16th June
2007
EUR 500 M allotted to Romania for territorial development
Romania might absorb about EUR 60 M, the advance payment of 15 per cent of the
value of regional development projects.
From 2007 to 2013 Romania will benefit from nearly EUR 500 M for territorial co-operation
programmes, said EU Commissioner for Regional Policies Danuta Hubner, in a video
message to the participants in the conference launching European territorial co-operation
programmes in Bucharest.
“Territorial development has been elevated to the rank of EU policy and
Romania is one of the main recipients of the funds earmarked for that purpose,
more exactly EUR 500 M by 2013,” said Danuta Hubner.
Hubner further said that the assistance reserved for Romania was justified by
the very long border the country has, about 2,000 km and by the fact that Romania
can develop cross-border development programmes together with other EU member
states in the neighbourhood such as Hungary or Bulgaria, but with third party
countries like R. of Moldova, Ukraine or Serbia.
About EUR 1.34 bln has been allocated for regional, cross-border and tarns-national
development projects, 85 per cent of which is European funding, and 15 per cent
being the co-financing contributed by the participating states. The EU financing
of urban policies amounts to EUR 1.2 bln.
The Operational Programme of Cross-Border Co-operation between Romania and Bulgaria
2007-2013 is in the value of EUR 262 M. The total budget of Programme for European
Territorial Co-operation INTERREG IV for all the member states plus Switzerland
and Norway, from 2007 to 2013, designed to improve effectiveness of the EU structural
policies is EUR 405.09 M.
Romania might draw about EUR 60 M standing for the 15 per cent advance payment
of the value of the regional development projects waiting signing by the Romanian
authorities this year, stated Development, public Works and Housing Minister Laszlo
Borbely. The authorities hope to sign 13 projects in October, with the value of
EUR 190 M and 47 programmes in November, with a value of EUR 770 M.
The official indicated that the Romanian authorities were going to sign POR on
June 12-13, during the visit of the EU Commissioner for Regional Policy, Danuta
Hubner.
Source: Nine O'Clock
Bulgarian overseas property market is now over-exposed
Bulgaria might now occupy the third position in the Overseas Property league table
behind Spain and France, but it's the emerging markets of Latvia, Slovakia, Estonia
and Romania where foreign buyers should now be investing, a property company has
claimed.
Other eastern European and Baltic States are all vastly preferable to Overseas
Property investments in Bulgaria, as the country's property market has now become
over-saturated, Property Frontiers has insisted.
Lesser known eastern European states including Latvia and Slovakia are now "booming"
due to a generation of highly educated and business-minded local people, the company
said
Increased investment in the country by big-name international corporations including
Samsung and Dell has also helped their economies to grow.
Commenting on the current situation, Simon James, sourcing manager for Property
Frontiers, said: "Bulgaria is well-known because it's had a lot of press.
From an investment perspective I wouldn't put any money in it at all. Maybe three
or four years ago, yes, but the market has been rallied by unfortunate extreme
over-exposure.
"Compare that to Lithuania, Latvia and Estonia," he added.
"They're the strongest growing, they have the highest GDP growth every year
[in Eastern Europe]. Yields are low, but growth is very, very high."
Source: LandLordExpert.co.uk
Residential project in Bucharest has investment
value of 40 million Euros
Magnat Real Estate Opportunities GmbH & Co. KGaA has invested in another promising
project in Romania. Magnat, through a local project company 75% owned by Magnat,
purchased a site for residential development in the Vacaresti district of Bucharest.
On a 6.900 sqm plot of land, approximately 400 apartments with 37.000 sqm of sellable
Floor space will be built. Total investment volume will be approximately 40 million
Euros.
The project, only a few kilometres south-east of the centre of Bucharest, is favourably
situated nearby a subway station, as well as a shopping mall that is under construction
and that will be finished at the time of completion of the project. Due to the
imbalanced supply-demand ratio Bucharest, sales of apartments are possible already
off-plan or in early stages of development. Due to this market situation, high
two-digit returns on equity are possible, also supported by the possibility to
make efficient use of capital. Also, further price rises are expected.
Magnat CEO Jan O. Ruester comments: 'The residential market in Bucharest is characterised
by a high level of demand and vacancy rates of almost nil. For this reason, and
because we were able to acquire the site for an attractive price, we believe to
have a very attractive project.' For the years to come, MAGNAT expects a continued
outperformance of the residential development sector in Bucharest.
Source: Ad-Hoc News.de
Enel to acquire majority stake in Romanian distribution
company
Enel has said that it will pay €820 million ($1.33 billion) for a 67.5% stake
in Romanian electricity distribution company Electrica Muntenia Sud, after signing
a privatization deal with the Romanian firm's parent company, Electrica.
Enel SpA said that, until it receives the transferred shares, Avas subsidiary
Electrica will continue to control and manage Electrica Muntenia Sud (EMS), while
Enel will contribute to the management of the company as an observer, in line
with the privatization agreement. After share transfer, Enel will run and manage
the EMS operations. The company owns and operates the electricity distribution
grid of Bucharest and has a customer base of around 1.1 million with a network
spanning over 45,000km. EMS, which is one of eight Romanian regional electricity
distribution companies, is the fifth distribution company to be privatized by
the Romanian state.
Enel already has a presence in the region as it acquired Electrica Banat and Electrica
Dobrogea, the two smallest of Romania's eight power utilities. Enel said that
the new acquisition would double its Romanian footprint. Matteo Codazzi, Enel
Romania CEO and country manager, said: „The signing of EMS privatization
contract is a definite step forward as regards the development and liberalization
of the Romanian electricity sector, in line with EU policies.” „Enel
has a solid industrial plan for EMS to increase the quality of services and upgrade
its network, planning investments in amount of €1 billion ($1.32 billion)
for the next 15 years. Such massive investment plan will lead, in the mid-term,
to a significant increase in the reliability of the network, improving the quality
of service and reducing power interruptions,” Codazzi added.
Romania's minister of economy and finance, Varujan Vosganian, said that investments
in the Romanian energy sector will be around €30 billion ($40 billion) up
to 2020. He said that, although state-owned companies would contribute around
20% to 30% of this, privatization would be necessary for the modernization of
the region's energy market. Enel has said that it intends to participate in further
generation sector privatization in the future.
Source: energy-business-review.com
Beating the con tricks in real estate
Speculators who have exhausted the real estate boom of Poland, the Czech Republic
and Bulgaria are now buying and selling in Romania – but must watch out
for the same kind of con tricks.
Buyers’ profit expectations are often unrealistic and their limited market
knowledge can transform into easy prey for unscrupulous brokers and agents.
Cases of foreign investors being fooled in Bulgaria include projects described
in brochures that do not resemble the end result and without the facilities promised.
A familiar complaint – but one hard to resolve through the justice system’s
long and tiresome processes.
Desislava Leshtarska, a real estate expert at PropertyWise Bulgaria, cites a “phantom”
holiday project in Albena that required 5,000 Euro to reserve a place and a 30
per cent deposit, with payment installments due at every stage. The project was
scheduled for completion by the end of 2007 but eight months before its completion
the site was empty. An investigation revealed that the land had always been designated
for farming. So, before you buy, be sure who owns the land.
Foreign investors face other forms of deception on the Romanian market, argues
David Howe, investment consultant at InvestmentRomania. “They are told they
must set up a company to buy a residential property,” he says. “This
is untrue. But from an agent’s point of view, it makes the property look
19 per cent cheaper than it will be.”
Foreigners can buy buildings in Romania freely and land with a residency permit.
By setting up a company, Howe argues, the foreigners dilute their exit profit.
If they buy in their own name, they only pay a two per cent property transfer
tax. As a company, factored into this is also 19 per cent VAT, 16 per cent flat
tax on profits, along with the costs of establishing and dissolving the firm.
Land tax is also 1.5 per cent of the property value for a firm and only 0.5 per
cent for an individual, argues Howe.
Another problem with setting up a firm to buy property in Romania is its shaky
legal status, making it vulnerable when drawing up a contract with a sneaky developer.
“Such a contract equates to nothing more than a gentleman’s agreement
and is therefore reliant upon both parties acting as gentlemen,” says Howe.
This means that if a developer sells half his apartments to foreign speculators
and their “fake companies” but witnesses a surge in the property price,
he could return the deposits to the investors and sell the flats again himself.
If the investors complain, the developer could threaten them by asking the Romanian
version of the Inland Revenue or the IRS (Garda Financiara) to investigate their
‘firm’.
Agents sometimes dress up the square metres of built surface area as the living
space. “Foreigners buying 100 metre-apartments assume the apartment is 100
metres in size,” says Howe. “But a lot of the time they are paying
for the common area as well, such as the corridor and stairs that others in the
block use.”
Source: The Diplomat
BMW
Romania Sibiu Media
Galaxy Ziarul Financiar
GED Capital Immoeast
Romania Bucharest
Property Frontiers
PropertyWise Bulgaria
Romania property for sale
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