we are now working on the apartment buildings. Timisoara is on our list as well, and we also want to start cross-border projects.
Through what principal means are you financing your projects and how welcoming is the financing medium in Romania at the moment?
We managed to attract credit and access funds and we are continuing this path. Most of our profits were reinvested in order to develop the company. We collaborate with almost all the important banks present in Romania and are pleased by the options they offer regarding real estate financing.
Alright, so financing has not been an issue, but what are some other challenges you have faced on the Romania real estate market and how do you mitigate them?
There is an array of general challenges that every company bumps into along the way. One of them is the relationship with local and central authorities, mainly regarding the timeframe needed to obtain building permits. Another ardent 30-year-old issue is the lack of predictability - laws get cancelled with as little notice as one month prior to their term, which greatly affects project planning. Sparse workforce and an increased price of raw materials are also recent challenges that are starting to gain speed. Making worst-case scenario plans and having a flexible margin of error are vital and lifesaving tips in any real estate development. Ideally, authorities should offer the infrastructure and help developers fulfill their projects, not the other way around.
Sustainability has become a buzz word among developers – are you seeing genuine appetite for it when it comes to residential demand?
Sustainability is not just a buzz word in Romania anymore, I believe it is already a standard by which clients decide whether to invest in a project or not. Close-by facilities, good infrastructure, smaller monthly bills, and a higher quality of life are the main advantages of sustainable housing.
Besides, we can look at it from a simple money perspective - developers who ignore the sustainability trend will definitely have a hard time accessing funds (especially green bonds) in the future.
What is your final message about the real estate market in Romania at present?
Romania is expected to go through one of the fastest paced recoveries. The real estate market is still in its prime and the demand is more enthusiastic than ever, in all big cities, especially in Bucharest. The market will continue evolving, with properties gaining more and more value in the coming years. Mobility is also very much on the rise, bringing with it copious opportunities for buy-to-rent development.
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