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Heating with 30% profit
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The ones that adapt the first will be the winners in the market after the crisis
“So the owner of the land will receive money when he understands that the real value is 30%-40% smaller than last year, but the amount received will allow him to buy another property, or to make other investments, and it cheaper by 30%, the market has chance of restarting….. “
"The ones that adapt the first will be the winners in the market after the crisis" says Freddy M.E. Jacobs, president of the Camera Imobiliare Belgia Romania. The companies have to shift their paradigms. Most companies are still doing what they have always done and they try to react on the cost side of the P/L. Basically they act like a fire fighters....
Case: 15 + 25 hectare in front of Nokia – Province of Cluj
If the owner of a land would sell at "real prices" that are 30-40% under the old market price then he stands a chance to sell. The owner could sell this land to do a residential project because Nokia has thousands of workers that have to live somewhere in the area. The top prices for residential are 100-120 Euro/sqm. From the viewpoint of an investor the average price is 60 Euro/sqm. So if we lower this price with 40% we come at 35-40 Euro/sqm.
Do not forget that the same investor can buy land in front of another important development area in another county. Shift the paradigm to real prices and try to look outside the box: outside of the area, the province and even outside of the country.
Keep in mind that the investors that take risks with the purchase of a large plot for development have a different mindset.
The art is to shift and the company and the mindset of the future investor. Let’s put this idea on the real estate crisis now. The owner of the land will sell if he uses real prices in his sales and marketing campaign.
Decisions on the cancellation of the pending investment in the region were taken at the board level of the company of the investor. To put the light on green again they directly depend on the evolution of the market at the macro level. The real and fair price can be the shift to get the investment approved…So the owner of the land will receive money when he understands that the real value is 30%-40% smaller than last year, but the amount received will allow him to buy another property, or to make other investments, and it cheaper by 30%, the market has chance of restarting.
I hope that this view on the market place will inspire the owners of land in Romania and the potential buyers (investors) that are looking for “deals” in a period of crisis.
Dipl. ir. Freddy M.E. Jacobs, president
Camera Imobiliar Belgia Româna
cibr@telenet.be
+32478/331.799
+40766/622.873