Tuesday, April 15, 2008

Credit Crunch Hits Romania Investors


10 April 2008 Bucharest _ Romania’s real estate market will only see moderate gains this year as the global credit crunch hits investors. Four investors on the Romanian real estate market have recently announced they will alter previously announced plans or completely sell their assets.

The Mivan company aims to give up the development of a mall in Tiago in the western town of Arad.

Owners of City Mall in Bucharest, Australia’s APN/UKA, have announced lowered the value of the building by 4% to € 112 million.

At the same time, Equest and Fabian, listed with the London Stock Exchange, are to sell their assets bought a few years ago.

Equest will leave Romania’s domestic market, following difficulties encountered in receiving financing.

Fabian has also asked the consulting company Jones Lang LaSalle to assist in the sale of office buildings at Baneasa Business Centre in northern Bucharest, bought nine months ago for € 23.9 million and now assessed at € 29.5 million.

Romania which joined the European Union in 2007 has seen its country record soaring rates of economic growth since it is still considered cheaper than the first wave of eastern European countries that joined the bloc in 2005.

But there is concern that as financial woes reverberate around the world with the United States slipping into recession, it could hit investor confidence in countries like Romania.

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