Real estate deals to resume in second half of 2009 and next year, DLA Piper predicts
03 August 2009
Real estate transactions that have been put on hold or significantly delayed because of the financial crisis will be resumed or completed in the second half of this year and next year, says a major law firm. "This could be a consequence of the restructuring of the portfolios held by developers, undertaken at an international upper level, as well as the alternative financing mechanisms that have been made available to real estate players," Alin Buftea, senior associate with DLA Piper and head of its property and construction department, told BR.
The slowdown of the real estate market has led to the equity element of investments increasing compared with previous years, when financing was easily acquired and the criteria used by the banks when granting loans were quite flexible and fluid, Buftea added. "The real estate players are more reluctant and cautious even before taking decisions that were considered standard in the past. The values of the projects are definitely lower than in previous years," he noted.
The firm, which has five lawyers working on real estate related projects, is currently involved in the sale and purchase of a portfolio of real estate developments. "It is a cross border transaction coordinated by our office, on which we are working closely with our colleagues from different jurisdictions. There are also other challenging transactions in the pipeline where the parties have begun preliminary non-binding negotiations," the DLA Piper representative said.
In terms of customer approach, Buftea says clients are not as aggressive as they were during the golden days of the Romanian real estate market. "They are tending to keep a low profile rather than spending money on advertising which will not now add any value to their investments. However, we have noticed that the activities related to major real estate projects that are not blocked are being advertised as usual," he concluded.
Source: Business Review (Corina Saceanu)
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